"...and be greedy when others are fearful." -Warren Buffett.
The Oracle of Omaha continues, "... 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."
A good lesson from Buffett to be sure, and one he learned from Benjamin Graham at Columbia Business School. Grahamian logic tells one to view stocks as nothing more than a business. The vicissitudes of the market--its ups and downs--are to be taken advantage of soberly.
But could the Great Oracle be a bit shortsighted in this case? Probably not. Buffett has the resources to take advantage of the situation at hand. $200 billion does that. Buffett is obviously swooping in and buying companies that he and Munger deem valuable.
But if everyday investors follow Buffett's path, they'll get crushed like a 1st-grader in a varsity football game.
The morons in the news will of course grasp onto this to push their android-like pabulum about the metaphysical impossibility of extended market losses. "The market must turn around, Warren Buffet said so!"
Buffett is an astonishing investor, and a marvelous teacher. His philosophy on investing is timeless. However, he has a penchant for advocating rather prodigious government policies—like his crazy advocacy of steep progressive taxes—and isn’t the world expert on business cycles.
Jesus Huerta de Soto is the World’s leading expert on business cycles. Listen to his comments on the current situation here.
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