Buy American. I Am

[LaoPo]

In these times of fear, recession and crisis I thought the man deserved a special thread. It's interesting to learn he's -personally- stepping away from bonds, into American stocks.

We shouldn't forget however that he IS American and invest (mostly) speaks and dreams in dollars; many of us live in a non-dollar economy/country though.

October 17, 2008

Op-Ed Contributor

Buy American. I Am.

By WARREN E. BUFFETT

Omaha

THE financial world is a mess, both in the United States and abroad. Its problems, moreover, have been leaking into the general economy, and the leaks are now turning into a gusher. In the near term, unemployment will rise, business activity will falter and headlines will continue to be scary.

So ... 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. (This description leaves aside my Berkshire Hathaway holdings, which are all committed to philanthropy.) If prices keep looking attractive, my non-Berkshire net worth will soon be 100 percent in United States equities.

Why?

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. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now.

Let me be clear on one point: 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.

A little history here: During the Depression, the Dow hit its low, 41, on July 8, 1932. Economic conditions, though, kept deteriorating until Franklin D. Roosevelt took office in March 1933. By that time, the market had already advanced 30 percent. Or think back to the early days of World War II, when things were going badly for the United States in Europe and the Pacific. The market hit bottom in April 1942, well before Allied fortunes turned. Again, in the early 1980s, the time to buy stocks was when inflation raged and the economy was in the tank. In short, bad news is an investor’s best friend. It lets you buy a slice of America’s future at a marked-down price.

Over the long term, the stock market news will be good. In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.

You might think it would have been impossible for an investor to lose money during a century marked by such an extraordinary gain. But some investors did. The hapless ones bought stocks only when they felt comfort in doing so and then proceeded to sell when the headlines made them queasy.

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.

Equities will almost certainly outperform cash over the next decade, probably by a substantial degree. Those investors who cling now to cash are betting they can efficiently time their move away from it later. In waiting for the comfort of good news, they are ignoring Wayne Gretzky’s advice: “I skate to where the puck is going to be, not to where it has been.”

I don’t like to opine on the stock market, and again I emphasize that I have no idea what the market will do in the short term. Nevertheless, I’ll follow the lead of a restaurant that opened in an empty bank building and then advertised: “Put your mouth where your money was.” Today my money and my mouth both say equities.

Warren E. Buffett is the chief executive of Berkshire Hathaway, a diversified holding company.

The New York Times

LaoPo

Edited October 17, 2008 by LaoPo

[mcgriffith]

Nice, and he's a smart guy.

If I had an extra 3 billion I'd buy into GE too right now....

[LaoPo]

In the ages to come he will be remembered as one of the best and smartest, wisest investors ever.

However, apart from his personal swap from bonds into stocks he doesn't say anything new and his lessons have been expressed many times before.

I have a feeling he received a whisper (by whomever) asking to ''filter'' a positive message to the financial, investing world which is battered by negative news.

Nothing wrong with that of course, on the contrary. But if it will help restoring confidence ?

LaoPo

[OriginalPoster]

In the ages to come he will be remembered as one of the best and smartest, wisest investors ever.

However, apart from his personal swap from bonds into stocks he doesn't say anything new and his lessons have been expressed many times before.

I have a feeling he received a whisper (by whomever) asking to ''filter'' a positive message to the financial, investing world which is battered by negative news.

Nothing wrong with that of course, on the contrary. But if it will help restoring confidence ?

LaoPo

I gather that your'e not running out and buying shares of Berkshire Hathaway then.

[mcgriffith]

Markets are simply psychology, based on trust and optimism in human faith and work endeavor.

Forget fundamentals, technical analysis, quants, etc.

At the end of the day, it is how we feel about ourselves and our chances in life, and the willingness to bet on it.

[PeaceBlondie]

Thanks, LapPo, for posting that interesting advice from some little guy from Omaha, the place for which a beach in Normandy was named by a Texan when the Allies re-invaded Europe. Little old Warren is richer than any Swiss citizen, is he not? And he leads one of the most successful investment stocks in world history, right? A fund that invests heavily in countries like China.

Honestly, I thought this personal comment by you was a bit provincial (or does Switzerland still have those cute little cantons? - do the Swiss speak cantonese? )"We shouldn't forget however that he IS American and invest (mostly) speaks and dreams in dollars; many of us live in a non-dollar economy/country though." We Texans do not know much about Swiss franks (sic).

I did have a currency exchange dialog with Maria, the 14 year old washroom attendant at Ciudad Cuahtemoc, in Chihuahua. Her best line was that she got the US 25-cent "tokens" to operate the American Maytag coin machines, from her five illegal Mexican brothers who sent her the tokens from.........Omaha, Nebraska.

Americans now have a choice between a half-Black African-American born in Hawaii who also lived in Indonesia, and a killer of Vietnamese, who was born in Central America. You see, we are more world-traveled than you might suppose.

[pkrv]

Thanks, LapPo, for posting that interesting advice from some little guy from Omaha, the place for which a beach in Normandy was named by a Texan when the Allies re-invaded Europe. Little old Warren is richer than any Swiss citizen, is he not? And he leads one of the most successful investment stocks in world history, right? A fund that invests heavily in countries like China.

Honestly, I thought this personal comment by you was a bit provincial (or does Switzerland still have those cute little cantons? - do the Swiss speak cantonese? )"We shouldn't forget however that he IS American and invest (mostly) speaks and dreams in dollars; many of us live in a non-dollar economy/country though." We Texans do not know much about Swiss franks (sic).

I did have a currency exchange dialog with Maria, the 14 year old washroom attendant at Ciudad Cuahtemoc, in Chihuahua. Her best line was that she got the US 25-cent "tokens" to operate the American Maytag coin machines, from her five illegal Mexican brothers who sent her the tokens from.........Omaha, Nebraska.

Americans now have a choice between a half-Black African-American born in Hawaii who also lived in Indonesia, and a killer of Vietnamese, who was born in Central America. You see, we are more world-traveled than you might suppose.

'PeaceBlondie' - I did not actually think you had this in you. Interesting times....

[LaoPo]

Thanks, LapPo, for posting that interesting advice from some little guy from Omaha, the place for which a beach in Normandy was named by a Texan when the Allies re-invaded Europe. Little old Warren is richer than any Swiss citizen, is he not? And he leads one of the most successful investment stocks in world history, right? A fund that invests heavily in countries like China.

Honestly, I thought this personal comment by you was a bit provincial (or does Switzerland still have those cute little cantons? - do the Swiss speak cantonese? )"We shouldn't forget however that he IS American and invest (mostly) speaks and dreams in dollars; many of us live in a non-dollar economy/country though." We Texans do not know much about Swiss franks (sic).

I did have a currency exchange dialog with Maria, the 14 year old washroom attendant at Ciudad Cuahtemoc, in Chihuahua. Her best line was that she got the US 25-cent "tokens" to operate the American Maytag coin machines, from her five illegal Mexican brothers who sent her the tokens from.........Omaha, Nebraska.

Americans now have a choice between a half-Black African-American born in Hawaii who also lived in Indonesia, and a killer of Vietnamese, who was born in Central America. You see, we are more world-traveled than you might suppose.

Do I sense sarcasm here PB ? That's not like you....

In bold & blue: I'm not sure where you're hinting at. My comment was purely written, meaning that Mr. Buffett speaks for himself, being an American and that HIS decisions are made BECAUSE he is American, investing with HIS DOLLARS in AMERICAN stocks, and away from Bonds.

The article he is quoted from is speaking about his PERSONAL investments.

For TV members/investors (like myself) who are not American it is often a difficult decision to buy dollar nominated stocks, because we have to decide whether it's wise to change our GBP, Euro or Swiss Francs, Rubels, Baht, Hong Kong $ or whatever other currency, into Dollars or not, BECAUSE of the currency risks.

That was what I meant with my sentence and nothing else. That's why I find your remarks odd and sarcastic.

What Swiss Cantons and Cantonese language have to do with my comment is beyond me, unless you're thinking I am a Cantonese speaking Swiss citizen.

I'm neither Swiss nor Cantonese speaking; I do speak, write and communicate in quite a few other languages though.

IF you thought I am Swiss I think that's odd too, being a member here for 4 years and 9,500 posts.

What the US elections and Maria from Chihuahua has to do with Warren Buffett's article...well......?

I'm puzzled.

LaoPo

[pkrv]

Thanks, LapPo, for posting that interesting advice from some little guy from Omaha, the place for which a beach in Normandy was named by a Texan when the Allies re-invaded Europe. Little old Warren is richer than any Swiss citizen, is he not? And he leads one of the most successful investment stocks in world history, right? A fund that invests heavily in countries like China.

Honestly, I thought this personal comment by you was a bit provincial (or does Switzerland still have those cute little cantons? - do the Swiss speak cantonese? )"We shouldn't forget however that he IS American and invest (mostly) speaks and dreams in dollars; many of us live in a non-dollar economy/country though." We Texans do not know much about Swiss franks (sic).

I did have a currency exchange dialog with Maria, the 14 year old washroom attendant at Ciudad Cuahtemoc, in Chihuahua. Her best line was that she got the US 25-cent "tokens" to operate the American Maytag coin machines, from her five illegal Mexican brothers who sent her the tokens from.........Omaha, Nebraska.

Americans now have a choice between a half-Black African-American born in Hawaii who also lived in Indonesia, and a killer of Vietnamese, who was born in Central America. You see, we are more world-traveled than you might suppose.

Do I sense sarcasm here PB ? That's not like you....

In bold & blue: I'm not sure where you're hinting at. My comment was purely written, meaning that Mr. Buffett speaks for himself, being an American and that HIS decisions are made BECAUSE he is American, investing with HIS DOLLARS in AMERICAN stocks, and away from Bonds.

The article he is quoted from is speaking about his PERSONAL investments.

For TV members/investors (like myself) who are not American it is often a difficult decision to buy dollar nominated stocks, because we have to decide whether it's wise to change our GBP, Euro or Swiss Francs, Rubels, Baht, Hong Kong $ or whatever other currency, into Dollars or not, BECAUSE of the currency risks.

That was what I meant with my sentence and nothing else. That's why I find your remarks odd and sarcastic.

What Swiss Cantons and Cantonese language have to do with my comment is beyond me, unless you're thinking I am a Cantonese speaking Swiss citizen.

I'm neither Swiss nor Cantonese speaking; I do speak, write and communicate in quite a few other languages though.

IF you thought I am Swiss I think that's odd too, being a member here for 4 years and 9,500 posts.

What the US elections and Maria from Chihuahua has to do with Warren Buffett's article...well......?

I'm puzzled.

LaoPo

'LaoPo' - your posts are usually brilliant, but these are not good it looks like you have become a salesman - I think this was what was picked up on, rightly or wrongly. We are in difficult times.

[LaoPo]

'LaoPo' - your posts are usually brilliant, but these are not good it looks like you have become a salesman - I think this was what was picked up on, rightly or wrongly. We are in difficult times.

If it was picked up wrongly it's because some want to read it the way they want, not me; sorry to say so.

I'm an admirer of Mr. Buffett and just wished to explain that it is not for everyone to invest in American stock.

That's all.

LaoPo

[LaoPo]

Buffett's "buy now" call gets lukewarm reception

Fri Oct 17, 2008 2:06pm EDT

http://www.reuters.com/article/forexNews/i...E49G5Z620081017

**********************************************************

Applying the Buffett doctrine

Commentary: Some of the 'Oracle's' bets are hurting

By MarketWatch Last update: 3:20 p.m. EDT Oct. 17, 2008

The following First Take is real-time analysis and opinion by the MarketWatch commentary team.

NEW YORK (MarketWatch) -- If Warren Buffett is buying stocks, should you?

The answer, unequivocally, is yes. That is, if you can get Warren's terms. And even if you can get those sweet deals, be careful.

Those are the warnings investors should heed after Buffett's now infamous commentary was published in the New York Times on Friday, "Buy American. I Am." Judging by the market's response -- the Dow Jones Industrial Average was up nearly 3% in afternoon trading -- investors are following America's most famous investor.

But those same investors should be careful. It's not that Buffett isn't smart, he is. But at this stage of the game, Warren Buffett doesn't buy stocks on the open market by calling his broker, he buys them in bulk.

For instance, he didn't just go out and buy battered shares of General Electric Co. on the open market Oct. 1. He also received $3 billion in special, preferred stock. Those shares will pay a 10% dividend for at least three years and if, after that, GE wants to buy it back they will have to pay him 10%. Buffett also got warrants to buy GE stock that at the time was worth a 13% discount to existing shares.

The same principle applied with his investment in Goldman Sachs Group Inc. just a week earlier. Buffett again bought $5 billion in preferred stock. He'll get the same 10% dividend and $5 billion in warrants at $115.

The problem for Buffett is that his warrants were becoming worthless as GE and Goldman stock fell. One cheap, easy way for Buffett to reverse his losses is by penning an editorial using his huge sway, folksy style, and hints of patriotism to stir up some buying.

Buffett made the point that he's using his personal account to buy stocks. That may be true and his heart may be in the right place, but it's also true that Buffett's fame, success and fortune ride with his investment company Berkshire Hathaway, not his personal account.

Investors should, in the end, be mindful of Buffett's advice, "Be fearful when others are greedy, and be greedy when others are fearful."

And when the "others" are investors driving very greedy sweetheart deals?

Wait until you can get your own.

http://www.marketwatch.com/news/story/if-w...C-ED202E2B44C3}

LaoPo

Edited October 17, 2008 by LaoPo

[PeaceBlondie]

LaoPo, I apologize for my remarks. It was very late, and I was trying too hard to be cute. I still do not know if you are from Lichtenstein, Andorra or San Marino. In my weariness, you sounded like you were America-bashing, or making the usual ignorant assumptions about Americans never having traveled outside of Boise or Wilmington. Like both Bush presidents, I am not really from Texas, originally, although Eisenhower was. As for my political remarks, even we expatriates are much too nervous about the upcoming elections.

Indeed, Warren gets a special, sweetheart deal. Yet there are still some underpriced, financially sound, American stocks still available. GM and Chrysler are probably not two of them. Like airline stocks, a merger of two failing companies only creates the synergy or an economy of scale to fall harder.

[Lancelot]

Americans now have a choice between a half-Black African-American born in Hawaii who also lived in Indonesia, and a killer of Vietnamese, who was born in Central America. You see, we are more world-traveled than you might suppose.

Killer of Vietnamese...

Real nice...

I remember anti Viet Nam war protestors spitting on returning GIs. That was really nice too.

[PeaceBlondie]

I blessed the boys as they went off to war, and later repented. Anyway, I got off topic. Sorry. Warren is a shrewd investor.

[OriginalPoster]

I blessed the boys as they went off to war, and later repented. Anyway, I got off topic. Sorry. Warren is a shrewd investor.

So how about the ones in Iraq and Afghanistan, are they baby killers too?

Edited October 18, 2008 by OriginalPoster

[LaoPo]

LaoPo, I apologize for my remarks. It was very late, and I was trying too hard to be cute. I still do not know if you are from Lichtenstein, Andorra or San Marino. In my weariness, you sounded like you were America-bashing, or making the usual ignorant assumptions about Americans never having traveled outside of Boise or Wilmington. Like both Bush presidents, I am not really from Texas, originally, although Eisenhower was. As for my political remarks, even we expatriates are much too nervous about the upcoming elections.

Indeed, Warren gets a special, sweetheart deal. Yet there are still some underpriced, financially sound, American stocks still available. GM and Chrysler are probably not two of them. Like airline stocks, a merger of two failing companies only creates the synergy or an economy of scale to fall harder.

I already figured more or less it must have been something like your explanation, causing your late night uproar, so to speak. I thought you knew I am from The Netherlands, that lowland country on the shores of the North Sea and, sailing West, one ends up in that other sailing nation the United Kingdom.

Although we are a rather small country, one of the founders and part of the European Union, we as a nation, usually have a big mouth which however is quite necessary in order not to be squeezed by the power of other much larger nations who tried to conquer us like Spain, France, Germany, England and the like.

Being such a small country it is also why a lot of Dutch are always to be found in the most odd places of the world, -East & West- exploring the bushes, grabbing and stealing the resources and commodities of said places and exploiting the population, not forgetting to please (?) the most attractive boys and girls.

I am however not quite sure if we taught that behavior to the Brits or that we learned to behave like superiors from them; I suspect it must have been the latter.

Coming back on topic it's interesting to learn that Warren Buffett's ancestor roots are to be found in Northern Scandinavia from his paternal side whilst the roots from his mother's side are from Iberia or Estonia, of all odd places and that's strange because the two places are thousands of Kms apart.

What the wife of Google's co-founder, Moscow born Sergey Brin has to do with the DNA of Buffett can be found in:

The Buffett Mystery:

http://money.cnn.com/magazines/fortune/for...60549/index.htm

LaoPo

Edited October 18, 2008 by LaoPo

[Naam]

I blessed the boys as they went off to war, and later repented. Anyway, I got off topic. Sorry. Warren is a shrewd investor.

So how about the ones in Iraq and Afghanistan, are they baby killers too?

not all the boys who went to Viet Nam or Iraq were/are baby killers. some were, there is no doubt about it. the responsible and real baby killers are always sitting safe and sound thousands of miles away from the area where they ordered babies to be killed. in my times it was called "head count" and babies were counted too. now a more "detached" expression "collateral damage" is used

[OriginalPoster]

I blessed the boys as they went off to war, and later repented. Anyway, I got off topic. Sorry. Warren is a shrewd investor.

So how about the ones in Iraq and Afghanistan, are they baby killers too?

not all the boys who went to Viet Nam or Iraq were/are baby killers. some were, there is no doubt about it. the responsible and real baby killers are always sitting safe and sound thousands of miles away from the area where they ordered babies to be killed. in my times it was called "head count" and babies were counted too. now a more "detached" expression "collateral damage" is used

During Vietnam, if you were an 18 year old who was drafted into the military you pretty much had two options. One was to go to Canada believing that you were destined to live out your life as a fugitive and that someone else would likely die in your place, without knowing that two presidents would later you would be pardoned. The other was to take your chances on going to Vietnam and pray that you didn't return in a body bag. I'm not sure that the ones that chose the former option are the heros and the ones that chose the latter are they ones that should have been spat upon.

Edited October 18, 2008 by OriginalPoster

[billaaa777]

Americans now have a choice between a half-Black African-American born in Hawaii who also lived in Indonesia, and a killer of Vietnamese, who was born in Central America. You see, we are more world-traveled than you might suppose

Every post you make I think to myself you are really sinking to the deep end. Dude, are really losing it, you need to think about getting help somewhere. You never have a good thing to say about anything, to bad for you.

[VegasVic]

LaoPo, I apologize for my remarks. It was very late, and I was trying too hard to be cute. I still do not know if you are from Lichtenstein, Andorra or San Marino. In my weariness, you sounded like you were America-bashing, or making the usual ignorant assumptions about Americans never having traveled outside of Boise or Wilmington. Like both Bush presidents, I am not really from Texas, originally, although Eisenhower was. As for my political remarks, even we expatriates are much too nervous about the upcoming elections.

Indeed, Warren gets a special, sweetheart deal. Yet there are still some underpriced, financially sound, American stocks still available. GM and Chrysler are probably not two of them. Like airline stocks, a merger of two failing companies only creates the synergy or an economy of scale to fall harder.

"In my weariness, you sounded like you were american bashing" In your weariness? In my awakened state I have found lao po to be an extraordinary U.S.A. basher time and time again. I find it kind of funny that when good old Warren makes a speech that supports one of lao's hypothesis, then lao is all over it touting the sage of Omaha as the second coming, but when Warren says somrthing positive about U.S. equities then Warren is just talking up his book Now thats funny!!! Warren is of course correct, but then again I have been making this same point over the past couple of weeks here! Billionaires make their fortunes by buying when there is blood in the streets, and Warren learned this early on from Benjamin Graham, who in turn learned it from Bernard Baruch!!! Anyone purchasing an assortment of shares in U.S. companies that have strong balance sheets and forward looking mangement, over the next 3 months will be very well rewarded 3-5 years from now

[PeaceBlondie]

Americans now have a choice between a half-Black African-American born in Hawaii who also lived in Indonesia, and a killer of Vietnamese, who was born in Central America. You see, we are more world-traveled than you might suppose

Every post you make I think to myself you are really sinking to the deep end. Dude, are really losing it, you need to think about getting help somewhere. You never have a good thing to say about anything, to bad for you.

I already apologized for that post. Let me commend you for reading almost 12,000 of my posts on ThaiVisa, so that you could pass judgment on what I never do. God bless you, John McCain, and George W. Bush.

[Golden Nugget]

The old fellow is a very savvy investor, but he's not always right. Go ahead and blindly follow what he does and more than likely you'll do well for yourself. Of course your return will be less than Warren's, because he will have bought way in advance before you find out.

As for buying now, it's still pre-mature. Warren is trying to protect his huge investment in Goldman Sachs and a few other recent purchases. It's funny how when the news hit about his GS purchase a few weeks back then the market follows with a huge selloff. Of course he's trying to save his ASSets.

[Lancelot]

Americans now have a choice between a half-Black African-American born in Hawaii who also lived in Indonesia, and a killer of Vietnamese, who was born in Central America. You see, we are more world-traveled than you might suppose

Every post you make I think to myself you are really sinking to the deep end. Dude, are really losing it, you need to think about getting help somewhere. You never have a good thing to say about anything, to bad for you.

PB made an un cool comment and has been duly called on it. He sort of apologized so I'm moving on as well.

Back to Buffet

Yeah, Buffet was cheer leading a bit but why not? With all the gloom and doom in the press he simply is reminding us to keep a long term perspective with respect to investing in stocks. The stock market is the only place where people run away when there is a 40% off sale, LOL!

Edited October 19, 2008 by Lancelot