Person of the Week: Warren Buffett
The country's most savvy investor places his bets on America.
Oct. 3, 2008— -- You know things aren't going well when Warren Buffett, one of the world's richest men, is worried.
"This really is an economic Pearl Harbor," Buffett told PBS talk show host Charlie Rose. "That sounds melodramatic, but I've never used that phrase before, and this really is one."
Buffett, of course, is referring to the financial crisis that has gripped the country over the past several weeks. But Buffett is not investing like a worried man. Despite the volatile markets and unstable system, he has been pouring billions into American companies and betting on good returns, something he has been famously successful at in the past. "We've got a great system," Buffett told Rose. "And we've got more productive capacity now than we ever have. The American worker is more productive than he's ever been. We've got more people to do it. We've got all the ingredients for a sensational future. It's just that, right now, the athlete's on the floor."
Buffett, 78, is not a make-a-quick-buck kind of investor. He has made billions by investing in companies long term. Buffett's biographer, Alice Schroeder, author of "The Snowball: Warren Buffett and the Business of Life," said that his strategy is to concentrate his investments and make very few bets.
"You could get very, very rich," said Schroeder, "because you would only need to make about one investment a year, but that one you would be absolutely sure that you were right."
Buffett explains that it's all about understanding a business.
"I don't think about the price action of the stock or I don't think about what people are saying they're going to earn next quarter, or anything of the sort, or look at charts. I just try and look at the business," he said. "A lot of businesses I can't understand. I can understand Gillette. I can understand Coca-Cola. I can understand Wrigley's chewing gum. When I say I can understand it, it means I have a pretty good idea of what they're going to look like 10 or 15 years from now. That's understanding a business."
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