Buffett going 100% long stocks

Discussion in 'Stocks' started by Cutten, Oct 17, 2008.

  1. Cutten



    His essential arguments:

    i) stocks are cheap because of short-term bad news
    ii) the news will improve, and in 5, 10 years time profits will be at new records
    iii) by the time the news improves stocks will be much higher - staying out of stocks until news gets better will therefore cost you lots of money
    iv) most investors are holding cash, a terrible long-term asset with pathetic returns and which will probably be severely eroded by inflationary policies to deal with the current crisis
    v) investors holding cash think they will be able to time the end of the bear market by moving into stocks at the lows - history says they will fail to do this, and end up buying at far higher prices
  2. let me guess....

    the oracle is underwater or the oracle's bosses (US Govt) is telling him to make the sheeple buy.... just like he 'bought' GS and GE to show equity support.

  3. AK100


    I'm with you on the Government angle.
  4. Short term traders laugh at Buffett all the time. I remember his short USD a few years back and people were calling him dumb.

    He's a billionaire for a reason.
  5. Cutten


    Let the record show that ET member 'itcanbedone' is short the S&P from current price (920 ES), whereas Buffett is long.

    I will update this thread at regular intervals and see the progress - whether itcanbedone or Buffett is doing better.
  6. I remember reading about an interview of Buffet that was conducted in 1974. Buffet was asked how he liked the market (one of the most brutal bear markets in post war history)

    Buffet said he loved it. "Why", the journalist asked. Buffet: "I feel like an oversexed man in a harem. What's not to like with so many opportunities around?"

    He was buying hand over fist. Over the next couple years, he was well rewarded.
  7. Doesn't matter what short term traders think of Buffet. If he can convince the public to get back into the market, it will be a self-fufilling prophecy.
  8. kowboy



    Appreciate your post
  9. Everyone can make mistakes, even Buffet. Especially at the end of his career after so much success and luck. He's very smart and talented and he may be right again but I don't know of anyone who got it right all the time until they died. Even the best tend to make big mistakes and so far if we make exception of his avoidance of tech in the 90's Buffet hasn't made any big mistake.
    So don't follow Buffet, he may change his mind anyway. But it is a positive in the medium term .
  10. As bad as US indices look....US Indices have still performed better than many other stock market indices....

    ie ....some country indices down almost 70%....


    Cash is king.....

    The Templeton approach.....and a 3 year dollar averaging approach....

    For many years fear has not been this extreme....particularly world wide....

    Humans hate low stock prices.....and love low gasoline prices....

    It will never change.....

    Let's hope companies like IB, BATS, and Genesis will make this smorgasboard available on the upcoming worldwide direct access stock market highway......

    #10     Oct 17, 2008