Buffett: Forget your fears and buy American stocks
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It’s time to buy U.S. stocks, Warren Buffett says.
The world’s richest man doesn’t mince words in an op-ed piece in the New York Times today.
He wrote that he is shifting his personal account, in which he says he previously owned only U.S. government bonds, into American stocks. This money (a sum he doesn’t disclose) is apart from his investment in his company, Berkshire Hathaway Inc.
‘If prices keep looking attractive, my non-Berkshire net worth will soon be 100% in United States equities,’ Buffett wrote.
Here’s how he lays out the case for stocks:
‘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. ‘Today people who hold cash equivalents feel comfortable. They shouldn’t. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value. ‘Equities will almost certainly outperform cash over the next decade, probably by a substantial degree. Those investors who cling now to cash are betting they can efficiently time their move away from it later. In waiting for the comfort of good news, they are ignoring Wayne Gretzky’s advice: ‘I skate to where the puck is going to be, not to where it has been.’ ‘
It’s all classic, upbeat Buffett. And, naturally, he’s not providing any individual stock tips. He’s giving you the big picture, but you’ll have to find your own stock ideas.