Buffett: Economy will remain in 'shambles'

[beeooll]

http://www.msnbc.msn.com/id/29441863/Read more... )

Comments

[cieldumort]

Was it one or two thousand points ago that he proclaimed that "NOW" was the time to buy, while not following his own advice to the little people?

[bucktowntiger]

Seems like three thousand points ago.

[beeooll]

Right at four. Late Sept was his purchase of Goldman Sachs. Dow was right at 11k (currently 7k).

[cieldumort]

Has it been that many points ago, already?

Where has time gone!

Say, maybe he really said to short stocks, but was just misquoted.

[beeooll]

Well, you know. Last week's range was 1000 points.

Yeah, he's been totally off. He even endorsed Obama's then nebulous economic policy. More odd, I imagine he's still on board.

You should quit looking at the dow and just watch the s&p. 100 point drops don't sting quite as much. :)

[cieldumort]

The farther she drops the farther she can go back up. Let her tank :)

[cd_vision]

Now, now. Buffett's not trying to call the bottom, he just knows when things are a good price compared to their future worth and past earnings. In this case he was talking about only his personal holdings, and he's got a sliding percentage of stocks to bonds that he adjusts as the prices continue to drop. For example, every time the market drops 5%, he sells 5% of his bonds and buys more stocks. It's Benjamin Graham's cost averaging system.

When bought at today's prices, I can see a whole lot of very good future values, especially when you think about holding forever. I'm with him on this, and I'm buying too.

[cieldumort]

That is a very clever cost averaging system.

[cd_vision]

It's using a fixed income system to hedge against stock loss so that you always have an income stream to support it. It works the reverse way too, if stocks are doing really well, you should be protecting your profits in bonds.

You can read more about it in Benjamin Graham's "The Intelligent Investor".

[bucktowntiger]

pwn3d