Buffett Says Buy Stocks

 | October 17, 2008 8:19 AM

Warren Buffet, in a New York Times op-ed, encouraged readers to buy American stocks because everyone else is selling them.  It reminds me of when Ji Seon told me her aunts were buying internet stocks and I said “We should sell.”  Or the time when I heard someone bought a condo after saying no so many times before and I said “The housing market is about to decline.”  And for the past few weeks I have been saying it is time to buy stocks.

However though I was right in the past I did nothing about it so there wasn’t really any value in my being right.  And though I might be right and I am sure Buffett is right, I am not buying any stocks now.  Why don’t I do anything?  Because I have this other philosophy which says “You cannot time the market.”  So I am frozen with indecision as I have been many times in the past about even the simplest things like which pair of eyeglass frames should I buy?

A good friend has been encouraging me to read a book about Buffett and learn about his investing style.  I will be doing that soon (I have it on reserve at the library) and hoping the market at least stays flat before I get in.  One other philosophy I have is “Don’t rush into things.  Opportunities always keep arising.”  Maybe I am wrong about that philosophy too. 🙂

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.

Buy American. I Am. – Warren Buffett

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