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Berkshire Hathaway Inc. Message Board

  • russ_21401 russ_21401 Oct 17, 2008 4:40 PM Flag

    Listen up

    Buffett has only made FOUR public market "calls" in his career, spanning 40 years.

    Each time, he has correctly nailed a huge macro shift in investing. And those were the ONLY secular market shifts during his career. He didn't miss ANY. In other words, he's been perfect in spotting the make-you-rich long-term market shifts. Maybe that why he's the richest man in the world.

    1968: Gave partners back their money, said he was retiring. Couldn't find anything to buy. In other words: Sell! Right at the peak of the "Go-Go" stock mania.

    1974: The famous "I feel like an oversexed man in a harem" quote in his magazine article. Buy!

    1999: Nov. 22 SELL. In Fortune magazine. He came within two months of nailing the very top.

    Oct. 17, 2008__ BUY.

    The only other time in his life when Buffett said "Buy," the S&P 500 only had three negative years __-7.4, -5.0% and -3.1%__ in the next 25 years until he said 'sell' in '99. Since then, the S&P has AVERAGED -4.9% a year. Including inflation, real returns in the stock market since his '99 call have been among the worst in history __about -8%-a-year for nine years.

    As I always say, this is like Einstein offering to do a calculus problem for you __with all your money at stake. Do you say, "No thanks. I'm pretty good at math myself."

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    • oops...

    • The most important Annual Report letter that Warren has ever written is being composed this week. Does the Oracle still have it? Or did he stay on the stage abit too long? Stay tuned.

    • OK, what about now?

    • The last word is the key word in your post.

    • One other tid bit worth mentioning: since 10/17/08 when he made this "buy" statement, S&P 500 is down 18%. That's a lot. So, at best he was early. Market will have to advance another 20% or so just to get back to where Warren said buy.

      Two ways to look at this:

      one is he was wrong and maybe he is missing some critical points (he is missing some big stuff...we are in a socialist coup before your eyes and no one is stopping it).

      The other is that if he said buy then, and the market is down another 17%, then perhaps it is REALLy time to by now because things are even cheaper.

      Also curious that the guy then proceeded to sell PG and JNJ and beging a binge of senior-capital-structure bets in bonds and preferred stock...nothing in common stocks. I found the whole thing to be disengenuous. "Hey America, buy stocks! But pay no attention to the man behind the curtain buying up negotiated fixed rate bonds and preferred stocks...and SELLING common stocks."

      I've been a long-term shareholder of BRK, and I am profoundly dissapointed in this guy since this whole debacle began to unfold. He says one thing, does another, supports a socialist regime who is taking over the place. He says nothing to explain a realistic valuation of these index put contracts which is directly affecting the stock price. I would say he has gone from being very shareholder oriented to...downright arrogant.

    • That's all nice except that Buffet has long maintained an almost leap of faith mindset with respect to the United States...that it has rule of law...that it will always find it's way of of its problems, etc. The problem is that we are moving head first into socialism, nationalizing the banking system, we are about to squander another $800 billion on "stimulus", which is just a heist. So his underlying premise, his leap of faith, is no longer holding, it's crumbling. The parasites are taking over and it will be some time until they are done consuming the host.(ironic too that for a guy so brilliant he actually politically supports socialists).

      Take a look at what happened to the market in japan when they did pretty much the same thing. Here we are two decades later and they are still suffering the consequences.

      Wake up, you are going through a bloodless coup as we write, right before your eyes.

    • Dude, why don't you answer this? Papa didn't do a secondary on BYD at $50+. It's stock now sells for $3. You were at the annual meeting, did you ASK Papa why there was no secondary at $50+? You LOVED the stock at $38. Is it a good buy at $3?

      Thanks, I'm sure you won't respond with anything substansive because that's your style.

    • His personal account is barely a blip on his radar screen.

    • <<So ... I’ve been buying American stocks. This is my personal account I’m talking about>>

      When Warren Buffett says the above quote, is there any confusion about what account he is buying American stocks?

      -TF

    • Lets refresh. Now that we have had plenty of time to judge this call:

      If you listened up, and presumably acted like the average goof/WEB worshipper and ran out and bought BRK to "Buy America" because "I am" here's what happened:

      Oct 17 Feb 20

      BRK 3976 2387 BRK down 40 percent


      < No, it doesn't. He specifically said he was buying equities. That is not consistent with selling American equities like JNJ, COP, PG.

      From the Oct 16, 2009 call, excerpted from the NY Times:

      <Buy American. I Am.

      By Warren E. Buffett

      . . .

      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. >

      So this begs the next question; since prices are now down about 17 percent since this call and thus are presumably "looking attractive" even more than they were on Oct 17, is WEB 100 percent in common U.S. stocks? Haven't seen that announcement.

      Worse, at the same time he urges everyone to buy American equities, he tells them to get out of cash equivalents - about the only asset class that has not lost value since Oct. 16:

      < Today people who hold cash equivalents feel comfortable. They shouldn’t. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value. >

      Got that completely backwards. Both as to buying and selling.

      I suppose apologists will bleat that this is his personal money, as if it is reasonable to expect the average goof reading or more likely just hearing on CNBC the "Buy America. I am" will dig in and read the article and seize upon the note that it is his personal money [did not say he was doing anything different with BRK, did he?] and assume that they should therefore NOT Buy America. That's not likely. No, the average goof, indeed, even the reasonable average person who is for some reason a Buffett worshiper, probably got all excited and giddily went out and loaded up on U.S. equities and told others to listen up and do the same.

      Just before equities resumed being dumped en masse.>

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