Warren Buffett is Buying Stocks
The NY Times just ran an interesting Op-Ed piece from Warren Buffett. In it, he talked about his current view of the market, and how he’s been handling his personal investments:
I’ve been buying American stocks. This is my personal account I’m talking about, in which I previously owned nothing but United States government bonds… If prices keep looking attractive, my non-Berkshire net worth will soon be 100 percent in United States equities.
So… Why is he wading into stocks given the current market turmoil?
A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors. To be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions. But fears regarding the long-term prosperity of the nation’s many sound companies make no sense.
He goes on to argue that:
I can’t predict the short-term movements of the stock market. I haven’t the faintest idea as to whether stocks will be higher or lower a month — or a year — from now. What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up. So if you wait for the robins, spring will be over.
What about holding cash for safety?
Today people who hold cash equivalents feel comfortable. They shouldn’t. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value. Indeed, the policies that government will follow in its efforts to alleviate the current crisis will probably prove inflationary and therefore accelerate declines in the real value of cash accounts.
Interesting thoughts from a guy who knows. I tend to agree with him on all accounts, though I admittedly didn’t have the foresight to move into a 100% bond position like he did. Anyway, I highly recommend clicking through and reading the full article.
Source: NY Times
Modified on October 23rd, 2008 - 6 Comments
Filed under: Saving & Investing
About the author: Nickel is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!
Related articles...
» Is Warren Buffett Smoking Crack?» The Buffett Tax: Re-Defining the AMT?
» Investment Performance: CDs vs. Stocks
» Buffett Makes Largest Donation Ever
» Investment Advice: Ignore the Noise
» Investment Performance: Stocks vs. Bonds
» How to Become a Millionaire – Tips on Getting Rich from the World’s Richest Man
» Stocks are for Losers?
Was this article useful? Please sign up to receive our content via e-mail:
6 Responses to “Warren Buffett is Buying Stocks”
Leave a Reply
Top Cards by Category
Earn $100 cash back after spending $1,000 in eligible purchases in the first 3 months of Cardmembership. Get 3% cash back at supermarkets, 2% cash back at gas stations and department stores, and 1% cash back on all other purchases.
Turn purchases into free travel: Enjoy travel rewards with no travel restrictions or blackout dates - get points for flights on any airline, stays at any hotel, and car rentals with any company.
Turn purchases into free travel: Enjoy travel rewards with no travel restrictions or blackout dates - get points for flights on any airline, stays at any hotel, and car rentals with any company.
No Balance Transfer Fee!* 0% Intro APR for up to 15 months on purchases and balance transfers. This card offers Blueprint, free and customizable account features that help you avoid unnecessary interest and pay your balances down faster.
Earn up to 5% cash back* in categories that change and enjoy a 0% introductory rate for 15 months on Balance Transfers and 15 months on Purchases.
Enjoy a 0% introductory rate for 18 months on Balance Transfers and 6 months on Purchases. Earn up to 5% cash back in categories that change.
Get rewarded for what your business already spends. Unlimited rewards potential - Membership Rewards(R) points have no limit to the amount you can earn and no expiration date.
0% intro APR on purchases for 9 months, then the variable standard purchase APR of 12.99% - 18.99%*. 5% Cashback Bonus in categories that change like gas, restaurants, department stores and more. Limitations apply*. Up to 1% unlimited Cashback Bonus on everything else. No annual fee.
0% intro APR on purchases and balance transfers for 15 months, then the variable standard purchase APR of 10.99% - 19.99%.* Earn 2% cashback automatically at gas stations and restaurants. Great rewards with no annual fee, no rewards redemption fee, and no additional card fee.
This is a prepaid reloadable debit card with a rewards program. No credit check needed and no activation fee. There is a $4.95 monthly fee, reduced to $0.99 monthly if you load $500 each month.
- How to Become a Millionaire
- How to Get Out of Debt
- The Best Dollars I've Ever Spent
- How Our Estate Plan is Structured
- How We Paid Our Mortgage In Less than 10 Years
- Money Making Ideas
- How to Manage Your Asset Allocation with Multiple Accounts
- Consumption Smoothing - Save While the Saving's Good
- How to Save on Groceries
- How Much Life Insurance Do You Need?
- Eleven Great Books About Money
- Dave Ramsey is Bad at Math
- Dish Network Customer Service SUCKS
- $8,000 Homebuyer Tax Credit
- Pay Off Mortgage Early or Invest?
- How to Claim the First-Time Homebuyer Tax Credit
- Reduced Credit Limits? Share Your Experience
- $15,000 Homebuyer Tax Credit
- Ethanol Blended Gas = Lower Mileage?
- Termite Control: Sentricon vs. Termidor
- How Much Should You Pay a Babysitter?
- Will Mac OS X Lion Kill Quicken 2007?
- Federal Income Tax Rates Went Down but Your Federal Tax Withholding Increased. Here's Why...
How to save money on insurance
- Being Too Frugal Can End Up Costing You Money
- Check Fraud: Use a Shredder -- and Hope Everyone Else Does, Too!
- HSA Contribution Limits for 2013
- How to Close an Ally CD Early
- Seven Ways to Make Big Bucks at Your Garage Sale
- What's the Lowest Possible Credit Score?
- $250 Signup Bonus from Citi ThankYou Preferred
- How to Help Your Family Financially - and Stay Sane
- Average Price of a New Car?
- Lending Club Recovered Funds from Defaulted Loans

October 17th, 2008 at 5:34 pm
I think more investors should follow in Buffet’s foot steps. Everything is at a astronomical level right now and there are a lot of great buying opportunities that present themselves. Most people think a recession is a bad thing, but if you are a true investor, you will beg to differ.
October 17th, 2008 at 6:20 pm
Warren Buffet is the King Solomon of our day. I think that his philosophies should be defined and broadcast to anyone that would like to listen. I am not surprised at all that he is investing so heavily in stocks. If he had the time, I’m sure he would be heavily involved in local real estate markets too.
Caleb
http://www.mefinanciallyfree.blogspot.com
October 17th, 2008 at 10:10 pm
I agree. Don’t forget that he predicted both the internet bubble and the current one:
In 1999 when everyone was busy buying internet stocks he said:
“After a heady experience of that kind, normally sensible people drift into behavior akin to that of Cinderella at the ball. They know that overstaying the festivities… will eventually bring on pumpkins and mice”.
At that time everyone thought he was an old fool who doesn’t understand the “new economy”. He turned out to be right – we got pumpkins and mice….
Then in 2003:
“We’ve found it hard to find significantly undervalued stocks. The shortage of attractively-priced stocks in which we can put large sums doesn’t bother us. Our capital is underutilised now, but that will happen periodically. It’s a painful condition to be in but not as painful as doing something stupid.”
Also in 2003, about mortgage-backed securities and derivatives: “financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.â€
In both cases he turned out to be right. Listening to him in 1999 and 2003 would’ve saved many of us a whole lot of money.
A fascinating interview with him about the current crisis called “Wisdom of Warren Buffett: On Innovators, Imitators, and Idiots”:
http://discussionleader.hbsp.c.....n_imi.html
October 17th, 2008 at 11:34 pm
I am socking more in stock right now. I have at least 10 years to retire early and I think what I put in now will look great in a decade.
October 22nd, 2008 at 4:52 pm
Cheap doesn’t equal growth, but apparently Buffett believes the US economy is headed for growth. Few has predicted the extent of this crash, and I believe fewer can predict how long it will take to get out of this position. The past has shown the rise after such massive selloffs to be substantially longer, especially if there are no pockets of growth.
October 22nd, 2008 at 7:35 pm
Cheaplee,
True cheap doesnt always equal growth, but I do think that VALUE=GROWTH and that Buffett is not saying that we are headed back to growth but a return to norm. This is almost the invert as 1999-2000 when everyone said its different this time. Stocks are simply oversold from a historical perspective.
STOCKMANMARC