Buffett Is Buying

In case you have not seen it already, Buffett has declared to the New York Times and the world that he is buying US stocks and you may want to consider doing the same...

Op-Ed Contributor: Buy American. I Am.

THE financial world is a mess, both in the United States and abroad. Its problems, moreover, have been leaking into the general economy, and the leaks are now turning into a gusher. In the near term, unemployment will rise, business activity will falter and headlines will continue to be scary.

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.

Why?

A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors. To be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions. But fears regarding the long-term prosperity of the nation’s many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now.

Let me be clear on one point: I can’t predict the short-term movements of the stock market. I haven’t the faintest idea as to whether stocks will be higher or lower a month — or a year — from now. What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up. So if you wait for the robins, spring will be over...

So if you were to buy stocks (on the advice of the world's richest man and most famous investor) what stocks should you buy? Buffett as we know has been buying up Goldman Sachs (GS) and GE and getting a pretty sweet deal through his flagship Berkshire Hathaway.

But not all would agree with his call or with his timing or choice of financials...

Cramer: Sure, Buffett Can Afford to Buy Here

I am not about to lock horns with the Oracle of Omaha on this point, but I would advise caution in US equities and even MORE so here in Vietnam as there is a lot more pain and trouble ahead.

You can however glean a few counter arguments from NYT columnist and recent Nobel Laureate in some recent posts from Paul Krugman's blog.

An alternative solution

Look out below

Beige fades to black

Return of The Return

Train headed downhill