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Old Feb 9th, 2012, 07:33 PM   #1
zanek
 
 
Join Date: Aug 2009
Posts: 154
http://finance.fortune.cnn.com/2012/...ter/?iid=HP_LN

Warren Buffett: Why stocks beat gold and bonds

"FORTUNE -- Investing is often described as the process of laying out money now in the expectation of receiving more money in the future. At Berkshire Hathaway (BRKA) we take a more demanding approach, defining investing as the transfer to others of purchasing power now with the reasoned expectation of receiving more purchasing power -- after taxes have been paid on nominal gains -- in the future. More succinctly, investing is forgoing consumption now in order to have the ability to consume more at a later date."

People in the comments on CNN are all making ad homieum attacks on Buffet or saying he's trying to find bag holders for the next stock drop.

What do you all think ?
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Old Feb 9th, 2012, 11:50 PM   #2
cyoungmark
 
 
Join Date: Dec 2010
Location: MN
Posts: 213
Value Investing has returned more than any other longer term strategy. I think if you know how to invest right, your return will be greater because you will pick the best asset, not the other way around.
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Old Feb 10th, 2012, 01:42 AM   #3
sumfuka
 
 
Join Date: Apr 2009
Posts: 436
I still prefer gold over stocks. Reason being it is one of the few things that could be manipulated. And you don't have to worry about time decay. Currencies used to be good but in this day and age, who is to say that particular currency won't collapse. Nations are crumbling right before our eyes.

So Buffett can keep compounding on his stocks, and I'll keep compounding on the metals. Everyone wins.
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Old Feb 10th, 2012, 07:12 AM   #4
nutmeg
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Join Date: Jan 2007
Location: Doddsville
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Buffetts holding period for stocks is "forever"

Now if you want to short a stock, he's the man to see. He's not going to call in your loan.

So WEB sets up a fixed rate of interest on your short position, long term long vs long term short.

Probably looks good on paper for the both of them.
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Old Feb 10th, 2012, 07:16 AM   #5
newwurldmn
 
 
Join Date: Apr 2011
Posts: 3,417
Quote:
Quote from zanek:

http://finance.fortune.cnn.com/2012/...ter/?iid=HP_LN

Warren Buffett: Why stocks beat gold and bonds

"FORTUNE -- Investing is often described as the process of laying out money now in the expectation of receiving more money in the future. At Berkshire Hathaway (BRKA) we take a more demanding approach, defining investing as the transfer to others of purchasing power now with the reasoned expectation of receiving more purchasing power -- after taxes have been paid on nominal gains -- in the future. More succinctly, investing is forgoing consumption now in order to have the ability to consume more at a later date."

People in the comments on CNN are all making ad homieum attacks on Buffet or saying he's trying to find bag holders for the next stock drop.

What do you all think ?
I would be listening to him. Remember he was the first person of note to publicly say that the derivatives were a disaster waiting to happen (and that was in 2003).
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Old Feb 10th, 2012, 10:25 AM   #6
piezoe
 
 
Join Date: Jan 2006
Location: Deep, deep South
Posts: 6,143
Quote:
Quote from sumfuka:

I still prefer gold over stocks. Reason being it is one of the few things that could be manipulated. And you don't have to worry about time decay. Currencies used to be good but in this day and age, who is to say that particular currency won't collapse. Nations are crumbling right before our eyes.

So Buffett can keep compounding on his stocks, and I'll keep compounding on the metals. Everyone wins.
you're deluding yourself. Mr. Buffett is correct. You should read the article again and learn to think in terms of purchasing power. Wall street hype and markets are always reported in nominal dollars, you must think in terms of purchasing power to be able to invest wisely.

For example, when you discount the S&P for inflation you find the that the total return since the mid seventies is, if you omit dividends, roughly that of Treasuries with of course greater risk. However, if you include dividends, you now get a return a little better than inflation. Over longer periods, gold keeps you roughly even with inflation, and bonds lose to inflation.

The key to long term investing is dividends, or value investing as someone else has pointed out. I prefer the dividend route and only consider, for long term investing, stocks in a long term up trend with a history of raising dividends. I will buy nothing but stocks that pay dividends.
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