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Warren Buffett editorial in NYT: Buy American. I Am.

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Re: Warren Buffett editorial in NYT: Buy American. I Am.

#51

Post by trevelyan »

newt0311 wrote: post #32
trevelyan wrote: post #19

Earlier quoted context omitted.

I wouldn't buy equity or debt at this point. There are companies with massive equity holdings who have bought credit default swaps to hedge against various losses. The CDS market is worth around 800 trillion at this point. Most of these contracts will work out without causing problems. That being said, the last plunge came a day after the settlement of Fannie & Freddie for roughly 90 cents on the dollar. We do not kn…

Indeed 800 trillion is a big number. So big that I would check your sources if I were you.

You're right. My numbers are off by an order of magnitude. I guess we'll see where we stand in late November then.

Re: Warren Buffett editorial in NYT: Buy American. I Am.

#52

Post by gscott »

Buffett was heavily invested in the Euro. When the stock market crashed he simply took his Euro's, cashed them in for dollars, and bought US Assets that were down. Most regular US citizens were invested at the top of the market and just can't afford to go buy more.

Re: Warren Buffett editorial in NYT: Buy American. I Am.

#53

Post by mynameishere »

ksvs wrote: post #48
richcollins wrote: post #29

Had you followed that advice after the Japanese crash of 1990, you would still be down almost 75%: http://finance.google.com/finance?q=^N225

He's not saying buy stocks after any crash, just after this one. The Japanese crash was a unique one because a corrupt old boy network of companies holding one another's stock and banks refusing to write off bad debt caused the fall to be artificially prolonged.

Good point. And in Japan the government responded with massive public spending and rate reductions.

Re: Warren Buffett editorial in NYT: Buy American. I Am.

#54

Post by eru »

dmv wrote: post #37
prakash wrote: post #13

A word of caution: Don't invest if you can't sleep soundly at night. Buffet can probably afford to lose a few billions here and there, but you probably can't.

From what I recall of the last analysis on this subject, I don't think he has 'a few billion' in his non-Berkshire holdings. The non-Berkshire holdings are basically the money he has accumulated since personally buying Berkshire Hathaway, with his fairly modest salary. He has often described that he could (and does) beat Berkshire's ROI as a small investor, which is why his non-Berkshire holdings are in the millions.…

About the dividends (http://www.focusinvestor.com/brkfaq.htm#Q7):

"We feel noble intentions should be checked periodically against results. We test the wisdom of retaining earnings by assessing whether retention, over time, delivers shareholders at least $1 of market value for each $1 retained. To date, this test has been met. We will continue to apply it on a five-year rolling basis. As our net worth grows, it is more difficult to use retained earnings wisely." Source: Berkshire Hathaway's Owner's Manual

Mr. Buffett:: "We will either pay large dividends or none at all if we can't obtain more money through re-investment (of those funds). There is no logic to regularly paying out 10% or 20% of earnings as dividends every year."

Charles Munger: "If you went to the leading schools, they wouldn't teach dividend policy this way." Source: My notes from the 2000 Berkshire Hathaway annual meeting

Re: Warren Buffett editorial in NYT: Buy American. I Am.

#55

Post by SwellJoe »

aaronblohowiak wrote: post #44
ca98am79 wrote: post #39

Earlier quoted context omitted.

Dude - Buffet didn't become the richest person in the WORLD by being altruistic. Think about it.

[citation needed] - he wasn't a crooked thief. There is a surprising lack of scandal surrounding him (i'm not one to care what consenting adults do in privacy.) He is a substantial philanthropist and value-based investor.

I'm not sure I understand how a lack of badness equals "making investment decisions based on altruism", or how they can be conflated in any way.

The way I'm reading the "debate" here is ca98am79 saying, "Buffett has no history of investing for altruistic reasons. He invests to make money, and is the most successful person in the world at doing so." And you're saying, "Stop calling Buffett a crook! He's a value investor and a philanthropist!"

He, obviously, didn't call Buffett a crook. He said that Buffett is a successful investor that invests to make money.

It's like two totally different conversations where both are true, but they aren't talking to one another.

Re: Warren Buffett editorial in NYT: Buy American. I Am.

#56

Post by dmv »

eru wrote: post #54
dmv wrote: post #37

Earlier quoted context omitted.

From what I recall of the last analysis on this subject, I don't think he has 'a few billion' in his non-Berkshire holdings. The non-Berkshire holdings are basically the money he has accumulated since personally buying Berkshire Hathaway, with his fairly modest salary. He has often described that he could (and does) beat Berkshire's ROI as a small investor, which is why his non-Berkshire holdings are in the millions.…

About the dividends ( http://www.focusinvestor.com/brkfaq.htm#Q7 ): "We feel noble intentions should be checked periodically against results. We test the wisdom of retaining earnings by assessing whether retention, over time, delivers shareholders at least $1 of market value for each $1 retained. To date, this test has been met. We will continue to apply it on a five-year rolling basis. As our net worth grows, it is…

Keep meaning to make it to an annual meeting. I'm not sure if this year's circus will be better or worse.

Thank you for elaborating on the dividend comment. I certainly was not trying to imply that it was a negative. It just emphasizes that while Mr. Buffett may have as much money as anyone in the world, he does not have it in a private or liquid form outside of his role at Berkshire Hathaway. Like many growth of company-based Billionares (Gates, Bezos, etc), there is a great deal of transparency (an annual report!) in investment philosophy. Contrast with someone like Stephen Schwarzman.

Re: Warren Buffett editorial in NYT: Buy American. I Am.

#57

Post by dejb »

ca98am79 wrote: post #39
dejb wrote: post #36

Buffet is undoubtedly a great investor. But I have a slight feeling that could be doing this more for altruistic reasons rather than personal profit. He might believe that he can inject enough confidence in the system by his reputation then maybe he can help improve things. Not necessarily by enough for his investements to pay off but to avoid a worse fate for the financial system. Remember the guy has committed to g…

Dude - Buffet didn't become the richest person in the WORLD by being altruistic. Think about it.

Well he won't be the richest person in the world after he completes giving away 30 Billion of his money the the Bill and Melinda Gates Foundation either (if he is alive by then). He has stated he doesn't plan to pass on a significant share of his money to his children. Think about it.

Re: Warren Buffett editorial in NYT: Buy American. I Am.

#58

Post by jhancock »

newt0311 wrote: post #31
jhancock wrote: post #10

Earlier quoted context omitted.

I mostly agree. You have two choices with buying American stocks now: 1 - play the day trade game and squeeze out margins as the market is wild from day to day 2 - play long, buy great deals and hold for years. The only people that can play option 1 well are serious traders that have tons of time, cash, and really know what they're doing (or just have dumb luck, but applies to anything you might do with money). The o…

Number 1 is idiotic. Historically, investors who hold shares for more than 6 months get 9 times the returns of investors who churn on a short term basis. Furthermore, there is no way to predict how stocks will behave in the short term. In the long term, we can be reasonably certain that they will appreciate. In the short term, we have no idea. Furthermore, if you are not an institutional investors, federal income tax…

yes, number 1 is idiotic, for me and for most others.

The second route also doesn't work real well for most small investors that don't have a team to constantly analyze what are the best long term holds. My point is simply that I do listen to Buffet's advice and haven't disagreed with him. Its just that most cannot play the game in the same way he can.

Most small investors can only afford to allow large companies to manage a portfolio for them (normal 401k fund management companies). Look at the current balance sheet of these folks. They are destroyed. The fund companies didn't take care of them. Have you heard of any fund company that sent messages to their small 401k customers telling them "hey, you need to redistribute your portfolio NOW!!! Its what Buffet is doing. Then in a year or so, we'll take all that cash we switched you into and buy stocks again when the market is low". Hell no. I'm not saying the management companies are completely out of line for not taking care of the little guy. What I am saying is the little guy can't ever expect that kind of treatment. It all means that only a few get to actually partake in Buffet's wisdom.

Re: Warren Buffett editorial in NYT: Buy American. I Am.

#59

Post by fauigerzigerk »

jimbokun wrote: post #21
jhancock wrote: post #10

Earlier quoted context omitted.

I mostly agree. You have two choices with buying American stocks now: 1 - play the day trade game and squeeze out margins as the market is wild from day to day 2 - play long, buy great deals and hold for years. The only people that can play option 1 well are serious traders that have tons of time, cash, and really know what they're doing (or just have dumb luck, but applies to anything you might do with money). The o…

Aren't the people who play game number 1 largely responsible for the current financial mess? Maybe not day traders per se, but that sort of mentality of everyone thinking they are in the top few percent of investors and able to beat the market.

No, because this time it's not a stock market bubble that burst. It's a credit bubble caused by very low interest rates. You could say that the stock market bubble of 2000 lead to the low interest rates, but it's not true. Money supply has sharply increased in the US since the 1980s. Now it's payback time for a few years I'm afraid.

Re: Warren Buffett editorial in NYT: Buy American. I Am.

#60

Post by asdf333 »

mynameishere wrote: post #53
ksvs wrote: post #48

Earlier quoted context omitted.

He's not saying buy stocks after any crash, just after this one. The Japanese crash was a unique one because a corrupt old boy network of companies holding one another's stock and banks refusing to write off bad debt caused the fall to be artificially prolonged.

Good point. And in Japan the government responded with massive public spending and rate reductions.

haha good one.
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