Warren Buffett: Buy Stocks! Cash Is Trash!

[ItsTime]

http://finance.yahoo.com/tech-ticker/article/97383/Warren-Buffett:-Buy-Stocks!-Cash-Is-Trash!

 

[muh_roads]

Coming from a guy who admits even he doesn't understand credit derivatives.

 

[Bruno]

I heard he is now 100% in the stock market now for the first time.

 

[Malakai]

Owning halfway decent american stocks and picking em up at the bottom is indeed better than holding billions in USD IMO.

I'd rather own billions of foreign dividend paying stocks and gold/silver bought at the bottom to the american stocks tho

 

[wizardwatson]

The market may have bottomed. Maybe the stock market will start to inflate like crazy now with all this new money as people flee cash. I just don't know anymore.

Is it inflation or deflation.

Ron Paul says the risk is inflation, because they aren't allowing the deflation. So maybe the deflationary force is meeting the inflationary force-in the stock market anyway.

Argentina, here we come.

Most disturbing to me in all this, is that the Bush administration in its 11th hour, is greasing the skids of socialism and we're about to have a socialist president, and a socialist congress. Already the Dems have majority in both houses, and its likely to widen with party-line voters who aren't paying attention to anything except the Presidential election. It's going to be a Collectivist free-for-all over the next four years.

Ben Stein said it best on Glenn Beck on Wednesday. He said we've had Democrats controlling Congress and the White House before, but they've never been in charge of our financial system. Well, now they're not only in charge of it, but they'll get free reign as the American people under the weight of a probable depression will cry out for a saviour.

Too many things are clicking into place. Which, as I've said before, is why I think this was all orchestrated.

 

[Malakai]

Coming from a guy who admits even he doesn't understand credit derivatives.

Problem? I took it as saying "Listen I've spent my life investing all over the place and I don't understand them, you think the politicians running to fix the this mess do?"

 

[danberkeley]

Buffett wants you to drive up the price of GE and GS so he can cash out. Simple enough.

 

[torchbearer]

Aren't those stocks valued in the trash dollars?

 

[torchbearer]

Buffett wants you to drive up the price of GE and GS so he can cash out. Simple enough.

+1.

 

[danberkeley]

Aren't those stocks valued in the trash dollars?

Shhh! You're ruining Buffett's parade.

 

[Knighted]

For all we know, Buffett could be encouraging people to buy so that he can sell his massive amounts of shares to them at higher prices. And even if that's not true, there is certainly a good chance that Buffett is wrong in his predictions this time. I would take anything that man says with a grain of salt.

 

[Feenix566]

Applying the Buffett doctrine
By MarketWatch

Last update: 2:33 p.m. EDT Oct. 17, 2008

NEW YORK (MarketWatch) -- If Warren Buffett is buying stocks, should you?
The answer, unequivocally, is yes. That is, if you can get Warren's terms. And even if you can get those sweet deals, be careful.

Those are the warnings investors should heed after Buffett's now infamous commentary published in the New York Times on Friday, "Buy American. I Am." Judging by the market's response -- the Dow Jones Industrial Average was up nearly 3% in afternoon trading -- investors are following America's most famous investor. See Buffett commentary.
But those same investors should be careful. It's not that Buffett isn't smart, he is. But at this stage of the game, Warren Buffett doesn't buy stocks on the open market by calling his broker, he buys them in bulk.

For instance, he didn't just go out and buy battered shares of General Electric Co. on the open market Oct. 1. He also received $3 billion in special, preferred stock. Those shares will pay a 10% dividend for at least three years and if, after that, GE wants to buy it back they will have to pay him 10%. Buffett also got warrants to buy GE stock that at the time was worth a 13% discount to existing shares.

The same principle applied with his investment in Goldman Sachs Group Inc. just a week earlier. Buffett again bought $5 billion in preferred stock. He'll get the same 10% dividend and $5 billion in warrants at $115.

The problem for Buffett is that his warrants were becoming worthless as GE and Goldman stock fell. One cheap, easy way for Buffett to reverse his losses is by penning an editorial using his huge sway, folksy style, and hints of patriotism to stir up some buying.
Investors should, in the end, be mindful of Buffett's advice, "Be fearful when others are greedy, and be greedy when others are fearful."

And when the "others" are investors driving very greedy sweetheart deals?

Wait until you can get your own.

-- David Weidner

http://www.marketwatch.com/news/sto...x?guid={21A63C14-15FC-4C05-8D5C-ED202E2B44C3}

 

[ARealConservative]

Coming from a guy who admits even he doesn't understand credit derivatives.

are you serious?

You are taking what he said way out of context

 

[lodge939]

Coming from a guy who admits even he doesn't understand credit derivatives.

No, coming from a billionaire. How much money have you made?

 

[intelliot]

Historically, has Buffett been right in his predictions?

 

[jonahtrainer]

Aren't those stocks valued in the trash dollars?

Yeah. This article critiques Buffett's advice about Trashy Cash and why buying equities now is not quite the time but will come.

 

[PatriotG]

Historically, has Buffett been right in his predictions?

He's done very well, he also an insider.

 

[ThePieSwindler]

Historically, has Buffett been right in his predictions?

I think you're asking the wrong question. Buffett is not making a prediction in the sense that most people are used to hearing "gurus" predict. Hes simply espousing the point that profitable, healthy American businesses are a good investment, and that the least risk and most return associated with said investment is when prices are beaten down and pessimism/fear abounds. He thinks long term, and in the long term, say, 20+ years, high quality companies will produce outstanding returns, especially if bought at firesale prices. Buffett's real talent is a powerful, intuitive knowledge of business and business value, so he can find those good companies with much more certainty than you or I, thus he is able to take massive, billion dollar positions without even flinching. Thats why he is a multibillionaire... that and his constant cash-flow and resources from insurance float and his other 50+ businesses.

Investing isn't about making predictions, its about consistency, depth of knowledge, patience, and discipline.

 

[acptulsa]

For all we know, Buffett could be encouraging people to buy so that he can sell his massive amounts of shares to them at higher prices. And even if that's not true, there is certainly a good chance that Buffett is wrong in his predictions this time. I would take anything that man says with a grain of salt.

He doesn't seem to be practicing what he's preaching too hard, as the Dow has lost all its gains for the day and then some.

 

[surf]

he's a douchebag, just like Bill Gross. watch iousa.