Friday, October 17, 2008

Buffett Getting Long

Warren Buffett takes the rare step of writing an op-ed piece for the New York Times in which he doesn't exactly call the bottom in U.S. stocks but says in no uncertain terms that he is buying them here.

"Over the long term, the stock market news will be good. In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497. "
It's funny that he chooses to do this now, in the same week that the ever-inflammatory Jim Cramer has been declaring buy-and-hold investing dead. So vociferously in fact that CNBC has been running it as an ad - a lot.
Who is going to be correct? Cramer's position certainly fits into where he has positioned his TV show. He wants average Joes to own individual equities, be properly diversified and yet do one hour per week of research on each stock they own. That is impossible for 99.9% of people out there. If you're trying it at home, you better watch his show.
Buffett is a high-profile guy who is beholden to nothing and no one and seems to work like he wants to. Most investors would continue to be well-served by taking his lead.

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