Billionaire Buffett declares he's buying stocks now

NEW YORK -- Years from now, it might be remembered as a legendary market call from an investing legend — the mother of all buy signals.

But for now, with the stock market one of the scariest places on Earth, it's simply a bold call, albeit one grounded in well-established investment theory. But it's a call that even the most committed long-term investors may not have the guts to execute on their own.

He told the world Friday in an op-ed piece in The New York Times under the headline, "Buy American. I Am." He acknowledged that the financial world "is a mess," and headlines are "scary" and will stay that way for a while. He said he has no idea if stocks will be higher or lower a month or a year from now.

"Bad news is an investor's best friend," he wrote. "It lets you buy a slice of America's future at a marked-down price." Cash, he said, is not the haven people think it is. Policies to fix the system will be inflationary and erode the value of cash.

Despite Buffett's declaration, the Dow Jones industrials fell 127 points to 8852.

Should individual investors buy stocks? "If you have market staying power, this is the time to listen to a guy like Buffett," says Timothy Vick, author of How to Pick Stocks Like Warren Buffett.

But there's a catch: Buffett has billions to ride out the financial storm if it gets worse. Mom and pop investors don't. Says Vick, "Can you outlast what the market might throw at you?"

A simple rule, Buffett says, dictates that he buy now: "Be fearful when others are greedy, and be greedy when others are fearful."

Buffett's public market calls are rare. In 1974, when stocks were nearing the end of a 48% drop, he said, "Buy." The Dow soared for two years. In the late 1990s, he warned folks to avoid tech stocks. The Nasdaq plunged nearly 80% from 2000 to 2002.