Should You Still Believe in Buffett?

We have to admit that we may be at the end of the road for Capitalism.

If this is your background and you don’t have at least a million in cash in the bank you don’t get to report on the economy…bachelor’s degree in Russian/East European & Eurasian studies and a minor in economics. Hmm…minor in economics. Is that like basket weaving 101??

Let’s just say, “He is beyond my pay grade!”.

I think this mess is beyond anyone.

Buffet or muppet. whats the difference? No one knows whats going on and least of all everyone who calls themselves an economist or financial expert or a fund manager or a person with a MBA. We are all sitting with a bag containing our retirement savings and it is getting close to empty and we are not knowing what the future is going to be. The government is bailing out every crook on wall street and the people on main street are getting nothing and people are feeling powerless. Que sera sera. Whatever will be will be.

Yes I Do makes good points except one does not need a PhD in Economics to understand the difference between long-term and speculation, rather , a strong stomach. The country could collapse, anything is possible but the chances are greater that it will recover and stocks will advance.

Well, Buffett can stand to lose the money he recently invested. When you have billions it’s no big deal. Most of us on the other hand are hurting and our 401K’s have taken a huge hit that we can’t afford.

IMO, the stock market is just a casino that no one can predict with any certainty. If you look at the S&P 500 at the beginning of this decade compared to where it was even B4 the stock market upheaval in October, any $$ invested in Jan 2000 was basically dead money. Even someone like Buffet can’t be consistently successful investing in the stock market so why should your average small investor?

Andy Gainesville is right Longterm could mean 10 years but may be longer. We may never see growth to the extent we saw and that is besides the point, we expected a steady rise or even a bumpy ride but this is simply catastrophic to the extent that there is no trust in the system like it has forever lost our confidence and no matter what happens politically, someone has taken off with the loot and we are holding an almost empty bag.

I will NEVER stop believing in the man from Margaritaville.
Posted by: helloworld | Nov 12, 2008 5:10:41 PM
yes and the coral reefers too!

I do hold an MBA but this does not make me an expert but it does give me one up. Someone said here you have to have a PhD to talk about the economy. I disagree. We make the economy hard but it is simple almost to logical. people are whinning due to the knuckleheads leading this parade. We are asking the US Govt to bail out the banks/investment houses while the US govt is trillions in debt. Go figure!its like the 3 blind mice – where the f— are they going? The time now is right to buy everything, including real estate. Buy low sell hifh – how much simpler does it have to get.
“What is it about you people who do not understand that “the fundamentals of the economy are strong,” and that we are only into a “mental recession.” What a bunch of whinners we all are! ;-)”

That’s Jimmie Buffet stupid not Warren!

Too little, too late ABC. For the last year or so, everyone in the main-stream media were touting Buffett’s support/endorsement of Obama. I guess we have no choice now but to hope that his presidential endorsement works out better than his recent investment advice…

The man is so out of touch with reality with his $60,000,000,000.00 (which he accumulated under minimal regulation) net worth. I find it ironic that he is now more than happy to have the rest of us pay higher taxes and give more to uncle sam as we try to achieve success. Buffet voted for the socialist, he has no more credibility except with those eagerly waiting for their handouts

As the article points out, nearly every Buffet pick this year is a loser. As I think we’ll soon find out, his other pick, Obama, will keep his losing track record intact.

Dear Bob at 4:23 PM: I do not believe we are at the end of the road for capitalism. We are at a cross road though. The people have spoken with the last election and we will try Socialism for a while. When Americans realize it produces less, they will have no choice but to come back to Capitalism. Only hope when they do, they abandon John Maynard Keynes Economics (Keynesian)This is the Economics that Wall Street just used and usher in Ludwig von Mises Economics. Abe Lincoln

Thank You, RYAN! When obama was selected, I asked my son to put a big sign out saying NOBAMA! But, we didn’t. I thought it would just be more attention to him!

When we hear the term, “the fundamentals of the economy are strong!” It is important to know what that means. One of the factors used is (GDP) Gross Domestic Product and that is up 3%. This in no way is to suggest it is a cure all, but it is important to see the whole picture. Abe Lincoln

I bought some stocks a month ago and I’m not a millionaire yet. Capitalism must be over.
Well, it’s sheep like you people who buy when stock is high and sell when it’s low that ultimately help the rest of us make money.

Ryan bby – Why do you bring Obama into this discussion? You act like you know the outcome of an Obama administration before he ever take offices. If you have the ability to know the future, why aren’t you pointing out how you predicted that a G.W.Bush administration will lead us into another depression? In fact, tell us how many jobs will be lost before Bush leaves office and what the Dow Jones will be on that day. Are you just whining or do you really have this gift?

If Ryan was that prescient he’d be richer.

As many have pointed out, stocks are on sale right now at bargain basement prices. Some of their drop in value is justified by the economic situation, but much of it was driven by blind panic a couple of weeks ago. That panic already pushed stocks so low that they were trading well below their real value. They still are. Watch the bounce when people get wind of that fact.

” Where was this fool 30 years ago …” Getting richer than you and I, that’s where. So who is the fool?

chuck Nov 12, 2008 4:52:47 PM, what dashawn wrote was not cool at all. but does that make your racist rant noble? race IS a serious situation. and just because we have an African-American president won’t end racism. that has to happen in each americans’ heart. it just seems like you were waiting for a post about race so you could let loose with the hate. hate won’t help the economy or race relations.

It’s funny that those who ridicule Buffet have never been in his position of wealth. Those know-it-alls are probably lucky to have a net worth. People don’t seem to question Trump when he speaks so why would they question Buffet? Until you’ve been in his shoes I wouldn’t talk.

Isn’t it odd that so many are crying out for the demise of capitalism?Even high ranking officials of other countries,it makes you wonder if the situation was deliberate or not.Remember folks,the first Billionaires in America happened becuase of the Depression.So folks,buy low ,buy low!!

My attenna went up when he tried to sweet talk everyone back into the market….after he said derivatives were a ticking time bomb. Way to go Hommy! Stay in the market Buff. I’ll throw you a buck at the street light. This economy isn’t coming back. I’m surprised he hasn’t said buy commodities. I’m sure he secretly has. I’ll make a call…buy food! Rice and beans. Fill your garage. I’m expecting the oil nations to start dumping their dollars.(I’m sure they’ve started already) In trillions and trillions. Happy about low gas prices? They aren’t. One orange and one dollar in the boat. Orange worth dollar….11.00 in the boat. Orange worth 1/10 of a dollar. This is not rocket science. It’s called super duper inflation.

Try this, look at Berkshire Hathaway as common sense investing, he buys low and doesn’t sell unless he has a damn good reason (and even then he usually sells at a profit). He understands the concept of recession-recovery-growth in the markets.
The bulk of the problems now is that most of the economy is in the tank because of outsourcing/offshoring to the tune of over four to six billion dollars lost from the U.S. Economy on products now made in China instead of here. The profits made by corporations that have moved operations were great in the short term, but long term they’ve slit their and our throats (you need customers to buy your products, if the potiental customers don’t have employment or adequate employment then they cannot buy your products no matter how cheap they are.

Anyone thinking that they can keep their money in one place and never see a loss (401K plans) is delusional. Investing is a form of gambling – and a smart person hedges their bets. I am better off financially now in this bad market because I moved my money around to safe havens that still are making money (term deposits and the like), while everyone around me is moaning about the loss of their retirement funds. Don’t leave investing up to other people. Check out your options and play the economy – not the stock market. I agree with Mr Buffet: ‘when everyone around you is afraid, that’s the time to be brave.’

“This economy isn’t coming back.” Bet on that. And you’ll be complaining in three years you didn’t get on the train.

Reading these blogs I am so happy to learn that so may cab-drivers and waiters know better how to run the country than our elected leaders and know better how to make money than our millionaires.

correction-no matter what you HEAR. Sorry, I just don’t like to sound like a stupid Communist or anything.

Hey, I voted for Obama and as a Christian I am not allowed to gamble (not allowed in stock market) and so have not lost a thing, not looking for a handout, just looking for someones else w/ low risk tolerance to state other obvious – isn’t there a way to contain the risks of stock market to those who invest in same? Duh?

“IF IT BLEEDS IT LEADS” Truer words were never spoken.I think the news media in general should CREATE more positive stories instead of playing the same broken record. Thanks to you and the negativity of the media you are molding the psyche of millions.Why don’t you give the statistics of the impact of negativity on the public psyche? Maybe you don’t intentionally want to so you can sell more news time.
If you want something to startin a positive way lets talk about HEALTHCARE>
Why don’t you start with how many BILLIONS are spent in advertising to the general public.What a joke and what a waste.Why advertise prescription drugs to the public when they cannot get them until they are seen by a doctor or maybe we can eliminate the doctors by placing all those prescription druds in an ATM machine and you could just drive up and treat yourself!
You wanted change well change tour format instead of the same old bleeding!

Patriot – We agree that we should be taxed fairly and I don’t have any disagreement about the same rate for everyone. An example that most people miss is that those making less than $100,000 pays an extra 12% of all their income toward social security, medicare, etc. Now some may think that is fair since they may need it more than the rich, However, it is not fair because only part of it goes to those functions. A huge share is taken by government to spend on earmarks and other tax breaks for the wealthy. There has been over 3 trillion dollars spent this way from just social security. Also, I disagree with your idea that the rich are rich because they worked harder than everyone else. I know a lot of middle and lower income people that have worked hard and never had the breaks that many of the rich had. There are some like your relative that did get there by working hard, but often it takes more than hard work and intelligence. So of it is good luck in being in the right place at the right time with the right ideas. Finally, I don’t know of any income tax bracket that is 50%, so you must be talking about some other taxes that we all forget about, like sales tax, gas tax, property tax, phone tax, license plate fees, hotel tax, etc. I bet we agree that we are taxed too much and government wastes it no matter if it is republican or democrat.

He is as much of a statesman as anything. His words & actions have had a larger cause than short term gains. He is doing is part to help everyone stabilize the confidence we have in the markets. His wisdom will be rewarded in time.
Thanks Warren!!!

rockychance – I disagree with you on jobs need to come from only private companies. In most cases I would agree, but I also remember that in the great depression private enterprise could not do it alone and goverment came up with many jobs to keep idle hands going and emtpy pockets with a little cash. Also, I don’t like the concept that private enterprise are always the good guys. Take a look at the rich corporate executives that take huge shares of the corporate money even when the company is losing money and laying off thousands of workers who had nothing to do with the failure of the company. Some of these executives are crooks, but most did legal things that benefited themselves regardless of the impact on others. In other words, they were greedy.

Admittedly, I’m a novice when it comes to the stock market and the workings of the financial sector. After my father died, I became my mother’s POA. I was advised by one of her attorneys to invest her money in a low-risk, conservative portfolio to help cover school and property taxes. That’s exactly what I did and she lost $20,000 over this past month. I thought low-risk/conservative meant that you don’t gain as much when things are good and don’t lose as much when things go bad. I called our financial advisor when I noticed things going south. He kept saying…don’t cash out…hang in there. Things will rebound. I listened to him and the roof completely collapsed shortly after that. I trusted him with her savings and regret I didn’t take command of the situation. Was he really going to say something like…”Things don’t look too good. I advise you to sell and get out of the market before it gets worse.”? No! There is a conflict of interest in the current financial advisor/client relationship. Their loyality is with their company first. Their primary concern is their job and career. I feel as though they sacrificed their clients money to save their own necks even when they saw the storm coming. Am I wrong? I welcome your comments.

Gabriel: Low risk/conservative should mean that your percentage loss in the past few months is less than the percentage loss of the S&P500. If your loss was greater than the S&P500, or even equal to it, you were not given a low risk portfolio (which will still lose money at times, but should be buffered with bonds to reduce losses).
Selling as the market drops is a classic way to *minimize* your returns. In general, panic selling is a bad idea. Provided your allocation (stocks vs. bonds – the fundamental risk exposure) is right to start with.

“That’s exactly what I did and she lost $20,000 over this past month.”
$20,000 over what she paid for it or $20,000 from the market high? If it’s the former, she needs a better financial adviser.

“True Capitalism? It works the same way that Mother nature does, with the best individuals and businesses surviving and stupid ones dying out. ”
If your child gets leukemia and you can’t afford the medical bills that would save him, remember you said that.

The problem with a flat tax is that it helps to institutionalizes a two tier system, unlike a progressive tax system. You create a caste system between the very rich and the very poor, whereby transmission of wealth becomes a function of birth vs. merit. Social mobility based on meritocracy, which is the true driving force for innovation in the America will be stifled. In effect you create generation of aristocratics who can live off their daddy’s money in perpetuity. I favor meritocracy where harding working poor person has a chance to rise, and a shiftless rich person can fall.

Jimmy Buffett is a liberal idiot whose music sucks.

Stock market, when it was a free market was never for the skittish or faint of heart it was about risk and possible reward. Now it’s about government safety nets and corporate welfare I’d sooner burn my money than give it to Wall Street thieves.

granny – Your math is way off. To do what you said, it would cost $111 trillion. This is substancally more than our current national debt of $10 trillion and it was only $5 trillion ten years ago. I don’t think we want to make the national debt more than 10 times bigger in one year, unless you want the cost of a new car go from $15,000 to about $150,000 (With the compounding effect it would have on other currencies, $150,000 might be more like our cost for a loaf of bread.)

I remember in the late 1990′s and early 2000′s journalist were telling us that Buffet had lost it. The magic was gone, and he was no longer the savy investor everyone gave him credit for being. When the tech bubble exploded, Buffet wasn’t part of the collateral damage. He has a disiplined approach to investing and will not deviate. It’s worked for him the 40 + years he’s been investing, and I have no doubt it will continue to serve him well. He’s been right too many times not to bet on him now.

“Mr. Buffett is one of the major problems with the foreclosures, he was willing to finance anyone who had a breath, credit score didn’t matter, and in doing so put a lot of hard working people out of work because we couldn’t compete with his personal company financing.”
Face it. You don’t have a clue about who Warren Buffett is do you?

On the stock market, no body can pinpoint where the bottom of the down curve, even Buffet can’t. Anyway, he had good intention, that is, to buy America. He has been smart enough to know in the past that he can always gain by buy low and sell high.

Optimus Prime: I beg to differ with you. Listening to Warren over the years has made me a very wealthy man. In 2003, he stated that swap derivatives and default swaps, “Are the weapons of mass destruction of the financial industry.” He wouldn’t and didn’t touch them.
These derivatives, by the way, were the sub-prime (gutter) mortgages that carried high risk which were sliced, packaged and sold world wide by Wall Street Wiz Kids to the tune of $55.6 trillion dollars. They have a default rate of approximately 12%, which means there’s $8 trillion dollars of bad debt out there floating around. Since world governments have raised approximately $3 trillion as a rescue/bail-out, there’s certainly a ways to go.
This will end in a lengthy, severe and prolonged worldwide recession; if we’re lucky.

Capitalism is the victim here not the offender.
All of these problems stem from the politically motivated central bank shenanigans. The Central Bank has one tool injecting liquidity, which when you or I do it, is called counterfeting.
Recessions have gotten longer and deeper in the 95 years since the Fed’s creation and will until it’s demise.
Warren should retire, like Einstien his glory days are behind him and he sounds silly when talks about economics (Einstein babbled about socialism) because he does not really know anything. I never met a rich person who did not feel better than a poorer one, bit to conflate good investment records with an economic record is folly.
Sec Paulson is a prime example an egomaniac insider who get rich looting 401K’s has no idea about what to do on the economy.
Obama will be like FDR at the end of his first term: unemployment will be higher, inflation and taxes will be higher, which by any real measure would be called failure.
Capitalism had noting to do with this debacle becuase the United States has never had free enterprise in spite of how loudly Bush II and Fox News trumpets it.

My advice to you is to stay away from the stock market. It is a BIG gambling casino. They will steal your money believe me. The wall street insiders watch every money flow movement into and out of every stock. They wait to strike a blow and head for the doors like badits. When Your hard earned money has helped to move the price of a stock from say $10 to $15 dollars per share, they strike a death blow. They have watched and determined that enough fools have piled up their hard earned money, They sell, grabing every dime you contributed in your stupidity to make some profit. The price of the stock drops and keep droping and in most cases never ever recovers. The next couple of weeks they spend at Bahamas or some luxury location with an expensive prostitute or girl friend enjoying your money. Stay away from the stock market. Over the long run -you will loose. Guess who determines the long run-the market insiders. The odds are stacked against you. A stock that sold for $60 dollars yesterday and is now selling for $2 dollars today means that someone has a pile of that money in his pocket. The insiders never revisit a stock they have crashed and made away with their loot, they move to another game and wait for fools to pile on again. By the way Warren Buffet rarely buys individual stocks. He buys businesses. He played stocks a long time ago. Stay out of THE CASINO-YOU WILL ALWAY LOOSE. HAVE YOU NOTICED THAT EACH TIME YOU MADE SOME GAIN AND HUNG AROUND FOR MORE- YOU ARE GURRANTEED TO LOOSE YOUR INITIAL GAIN. IT IS A BIG BIG CASIN- NOP. DO You remember the day traders of yesterday, they were clubbered and have retreated for good. I also doubt that foreigners, who account for about 40% of US stock moves will ever put their money back in the US stock market. That is one reason this bear market will bite very deep and for a long time if it ever recovers.

INVEST IN OUR STOCK MARKET! Our economy is based on our stock market. If we take our money out of it, we will go into the biggest depresion you have ever seen.
Our stock market is nothing like a casino. Yes it is risky, but it stimulates our economy. The more people that invest in it the higher the profit.