Enterprising Investor Forum

Buffett is buying! Friday, October 17, 2008

In his latest opinion piece, Warren Buffett reached out to the public and wrote: “Buy American. I am.”

Here are some of the key points which were published in today’s New York Times:

• The financial world is a mess, … 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.

• 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.

• 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.

• 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.

• Equities will almost certainly outperform cash over the next decade, probably by a substantial degree.

Read the whole piece: here.