Commentary
Wisedom on America's future, the Intelligent Investor, and Madoff the crook.Excerpts
I read a book what is it, almost 60 years ago roughly, called The Intelligent Investor and I really learned all I needed to know about investing from that book, in particular chapters 8 and 20 so I haven't changed anything since....this whole Bernie Madoff scandal. It has undermined people's sense of well being about our system. So what do you say to people who have lost trust?
WB: Well they may be better off not being in equities. If they're really depending on somebody else and they don't know anything about the somebody else, they've got a problem. They shouldn't do that. I mean there are going to be crooks out there and this guy was a crook on a scale that we've never seen before. But you ought to know who you're dealing with. But if you're going to buy a stock in some business that's been around for a 100 years and will be around for 100 more years and it's not a leveraged company and it sells some important product and it's got a strong competitive position and you buy it at a reasonable multiple of earnings, you don't have to worry about crooks, you're going to do fine.
WB: I am unquestionably optimistic about the long term. I'm more than a little pessimistic about the short term, but that doesn't mean I am pessimistic about the stock market. We bought stocks today. If you tell me the economy is going to be terrible for 12 months, pick a number, and then if I find something that is attractive today, I am going to buy it today. I am not going to wait and hope that it sells cheaper 6 months from now. Because who knows when stocks will hit a low or a high? Nobody knows that. All you know is whether you're getting enough for your money or not.
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