October 17th, 2008
06:07 PM GMT
Share this on:

Famed investor Warren Buffett says it's time to go shopping.

Warren Buffett says buy but is it good advice for everyone?
Warren Buffett says buy but is it good advice for everyone?

In an editorial in Friday's New York Times, Buffett says, "...fears regarding the long-term prosperity of the nation's many sound companies makes no sense."

The Oracle of Omaha, as he is known, went to great pains to insist he is not calling the bottom for U.S. stocks. "I haven't the faintest idea whether stocks will be higher or lower a month - or a year - from now."

But he clearly feels the environment of fear has created great opportunities. "A simple rule dictates my buying: Be fearful when people are greedy and be greedy when people are fearful."

Easier said than done!

This week alone, the Dow Jones Industrial Average rose 933 points Monday. On Tuesday, the market ended down 76 points Tuesday, after swinging 700 points intraday. On Wednesday blue chips tumbled 733 points. On Thursday, the Dow fell 400 before turning around and ultimately rallying over 400. Watch Bob Parker of Credit Suisse discuss your respsonses to this week's Business 360 blog question

These moves used to happen once every couple of decades. Now they are every day occurrences. The volatility has unnerved even the most seasoned investors.

Should you follow Buffett's advice and jump in?

Experts say that depends on two things; your age and your current exposure to stocks. If you are young, Lakshman Achuthan of Economic Cycle Research Institute says Buffett's advice is sound.

He thinks it is a good time to start nibbling at companies that have good management and are leaders in their business.

If you are nearing retirement and might need the money in a year or two, Achuthan thinks it may not be a good idea.

Buffett is a long-term investor not - as he himself points out - a market timer.

Stocks may well go down before they ultimately recover. Also, Buffett can afford to take some risk now, because he has been sitting in cash.

He has not been hurt by the staggering decline stock market of the last two months. If you have lost 20-40 percent of the value of your investments, you may not want to risk losing even more.

Why would Buffet show his hand? Some may think he is talking up his position, but that doesn't really fit with his personality.

Analysts I talked with say it is likely he is doing so out of a sense of concern.

He knows investors are "un-moored" as one put it. Individual investors are confused and looking for guidance. The professional money managers are looking at computer models that don't go back far enough to work in these markets.

Buffett has the benefit of experience and a tremendous track record.

Do you agree with Buffett's call? Do U.S. stocks look like a good buy or do you feel investing in Wall Street is a dangerous game?



soundoff (94 Responses)
  1. peterg

    It wil be time to invest in the stock market when checks and balances are returned to the market, namely regulations. Until the criminality of
    financial services are purged going back in is hazadous to your health.

    October 17, 2008 at 7:33 pm |
  2. Scott

    History would certainly say Mr. Buffet is right. Through two world wars, several recessions, the great depression, and countless other scares in the market, the market has always recovered. Yes, these times we now live in are different, but so are the global ecconomics and the global opportunities. We likely have not hit the bottom, but for anyone willing to invest for the mid to long term, history would also say that you won't see a better sale in your lifetime than what the market is offfering right now.

    October 17, 2008 at 7:40 pm |
  3. Elvis

    Who is the riches man on planet earth? How did he built his fortune? For someone who had built his business following the method of value investing for decades should know what he is talking about. Its not surprising few so called experts are contradicting what Warren is doing or advising. Now, can this experts please show the viewer their investment records....

    October 17, 2008 at 8:08 pm |
  4. Martyr2

    I think it is more than sound, it is brilliant! Think about it, a company that was prosperous and solid a year or two ago is now half the price. They were prosperous before because they had a solid business plan, great market position, good people and knew their business. How is that going to have changed drastically up till now? When the market eventually comes back (and it will or else it will tank with the rest of the system, and thus not be concerned with investments just where you are going to get your next meal) you will stand to make a truck load of money when it all corrects.

    I just wish I had the kind of money that Warren has so I could really make a killing.

    October 17, 2008 at 8:14 pm |
  5. Olumide

    Unlike a lot of other people who talk the talk, Mr Buffet one of my heroes has backed up his rhetoric with performance and we all know about his wealth......If he says look at stocks now, then you would be foolish to disagree......Thats my take

    October 17, 2008 at 8:17 pm |
  6. Riaan

    It's always a good time to buy quality long term shares, more so when you can get them at wholesale prices.

    October 17, 2008 at 8:36 pm |
  7. wilmer warrington

    I agree with warren buffet; in the long run the market will return Having lived and grown up in the 1929/1930s' I have seen many fortunes made and lost in my lifetime. The system allways return to the good.We the people have l;ost our respect for honesty and morality. When we find the two items again; we will survive.

    October 17, 2008 at 8:46 pm |
  8. Carlos

    He does it out of concern and responsability, he knows the impact his words can have and is using it to prevent a panic,

    Talking his position? He is a billionaire many times over who refused to leave Omaha, he doesn't need to "lift his position" riskinh\g his prestige.

    JP Morgan did the same a century ago.

    hard times but indeed full of chances for the brave

    Those who dare ....... WIN

    October 17, 2008 at 8:49 pm |
  9. tom allison

    I completely agree, the well managed companies and banks are now excellent bargains. The P/E ratios are tremendous indicators of the situation and being a Contrarian i feel it is time to buy. The bottom is not predictable for the short term but long term the signs are good.

    Tom Allison

    October 17, 2008 at 8:59 pm |
  10. Yves de Menten de Horne

    Mr. Buffett is right is as much as the latest market swings have been dictated by emotion, panic, and short-term views. Look at Energy companies : we all need energy, the emergent countries will need it more and more.
    So why do energy stocks drop in concert with financial stocks ? Investors have a need to make up for their losses, or pay up margins, and they sell anything at hand. Let's take advantage of the panic selling to reinforce our portfolios with energy stocks. Of course it takes courage to buy when everyone else is selling, but it has to be done.
    Yves, from Belgium, Europe.

    October 17, 2008 at 10:15 pm |
  11. Nicole Bianchi

    I agree completely as long as you observe the rules of thumb: do not invest money you need to live on for the next 6 to 12 months, be prepared to not have this money for a decade or so if the worst came to happen, do not become paranoid with every bump, keep it well managed and diversified. If you can abide to the rules, it is a pretty decent time to buy some stock.

    October 17, 2008 at 10:36 pm |
  12. MSC

    Not sure why Mr Buffet is "afraid" to admit that the market can be timed. Most understand what he means, and timing does not mean that you have to predict the bottom or a top.
    However, with billions well earned by Mr. Buffet and company, he has obviously timed the market relatively well...exceptionally well.

    I'm buying and agree with this blog!

    Buy, but watch your investments. There is money to be made!

    October 17, 2008 at 11:07 pm |
  13. Daniel Herrera

    It`s a good advice every time you can hold your position, even accept the possibility of take some more looses, and wait for a market recovery in a very long term.

    October 17, 2008 at 11:11 pm |
  14. Fabio

    I would consider buy stocks in other countries too!

    October 17, 2008 at 11:24 pm |
  15. Josh Jones

    Dow is going down to at least 6,000-7,000. Buffett bought alredy, he doesn't want the market to go lower, sooo he says buy buy buy NOW! Don't think so, waiting until the elections or close to it.

    October 17, 2008 at 11:37 pm |
  16. Andreas

    I would say that this could very well be a buying opportunity. Certainly many stocks are depressed well below their theoretical value (net present value of all future dividends).

    However, investors should be cautious, only investing what they can afford to lose.

    In any case, a monthly investment strategy is always a good idea.

    October 17, 2008 at 11:39 pm |
  17. Sean Karl Fourie

    I've seen worse (times...),

    As an economist I finally declare the Keynesian Interneventionist economics model the winner over the Neoclassical idealistic self adjusting. Compared to the great depression that is, the Governments of the developed world must be commended for the fast, decisive action they have taken to stem the crises, and the unity with which they have done – Well Done!
    I'm certain once people realize the magnitude of the pledges, as well as the willingness of governents and central banks to participate in a soution, that the markets recent paranoiac schizophrenic mood swings is only making some guy rich, buying low selling high as the addage goes...

    My only advise for market regulators is to somehow keep speculators out of the Oil markets (only sell to refineries etc.), and thereby reduce volatility in fuel and energy costs, which has a dire impact on inflation. After all, what started the whole crunch anyway? – it was over $140 a barrell!!! My God – we couldn't even afford to feed our cats, never mind ourselves!
    While central banks mistaken identity of Demand Pull (too much credit) and Cost Push (rising costs i.e. energy) causing inflation, the raising of interest rates only hurt anybody in debt which is just about everybody, so eventually farmers in our country couldn't afford to harvest their fields while a country starves to death next door. Yes indeed – I have seen worse...

    I don't see major improvements in the worlds economy until we can come up with an answer for OPEC and Oil feever! Or get those air compressed cars to run – would like one of those very much so, yes I would – dear Santa!
    Another cut in interest rates wouldn't hurt either,

    Sean Fourie
    BCom Hons Economics & IS (Cape Town)

    October 17, 2008 at 11:49 pm |
  18. rex

    after we buy ..... , will buffett sell ?

    October 18, 2008 at 1:27 am |
  19. smitty

    If a business or a corporation is doing well, their stocks can do
    well, only if the Associated Press and "day traders" will allow
    success to happen.
    ,

    October 18, 2008 at 1:58 am |
  20. Veronique Lau

    Oh! of course, it's good time to buy, but, the trouble is, I don't have cash. I've heard it all b4, buy low, sell high. But, you've to predict very accurately when is high, I know, I know, sell when you think the price is high, but then, we, human, will always tell ourselve, 'We'll sell it tomorrow, and when the stock-market goes-up, we put it off till another day, who can foresee this happening. Of course, there are some wise-guy out there, but. I'm not related to any, and even if I'm related they might not be bother to tell me.

    October 18, 2008 at 2:01 am |
  21. gatkin09

    It is hard to ignore the words of a man who has such an impressive track record and I tend to agree with Buffet's views if you are a long term investor.

    Any analysis of the stock market will show that even good, sound companies with strong cash flows have been hit hard during this bear market and history tells us that these companies will recover during the next bull market.

    So although it might be a nail biting few months, I think if you have a long term view it is probably a good idea to start buying and follow the advice of a legend.

    Greg Atkinson
    http://www.shareswatch.com.au/blog

    October 18, 2008 at 2:36 am |
  22. Rod

    I have a great deal of respect for Mr. Buffet's ability to make money, but I wish he would have omitted the words, "time to get greedy." The old saying about Wall Street still applies; The bulls make some, the bears make some, but the pigs make nothing but a big f...ing mess. I believe Mr. Buffet is investing and encouraging others to invest because of the loyalty he feels toward the country and the threat of further economic decline. Personally, I agree and have not left the market. By the way, I voted for Obama today and that made me feel just as good as watching my holdings increase in value. Bush/ Cheney/ McCain/ Palin make me feel like my holdings were always losing value.

    October 18, 2008 at 5:10 am |
  23. Mehmet Kurtkaya

    It is way too early. Those who do not have deep pockets and plenty of time in heir hands should wait for the market to settle. The recession is gonna be very long and there will be plenty of opportunities ahead.

    October 18, 2008 at 6:14 am |
  24. Silas Nyambok

    Well, it is quite clear the US markets is currently run on the pillars of gambling and guesswork. President Bush was the first to cast the dice and the result was – bailout. Now its Buffets turn and alas – Buy! Buy! Buy!

    Next in line please!

    October 18, 2008 at 6:22 am |
  25. Bobby Jo

    Anything else, Warren?

    The elite and insiders are the ones making the money as long as the sheep keep playing, particularly if it is investing in the short term. Furthermore, the days of long term investing are gone. This money equals debt slavery system has run its wicked course and the chickens have come home to roost. The initial 700 billion plus 150 pork bailout which has already become 2.3 trillion all told so far, is nothing more than the ruling elite (owners of the Fed and other central banks) getting back the money they put in propping up the markets (Plunge Protection) over the years and of course more so recently.

    Wake up, people. It seems that so many can't see the forest for the trees.

    October 18, 2008 at 7:30 am |
  26. George

    I agree with Mr. Buffet 100 percent. This is the best time to take up stock with good fundamental, track records and good dividend yield. Those having cash is KING at this moment. However bad the global economy, there is always and opportunity in every crisis. And there will always be new players in the market. Take gambling for instance. It will here to stay so long human beings still exist. The same goes to stock markets. There are gamblers and real investors.And these true investors are the casino operators. They will never lose!! So when everyone starts to sell due to herd mentality, the bargain hunters will be slowly but surely creeping unknowningly... When it's Buy call from the stock brokers, fund managers, these are the time when these investors has started to Sell... Buffet is again 100% correct!

    October 18, 2008 at 9:57 am |
  27. Eddy Kruissink (Netherlands)

    Buffet is right, but not sharp enough.

    There really was no housing bubble. It just was a credit-bubble leading to something that looked like a non-existing bubble in housing. Being scared that this bubble might have an impact on many people only made the illusion bigger. Buffet is right about buying, but he should advise to spend your dollars in real-estate, as far as I can see.
    IMHO there is is housing vacuüm. (OK solid shares wil rise soon enough,.). Real estate will (in the longer term, that Buffet speaks about) outperform, because the buyers in the future only will be buyers with healthy mortgages and there will be less risks involved.
    Who can find anything wrong in my arguments?

    October 18, 2008 at 11:39 am |
  28. Sam Bull

    As an elderly person and pensioner, I certainly wouldn't buy as I would not live long enough to obtain the "future gains", however I am buying what you call Mutual Funds for a younger person who has at least 10 years to go and probably more. I have seen all this before(in the 70's, 80's the housing crash in early 90's) but not so severe and now we have this. It is,in my opinion, not only Wall Street to blame but much of the responsibility lies with individuals and the credit card companies. When we were living in Florida 2000-02 and my wife was working, she received an invitation to take a credit card with her bank with a Credit limit of $100,000. It rightly went straight into the rubbish bin. Young people if they have a job? can afford to save? should in fact take out Mutual Funds paying on a monthly basis as "$ Cost Averaging) NOW and maintain payments they can afford for as long as they can. What goes up also goes down, always has and always will so eventually it will be "UP! UP! and AWAY.

    Retired Financial Advisor, Spain

    October 18, 2008 at 11:41 am |
  29. Sam Bull

    Note re my last comment- housing crisis should read late 90's not eqarly 90;s

    October 18, 2008 at 11:43 am |
  30. Brent A. Pope

    Great comment Mr. Buffett.
    This is Wall Street " 101 " buy low and sell high. Keep investing in our American businesses. What you do today will provide a future for all.
    Make sure you know what your up against.......................

    October 18, 2008 at 1:56 pm |
  31. vineet

    IT SEEMS CORRECT IF YOU ARE YOUNG YOU CAN GO FOR BUYING, BUT ITS DEPEND ON YOUR BANK BALANCE HOW MUCH YOU CAN AFFORD TO LOOSE. MARKET IS LIKE SPONGE BALL WHEN IT COME DOWN SURLY IT WILL GO UP BUT NO ONE CAN PREDICT WHEN. BUT IN MY VIEW ITS TIME FOR INVESTMENT.

    October 18, 2008 at 2:54 pm |
  32. Victor

    I agree that the time is ripe to venture into the market. I live in Australia and the Aussie economy is, according to most economist and analysts, in better shape than other parts of the world. However, my major concern is with politicians trying to win popularity with nonsensical policies.

    I have believed in the adage that there are three types of people:
    1. Those who make things happen,
    2. Those who react to what's happening, and
    3. Those who wonder what the f***'s happening.

    Currently politicians claim to be in the first group but I believe they really belong to the third group and are making decision based on the advice of those belonging to the second group.

    Therefore I have become a long term investor who takes advantage of short term fluctuations and when the situation cools off a little I'll revert to being a long term investor.

    Thanks for the opportunity.

    October 18, 2008 at 9:33 pm |
  33. Uni student trader

    Of course its a great time to buy. True risk capital – only invest what you can afford to lose and don't over expose yourself. there are great buys around. If your a small investor who follows particular stocks and understand those stocks – then perhaps start buying in packages over the next 6months- catchc the highs and catch the lows (Dollar cost averaging). this aviods trying to time the market. If the market trends down you will buy stocks cheaper and if the market trends up you will buy stocks at a higher price. Nevertheless it is a great strategy.

    I'm a uni student in NZ, and have been trading for 5 years, btween 10 and 30k trades in ASX.

    The trend is your friend – follow Warrens advice and be a long term invetor not a silly market timer. in additon, you should be buying the Dow Jones Tracking Stock or S&P500 tracking stock.

    Good luck – im optimistc – but i guess i can be because im young.

    October 18, 2008 at 11:07 pm |
  34. sanjiv shah

    i think market is work of fear and greed as buffett is write people r irational in investing in both bull market and bear market one should invest into company wich can make profit in any economic condition.

    October 19, 2008 at 4:37 am |
  35. d. griffith

    It's not about how good or how bad the stocks look. Consumers just don't have spare money.

    October 19, 2008 at 7:51 pm |
  36. A Salim

    I have a question for McCain: How do you create jobs by cutting government spending? Unless you are looking at getting those people that lose government funded jobs hopefully getting hired by private entrepreneurs. That simply put is to make the Americans go deeper into suffering immediately McCain attains power. I don't think if the McCain supporters have really thought of the consequences of the Hatchet.

    October 19, 2008 at 7:56 pm |
  37. Uma in Liverpool, UK

    We should all be so rich, to take such risks.

    October 20, 2008 at 7:23 am |
  38. Elvis

    I have made analysis of the situation and come to surprise findings that this so called financial crisis is in actually fact a short term shock. Hope the Fed gets it right. Declare all credit default swaps null and void. Dont try and set a clearing house for this useless financial instruments. Enough said. To Warren.....thanks a lot man!! Please check Warren past buy calls.....he was right most of the time...

    October 20, 2008 at 9:34 am |
  39. Mykhaylo, Ukraine, Kiev

    In my opinion, we (or rather, you,because I am not from the USA) should believe Buffet only for 50% (or less). What, my dear Americans, have you been doing for the last couple of years? Correctly – you have been buying houses in hope to sell them in the near future for more money. You suggested that America's econonomy would grow. But something has failed.... and now you want to believe again in hope to buy something cheaper and to sell it more expencive...
    The only question – WHAT? Again houses??? Or something elese? Buffet didn't tell this. Does anybody know which shares to buy?

    October 20, 2008 at 10:42 am |
  40. ALECO -----NOKOMIS,FL

    I LOST MY JOB, I LOST MY HOME, I HAVE NOW INCOME, I HAVE NO MONEY--TELL ME MR. BUFFETT, HOW AM I GOING TO BUY STOCKS.

    IF OUR GOVERNMENT WERE A BUSINESS, THEY WOULD FILE FOR BANKRUPTCY TODAY. SOMEONE HAS TO PAY TAXES TO SUPPORT THE 11 TRILLION DEBT THAT THE REPUBLICANS HAVE PUT US IN, YET McCAIN WANTS TO LOWER TAXES FOR THE ONLY ONES WHO HAVE MONEY TO PAY TAXES. JOHN McCAIN IS A FOOL, HE IS THE VILLAGE IDIOT.

    ONLY OBAMA CAN SAVE OUR COUNTRY--OBAMA 08

    October 20, 2008 at 1:45 pm |
  41. Jaysonrex

    WARREN BUFFETT IS 100% RIGHT!

    ACT 1 – WE ARE ALL FOLLOWING HIS ADVICE AND BUY, BUY, BUY. AS A RESULT, THE MARKET GOES UP, UP, UP AND WARREN BUFFETT RECOUPS, ON PAPER, MOST OR ALL OF HIS LOSSES.

    ACT 2 – BUFFETT SELLS, SELLS, SELLS – MAKING A REAL KILLING. ONLY THIS TIME, IN REAL MONEY. AS A RESULT, THE MARKET GOES DOWN AGAIN, GENTLY BUT SURELY.

    ACT 3 – IT HAS NOT BEEN WRITTEN YET SINCE IT IS ABOUT US, THE SMALL INVESTORS. SO PLEASE BE PATIENT BECAUSE IT WILL HAVE A HAPPY ENDING: THE GOVERNMENT WILL STEP IN, ONCE MORE WITH BRIO AND SAVE US WITH OUR VERY OWN MONEY.

    AND TO THINK THAT WE ARE GETTING UPSET WHEN "THE PLAYERS" AND THE POLITICIANS TREAT US ALL LIKE THE FOOLS WE ARE.

    October 20, 2008 at 2:45 pm |
  42. DON LEMOS

    Buffet, is an investor i have admired over the years, his advice is apt at this time, how i wish i had 10 milloin dollars now, i will buy off all buyables.

    If your judgement is no. how then do you define the time value of money. this is the real value ascribed to money, every other thing is ilusory, please buy now, the U.S stock is it.

    DON-LEMOS (PORTHARCOURT NIGERIA)

    October 20, 2008 at 2:47 pm |
  43. ronald

    dear CNN,

    thanks for the extensive reporting on this calamity. Yes, we should follow Warran Buffet and possibly Lakshmi Mittal ( another guru). I started buying on Oct 12th Arcelor Mittal, UBS, Nokia, GE, Roche, Linde and Nestle, i.e. all blue-chips. Why? Because I believe in the system and only this system of financing progress and global development of the "marketplace" will make most of us prosper and prevent us from falling back into the "dark ages". Some social adjustments have to be made of course, but without the financial support of the moneymakers, not even the persuasive Bill Clinton can change the AIDS plight of the African population.

    Good luck!

    October 20, 2008 at 2:49 pm |
  44. kashab

    if the banking folks can have billions, then the next 'stimulus' for the rest of us (hinted by mr bernanke himself) should be at least triple the amount of the first! make it worth our while and have some 'real' spending money.

    October 20, 2008 at 4:56 pm |
  45. E.C.

    This is just a ploy to get Americans to spend their money to save Wall Street. He doesn't care if you clean your bank account out doing it. Just as long as Wall Street is saved. Does Buffet have some money he wants to donate to us, so we can buy stock? Telling people to buy into Wall Street is easy when you have money rolling out of your ears.

    October 20, 2008 at 5:27 pm |
  46. Anil Monga

    you're talking a lot of sense

    October 20, 2008 at 6:02 pm |
  47. Sam

    In my humble opinion the real problem is the price of the petrol.

    When the price was 20$ a barrel it was not a problem.

    Therefore the solution is to try and convince the Arab world to bring back to this level.

    It is just not logical why the price went form 20$ to 140$, or the currnet level of 67$.

    October 20, 2008 at 6:04 pm |
  48. Jeevan Raj Pandey

    Pessimism among businessmen and consumers regarding future expectations is the major factor that drives an economy into a recession. I feel that the pessimism is going to deepen even more and as far as buying up U.S. stocks is concerned, if you want to make money, you must be able to think differently than others like Warren Buffett does.

    October 20, 2008 at 6:06 pm |
  49. forexthinker.com

    The always present news about Warren Buffet, Chairman of Berkshire-Hathaway, make it easy to come to the conclusion that he is a great investor and a fund manager with a wide following among other investors.
    Currently, technical market indicators are bearish and so are the fundamentals of the US economy. It will take 3 to 4 months of consecutive rises in the index of leading economic indicators, employment figures, GDP, retail sales, consumer confidence, housing starts, and other economic data to assure investors that a rally in stock prices is real. Many investors will also wait for the next administration to unveil its fiscal and monetary policies.
    Mr. Buffet is a long term investor. He doesn’t mind if the market goes down before it rises to higher levels again.

    October 20, 2008 at 7:29 pm |
  50. Frederika Westerman Australia

    I am a retired professional, an investor, mostly in superannuation. l. People in our category have suffered great losses, affecting our whole lifestyle. There is a deep and widely held concern that the monies, invested with trust in the management of companies, have not been taken care of with a sense of responsibility, but have been neglectfully used beyond accepted risk. Additionally, It appears, that greed and incompetence have overridden decent ethics of professionalism. Do we still have to state that all of us have a responsibility in our conduct towards our fellowmen? Where do managers get the idea, that they have a God-given right to earn millions of dollars, and continue to do so, whilst their clients go under? I hope, that the present crisis will wake us all up, and that a more effective, global financial system will emerge, without the excessive greed which has rocked the stability of our society.

    October 20, 2008 at 7:46 pm |
  51. Rachel K.

    James 5:1-6 (NIV)

    Warning to Rich Oppressors

    1Now listen, you rich people, weep and wail because of the misery that is coming upon you. 2Your wealth has rotted, and moths have eaten your clothes. 3Your gold and silver are corroded. Their corrosion will testify against you and eat your flesh like fire. You have hoarded wealth in the last days. 4Look! The wages you failed to pay the workmen who mowed your fields are crying out against you. The cries of the harvesters have reached the ears of the Lord Almighty. 5You have lived on earth in luxury and self-indulgence. You have fattened yourselves in the day of slaughter.[a] 6You have condemned and murdered innocent men, who were not opposing you.

    October 20, 2008 at 9:34 pm |
  52. burnso

    Buffets advice is not relevant to the average investor.
    When Buffet invests he is able to talk personally with CEO's etc, will have a hundred people pouring over figures and he will go for a majority or 'controlling' portion of the company.
    We simply dont have access to things like this and who's to say these 'bargains' wont keep going down and collapse?.......do we forget companies like Bethlehem Steel, General Motors so easily!?

    October 20, 2008 at 9:41 pm |
  53. Sri

    Well, if you are in the position that Warren Buffett is in, I guess you can end up making profits doing just about anything you want. After all, not for nothing do we say "Nothing succeeds like success".

    He has the name, fame, the record, the clout, a clueless government willing to clutch any straw of hope and commoners like us who stare in awe at anything the champions do......and follow with a herd mentality......to depend on. I am sure he is pretty confident that all this will be enough to ensure his investments remain profitable.

    He buys, we buy.....he sells, we sell......and the cycle repeats.

    The Warren Buffetts of this world will be proved wrong only when the rules change.....1. When we can find better models for our financial systems and democratic governments 2. When governments do not bail out the rich 3. When we put an end to the system of lobbying 4. When we cease to follow others with a herd mentality. 5. When the theory of "consumption led growth" faces natural death 6. When we realise how credit cards lead to inflation and 7. When we realise that things never remain the same all the time and economic theories change too.

    October 21, 2008 at 3:42 am |
  54. George & Florence Elliott

    We urge your assistance in this crisis. Perhaps you can propose, in a direct appeal to the candidates, the following action.

    Obama and McCain to urge Warren Buffett to form and chair a temporary economic team of savvy billionaires (1) to raise $100 B in private capital for strategic investments in US companies (2) to direct and critique the Congressional and Administration efforts in the trillion $ Bail-out effort. Warren Buffett has earned the respect of many Americans and of world leaders. Though Buffett has announced support of Obama, a joint and urgent appeal by Obama and McCain, with the support of Congressional leaders of both parties, may be the only effective move to help insure confidence in the rescue efforts.

    Like fighting a wildfire, it must be done NOW to prevent dire consequences to our natiion..

    We've read that to stem the panic of 1907, President Teddy Roosevelt, in addition to Federal moves, urged John Pierpont Morgan to take similar action to that proposed above – it worked.

    George & Florence Elliott
    tel: 760-295-3272

    October 21, 2008 at 5:51 am |
  55. John Obikwu

    In the stock market I do not have the age, knowledge or experience of Warren
    ........ But I’ve always enjoyed reading old articles and long out-dated news. They are a reflection of how our collective economic decisions a few years back shaped our today and it clearly indicates that even in only about 3 years from now this all will once again be forgotten news (we would be celebrating a few figures who made very smart moves) we all would once again be madly rushing into the stock market………….just like we’ve always done in the past (it’s the herd effect).
    You can either lead your own herd by knowing and having supreme confidence in what you’re doing or be the herd and wait to follow what others think.
    why try to catch the market at the base? It may yet fall, but clearly its cheaper now…………….. It never pays to be a market timer!!!
    buy if feel you should, don’t buy if you feel you shouldn’t……. common sense is the best friend of every investor and your most beloved companion.

    October 21, 2008 at 6:46 am |
  56. ALECO -----NOKOMIS,FL

    IF McCAIN IS ELECTED YOU CAN KISS YOUR STOCKS GOODBY.

    McCAIN WILL GO TO WAR WITH IRAN AND WE WILL BE AT WAR THE REST OF OUR LIVES.

    October 21, 2008 at 3:13 pm |
  57. red

    It might be time for the professionals to buy according to Buffet, but its definately not time for the amature.

    If you have billions and can ride out the tail end of the storm, sure, buy.
    If you are the average investor, you're probably looking for at least some short term gains, at least for confidence and with the least stress as possible. We're not there yet.

    My advice is let the pros find the bottom. Let them lose your pension fund without selling off the losers to you.

    October 21, 2008 at 6:31 pm |
  58. Maurice

    Let's look at the big picture here.... in the words of a past time scared money don't make money. If you hold back you are really inching backwards. if you buy you will be inching forward maybe not be the biggest step you are taking but aleast you not inching backwards. Media has ran this in the ground thinking now is a time to pull out, if you don't put in where you going to go when you pull out... fact of life you have to put something in to ever get something out. losing a dollar now or losing a dollar tomorrow is the same as far as i'm concerned... a LOSE...Who makes the market ? WE DOI!!! if you pull out where you going to go to the Bank... we see where the bailout went, keep it at your house. or buy a lots of nothing... invest in life or invest in nothing.... the most wealth and the biggest Companies in the world alway had to give before they ever got anything. so guess what you going to have to do... GIVE or inch backwards

    October 21, 2008 at 10:41 pm |
  59. Steve P

    When the time comes where accounting rules are corrected so that companies cannot play shell games with the bottom line by overstating profits or excluding expenses, is when I will invest in the stock market again.

    October 22, 2008 at 8:24 am |
  60. Henk Schoemaker

    Warren is in a different league than the average investor. He can afford to lose millions in the stocks, but if that would happen to the rest, suffering will occur. Wall St. has risen when help came from the government, but i dont think the government is ready to help much more. The stock rise when they think it goes good, but as soon a little bit of panic comes above the surface, the stock prices crash. So thats why i think it's not worth it to invest in Wall Street.
    Last week i saw a report on CNN, that the stocks in IRAN were booming, they've risen 40% the past year. So the Middle-east would be a better gamble for THE investor.

    October 22, 2008 at 8:25 am |
  61. Clara

    The Buffetts of the world can afford to win and lose on wall street.
    But for those of us in middle-class, please NEVER invest in wall street for retirement purposes. Nine years ago, my husband and I invested $150,000. into wall street good, solid stocks with the plan to leave it there till retirement time. This cash was from selling our only one property combined with all our savings. Well, we are now 6 years away from retirement and that investment is now down to/worth $8000.
    We have had no fire or theft in our home, so the odds were more in favor of putting our retirement money under our mattress!

    October 22, 2008 at 9:04 am |
  62. Dharmesh Sanghani

    The US economy, Fed and EU central banks have made global economy a joke. If you analyse the interest rates since 1998 – this cycle has repeated every 4 years increasing / reducing interest rates, Libor, inject extra funds in the economy are all measures to only delay the bubble from being busted. The problem is actually multiplying every day. It happen is 1998 again in 2002 and now again in 2008. Over dependence on US economy will take down the entire global economy.

    October 22, 2008 at 11:18 am |
  63. tim

    I wonder how buffet makes such comments!!! Being a supporter of the democrats, does he really want the economy to recover before the elections?? I really doubt it. Wouldn't a sign of a near economy recovery hurt Obama and favor McCain in the polls?
    I think the right time to buy is on and after the 5th of November right after the U.S. Presidential elections.

    October 22, 2008 at 6:56 pm |
  64. Pedro Remedios

    U.S. stocks will always be a good buy.

    October 22, 2008 at 7:10 pm |
  65. Jason Wong

    Sometime i really don't understand the mind of a investor. There are a lot of smart people in the market but when something funny happen, they will run away!!. Do they ever use the brain to think before act? What happen to the market now actually cause by these investor. But because of these smart investor, a dump investor like me can find a good opportunity to buy a good stock. In USA history no matter whether Great Depression, World War and other Crisis, USA market can be rebound and become stronger and stronger. So i don't see any reason why we all can't have a confidence on the US. About Mr Buffet comments, i think some people misunderstanding about it. For example, when got a BIG SALE!!!!, beside a cheap price, we also have to look at the quality of the product. Don't just buy because is cheap. If you do that then that is your choice but don't regret later and blame the company. Because you have the responsibilty to evaluate the product and not because someone brillant said so.

    Jason Wong
    Malaysia

    October 23, 2008 at 8:23 am |
  66. ALECO -----NOKOMIS,FL

    THIS IS NOT THE TIME TO BUY--JUST WAIT-THE MARKET WILL DROP ANOTHER 1000 TO 2000 POINTS.
    IF McCAIN IS ELECTED, YOU CAN KISS ALL YOUR SAVINGS GOODBY.

    October 23, 2008 at 12:56 pm |
  67. Nodine Batache

    By doing a little analysis and filtering information, I arrived to the conclusion that European Countries will Peg ther Euro to the US Dollar. They already mentioned it by asking for a "Bretton Woods" Agreement.

    I suspect that european countries are buying US dollars at the moment and this explain the increase in US dollar value.

    There is an obvious relation between Dow Jones and decrease in Dollar Index countries members.

    I think that they will agree on a 1 US to 1 Euro exchange rate. This will induce a drop of Dow Jones to around 6000. I do dot think it will reach there, but definitly aiming for it,

    The price of oil is dropping for the US, but increasing for europeans.

    I think that the barrel of oil will reach and stabilize around 55 US if speculators do not get involved too much.

    I would really like to know what do you think about my analysis.

    October 23, 2008 at 1:53 pm |
  68. joy

    i respect warren buffet's view that US stocks are ripe for buy now, but caution investing is still needed.... cash is king anytime, defend your portfolio

    joy
    lagos, nigeria

    October 23, 2008 at 1:58 pm |
  69. R. Mayer

    We can see almost any president (excl. Mr. Bush) travelling trhroughout the world meeting each other, spending time and money and giving their opinions.
    Why isn`t there anybody consulting with UN (FMI?) and have o n e meeting inclluding everybody, if you like, and real finance experts giving ideas on the crisis and how it could be solved unanimously. Even, there could be agreement about delegations to the different countries. United Nations have the appropriate organization to deal with global problems and are to consider economical as well as humanitarian and environmental questions .All that in order to prevent us from having new wars and starving over the world.
    Thank you for your attention.

    October 23, 2008 at 2:44 pm |
  70. Melissa Hahn

    If I was a wealthy person, I would invest a lot of money in the stock market. Such people have enough money that they can afford to lose it if their gamble doesn't pay off. Clearly, not all stocks are going to succeed, but I think over the long run, people who invest now are going to make a huge profit. Unfortunately, I don't have hundreds of thousands of dollars stuffed in my mattress that I can invest. I will just focus on staying afloat.

    October 23, 2008 at 6:20 pm |
  71. Luis Fierro

    Common sense indicates: "buy low, sell high".
    Right now, it is time to buy, as valuations are much lower.
    Or, as John Templeton used to say, ”To buy when others are despondently selling and to sell when others are greedily buying requires the greatest fortitude and pays the greatest reward”.

    October 23, 2008 at 6:21 pm |
  72. Stefan Mahr

    absolutely clear, that Warren Buffet will advice to buy stocks. because he just invested a few weeks ago – and when more people will invest in stocks now, stocks will go up again – and he will make profit.. very easy...
    the issue is, that the money is gone which you need to invest...

    October 23, 2008 at 6:29 pm |
  73. London717

    the question is loaded. Yes it is time to invest in the correct stocks and no it is not time to invest in the wrong stocks.
    This is so complex that it takes greater minds than mine to sort out where we are. Oil prices diving – dollar price inforced seems to make global sense ... US corporate prices diving – dollar price rising makes no sense..
    I have only one question – I have some GM euro junk bonds expiring in 2033... will they default or is it a good but risky buy (price about 28 to the 1000) no default yet ......

    Should all three US greats (past tense) merge?

    sorry that was two questions.

    October 23, 2008 at 6:30 pm |
  74. Ivan B.

    W.Buffetts of this world can do what they like with their money but recent disastrous performances proves to me that this game is not for us, the ordinary people. The notion that share markets are good investments for "mums and dads" has been shot to pieces. I, for my part will stay away forever.

    October 23, 2008 at 6:32 pm |
  75. Prem Kumar

    I shocked that Greenspan is shocked that we are in a mess and does not know why.Its like asking why do we have police, laws, rules,regulations why will not all citizens behave as Gods gift to earth. This is all due to lack of regulation leading to the greed of executives who have killed the "purpose" of companies and lined their own pockets at the cost of the average man. Its a shame and no body is punished.One should invest in the stock market in US only when there is transparancey and accountablity.;

    October 23, 2008 at 6:33 pm |
  76. Per Holmlund

    Not a good buy but god bye!

    Make it simple. Draw a trend line in a monthly S&P 500 graph from 1982 or 1987. The financial mega trend is broken and we'll have to work through at least one more business cycle before we can see new All Time Highs.

    Worst cases 400, best case a Cow Market were brokers are skimming the investors between 800 and 1300. Last US show: Dow to 9000, 1990 in Ira Epsteins Stocks, Options and Futures, Chicago.

    October 23, 2008 at 7:06 pm |
  77. Paulo

    Some companies traded at the U.S. stock market, that are leaders in their respective areas, like FORD for one, are nowadays traded at the lowest price in many years andbe a it may be a good time to do a long term investment in this companies, you just have to belive that the companie witch stocks you're buying are not going to declare bankruptcy, if it doesn't happen you're going to have a major return after this crisis, if you do not need you're stock money before that of course.
    But be carefull, because the minimum period for this crisis to last get's bigger every day, since the financial institutes refuses to lend bailout packet money putting that money bacak in Strong Goverments Treasures to cover their asses until the storms goes down. They seem to ignore that this action makes credit more expensive, that causes job loses and the solution to the crisis goes more far away in the horizon...
    I think what i mean by that is, stay out of stores stocks, unless you're aiming short term with the year's ending. Go crazy on the biggest companies you're have opportunity to buy and thing GOOGLE just a couple months before they come up with a fone service, Oh! by that stay out of the fone companies too... they are about to fall hard, maybe some survive AG but it will be a long time to regain value...
    And in reggard of people with morgage and loans to pay i advice to be patient, if you have the money don't pay than right away, as soon as a bunch of people doesn't be able to pay their loans banks will have to renegociate to get at least a little bit, and when that time comes you migth want to renegociate yours too...

    A bit too long... but im too lazy to post more than 1 comment so... i have much to say.
    see you all in 18 to 20 months, when the storm is gone we all will being colecting the pieces, more or less depending where are you...

    Paulo Aguiar
    Brazil

    October 23, 2008 at 10:27 pm |
  78. Stan From Calgary

    I'll say it again. Use new tax laws to stop the short sales and the volatility. 50 to 60 percent for any stocks held for less than one year.

    October 24, 2008 at 5:56 am |
  79. Gary Balfour

    For those that have excess cash that they can afford to have it tied up for the long term, this is an excellent time to invest and those that do should see good returns several years from now. For short term investors, the risk of continued decline over the short time makes stock purchase too much of a short term risk.

    October 24, 2008 at 7:53 am |
  80. Mario

    Rule #1- Never lose your money.
    Rule #2- Remember Rule #1.

    Invest, invest, invest,

    Now is the best time for people to create long term investments since companies are at their lowest, and they are going to 'eventually' go back to their normal prices.

    October 24, 2008 at 12:02 pm |
  81. Jaime Remedios

    YES, as long as we lock up the beasts and make them pay for what they have done. Has anyone that caused this mess to happen, been arrested? I don´t think so. They are still there preying and getting richer at our expense.

    October 24, 2008 at 12:15 pm |
  82. Bayo Ajayi

    I agree with Mr Warren Buffett, now is the best time to invest in good stocks with great fundamentals but are just hit by the market sentiments. If you have some money, you can make good profit. To take it one step further, it is also a good time to pick up good real estates in good areas for rock bottom prices. To predict when it bottoms out is near impossible but one can do a guess work on that. The market confidence just have to return one way or the other. Government interference does not really help

    October 24, 2008 at 2:16 pm |
  83. ALECO -----NOKOMIS,FL

    WAIT UNTIL THE STOCK MARKET HITS 5000, THEN BUY. IF McCAIN IS ELECTED, FIND THE NEAREST BRIDGE TO JUMP OFF.

    October 24, 2008 at 4:26 pm |
  84. Debesh

    It is more like driving a slippery road and when the brake suddenly fails you do not know where to go. But when one knows that the roads are closed one seldom feels like driving forget about investing on the stocks which are already bailed out............ god save the world economy, we in the third world would be hard hit........... the Indain stock is already in its three years low........ the joyride in the wonderland is sure to get quirky now.

    October 24, 2008 at 5:08 pm |
  85. Hans

    Hi,
    Buffet should jump in and send 55,5 Bilj. to the state. At the moment there are over 1.000 people worldwide owing more than 1 Bilj. USD.
    What to do with those amounts of money piling up in their warehouses. If we let every one of the Forbes Billionaires list keep 50 – 100 Milj. USD (enough to have a nice living I think) and send the rest back to the states, the credit problem would be solved in one day.
    And I am not a communist!
    Regards,
    Hans

    October 24, 2008 at 5:48 pm |
  86. Jaakko

    Since most of us don't have the resources nor reputation of Mr. Buffet, I would be a little bit cautious of investing in US stocks right now. Indicators like PE-ratio imply that stocks are cheap, but the problem is that they are based on the most recent earning reports or estimates, which haven't yet fully captured the impact of the current economic downturn.

    Stock price is a leading indicator, which means that falling stock price implies falling future earnings. So stocks may or may not be cheap right now.

    Latest worry with US companies is the strengthening US dollar. Certainly the last thing they need right now is the loss of competitiveness in home and export markets.

    October 24, 2008 at 7:12 pm |
  87. Steve

    Buffett is right, US stocks are a good buy now and getting to be a better buy every day as the market tanks.
    This dive is unprecedented though and scary even for seasoned investors. Who knows what the future holds?

    October 25, 2008 at 2:34 am |
  88. Taxpayer

    There is no cure for this crisis : the cause of the problem is in the financial system : basically banks are allowed to make money. With every 100$ we save in a account, they loan out up to 8,000 dollars.

    The financial system needs to be rewritten, so that banks that get 100$ in savings, can only lend out 100$ in credits.

    That means alot less credits will be given out to companies. That means alot of companies will make alot less credit.

    But we all know that this is not the fix that will be applied. The system will be bailed-out by taking our taxpayers money and give it to the bank(er)s.

    The fundamental reason for this crisis will not be resolved.

    The one and only factor that counts for the American stock market are the U.S. Presidential elections.

    When the Republicans win, they will do what they did 8 years ago : go to war under some bogus pretext. And the stock markets will plunge further.

    When the Democrars win they will stop spending 2 billion a day in Iraq. And the stock markets will raise.

    Unless Mr Buffet (whom I admire greatly) knows the outcome of the election, his advice is worth just as much as the roll of the dice.

    October 25, 2008 at 10:32 am |
  89. Deep

    The US economy is going under recession. I think the new financial regulations, that will be placed by Obama/Mcain will improve the situation by H1' 2009 only. Until then its best to stay away from the US market.

    Its quite obvious that the $700 B dollar bailout plan had no-effect in the US and the worldwide economy.

    October 25, 2008 at 2:10 pm |
  90. Brian Proskin

    I'm not sure that any bottom has been reached, nor do I agree that a stock that sold for double what it sells for now, is a good buy. 2 reasons. 1. Future earning might be a lot lower over the next 10 years than we've become used to and 2.The formula we've used to calculate share value might have changed. I say this as it seems .30 cents per share earnings on a stock used to translate to 4 to 6 bucks a share while now its getting closer to 1.50 a share. Even if that value doubles it's still a lot lower than we're used to. If in cash Stay there till things become clear.

    October 26, 2008 at 5:10 pm |
  91. Maria Jolicoeur

    I feel it is a good move for your future to invest is you have five or ten thousand dollars in stocks in a company that looks like it will have growth in the next ten years. In ten years you could triple your investment. Whatever happened to O[[enhiemer? Investing in gold bullion is a good idea but I feel golds value grows slwer than stocks. The U.S. Treasurery has there gold at Fort Knox. I wonder how much the government has invested in gold as their backup?

    October 27, 2008 at 12:00 am |
  92. luiz Silverio

    Very well stated.
    Regards

    October 29, 2008 at 8:17 pm |
  93. andrewt107-04

    Yesss. now is a great time to invest in many us stocks. many of these companies have hit all time lows, some so low, that theres not much lower for them to go. many of the companies stocks that have dropped so low are companies that have been around so long, american icon companies. these companies are going away for away. many companies that suffered and survived through the 1929 and other stock market crashes are not going through this current stock market "crash". these stocks will eventually with time go up, and most likely go up a decent amount. now when there stocks are at lows that investors thought would never be seen have happened. investing now will give you the opportunity to buy these stocks at there low and take the ride with them to their highs in the comming years.

    November 2, 2008 at 1:01 am |
  94. Erik Wassenich

    The World Economies in Freefall
    The financial and business crisis is the result of a faulty economic theory: “Businesses and economies have to continually grow”. Demand and supply are population and income based, if the population grows, demand grows, if it falls, demand declines, if the population remains stable, demand remains stable. In most countries, the income is not rising much over the rate of inflation. The populations of the world cannot be asked to consume more than they can digest. Most industries making consumer and industrial products are mature, each product has a specific life expectancy – we are living in a maintenance and replacement economy. For example, there is a global car manufacturing overcapacity as there are overcapacities for many other products.

    November 11, 2008 at 3:21 pm |

Post a comment


 

CNN welcomes a lively and courteous discussion as long as you follow the Rules of Conduct set forth in our Terms of Service. Comments are not pre-screened before they post. You agree that anything you post may be used, along with your name and profile picture, in accordance with our Privacy Policy and the license you have granted pursuant to our Terms of Service.

About Business 360

CNN International's business anchors and correspondents get to grips with the issues affecting world business, and they want your questions and feedback.

 
 
Powered by WordPress.com VIP