360dwellings - The Denver Real Estate Blog

This commentary from Warren Buffet was posted in the Opinions Editorial section of the New York times on Oct. 16th.  I didn’t post it then but I really think it is very fitting now just 2 weeks later.  Warren Buffet is flat out brilliant, and I really trust what he has to say about our current economic situation. I love this quote from the editorial, “Be fearful when others are greedy, and be greedy when others are fearful.”  Pretty much sums it up.

I think it was such a smart move for Barack Obama to seek out Buffet as an advisor on the economy during the election.  And now that Obama is president elect, I sure hope that he continues to lean on Warren Buffet and other finanical savants to get our economy heading back in the right direction.  The Real Estate market in Denver has a lot of positive indicators, but if people are still concerned over a dismal economic outlook then we will not grow as many of us our hoping for.

By WARREN E. BUFFETT
Published: October 16, 2008

THE financial world is a mess, both in the United States and abroad. Its problems, moreover, have been leaking into the general economy, and the leaks are now turning into a gusher. In the near term, unemployment will rise, business activity will falter and headlines will continue to be scary.

So … I’ve been buying American stocks. This is my personal account I’m talking about, in which I previously owned nothing but United States government bonds. (This description leaves aside my Berkshire Hathaway holdings, which are all committed to philanthropy.) If prices keep looking attractive, my non-Berkshire net worth will soon be 100 percent in United States equities.

Why?

A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors. To be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions. But fears regarding the long-term prosperity of the nation’s many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now…

Read the rest of this New York Times article here.

And here is some more information about Barack and Buffet.