Warren Buffett has once again being optimistic (when most are not), sensing opportunities amidst the current credit crisis. On 16 Oct 08, he published an article in The New York Times, indicating his move to convert his personal bond holdings to American stocks.
He went further, “If prices keep looking attractive, my non-Berkshire net worth will soon be 100 percent in United States equities”, displaying a strong vote of confidence.
His investing dictum states that, “Be fearful when others are greedy, and be greedy when others are fearful.” At the current situation, he deems that the market is fearful even for seasoned investors, triggering his senses that the opportunities are here.
Citing the market low in 1932 (where it gained 30% in the following year), he mentioned that, “…bad news is an investor’s best friend. It lets you buy a slice of America’s future at a marked-down price”. This has been one of the reasons to his massive wealth today.
As for people who believe that cash is king, he has an advice – “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.”
After reading the article, I do have some thoughts – Am I going to follow him and snap up value stocks now? I do have my concerns – Do I have the tenacity to hold the stocks for 50 years? Will I need the money? If I can confidently say yes and no to the questions respectively, I am in for the game.
Likewise for you, would you be able to answer the 2 questions without any reservation? What would you do? The opportunity is here, but are you ready for it?
You may also like:
- The Winning Investment Habits of Warren Buffett & George Soros by Mark Tier
- The Warren Buffett Way – Robert Hagstrom
- Warren Buffett – “I’d be a bum on the street with a tin cup if the markets were always efficient.”
- Warren Buffett – "Our method is very simple…"
- Warren Buffett – "Risk comes from not knowing what you're doing."
- Warren Buffett – "Rule No.1: Never lose money. Rule No.2: Never forget rule No.1."
- Why buy stocks for the long run?
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