The Oracle of Omaha Exhorts Investors to Buy

Buffett’s Advice Always Fit to Print
The Oracle of Omaha Exhorts Investors to Buy

by Kenneth S. Janke
7.1.2009



Most of the time, I preferred to read the college newspaper, keeping track of our football and cross country teams as they both went on to win national championships that fall. The one big disappointment I had with the Times was that there were no comic strips. How in the world could a newspaper not have comic strips and devote the sports section to the Yankees and Giants, seldom mentioning games in the Midwest?

A few years ago, I succumbed again and subscribed to the Sunday edition. But I soon realized that I read only the financial section and was turned off by the rest of the reporting. There still weren’t any comic strips, but I unsuccessfully attempted to complete the crossword puzzle and developed a dislike for the puzzle editor. I had stopped reading any part of the Times until Warren Buffett’s opinion piece published on Oct. 16. (As of early December the article, “Buy American. I Am,” was still available for free at the newspaper’s website. Use the site’s search function for quick access to it.)

Since I’ve always enjoyed reading Buffett’s remarks in the Berkshire Hathaway annual reports and listening to him talk about his approach to investing, I read the article carefully. Now, keep in mind that this was written a full month before the heavy gyrations (mostly down) in the stock market through the first three weeks of November. During that span it wasn’t unusual to see daily moves in the Dow Jones industrial average of 300 points and more. Although you wouldn’t call him bullish, he explained his analytical outlook and said he was buying American stocks in his personal account.

The reason he was buying was covered in a couple of paragraphs:

“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.”

We already know he’s an investing genius, but Mr. Buffett also has an extraordinary talent to succinctly state in a few words his approach to investing. It’s commonsense advice we should follow. Oh, by the way, The New York Times still doesn’t have any comic strips.



Kenneth S. Janke, Sr., is a chairman emeritus of the NAIC/BetterInvesting board of directors and a member of the magazine’s Editorial Advisory and Securities Review Committee.

http://www.betterinvesting.org/NR/exeres/AD099AF4-F179-403D-9B30-8DBB0FD9DB29.htm