"The United States is already in a recession and it will be longer as well as deeper than many people expect" - story
Ok. Now I'm really feeling defensive. When Warren speaks I listen and heed.
Ya should be interesting. He isnt wrong too often.
thats true its what makes him so capable an investor - picking up the bargains - looking at Sequoia Fund also - closely associated with Buffet and has 25% invested in Berkshire. Also looking at FAIRXNotice that in this same interview (Der Spiegel), he also says that he is looking for good companies to buy. He said "If the world were falling apart, I would still be buying good companies."
I personally am fairly heavily invested, but not in any market tracking vehicles. Where you really get hurt is in a valuation collapse of companies that never should have been valued that highly anyway.
Over time, free cash flow wins, if an LBO or such doesn't steal it out from under you.
Ha
I've been moving out of individual stocks into mostly more conservative mutual funds. I'm in distribution phase now so I'm willing to settle into a return that pretty much guarantees a certain level of income while preserving principal
Current holdings:
VWINX DODGX DODIX HABDX PRPFX DRTAX SMTFX SXTIX PRTAX MWTRX as well as MMF at brokers.
I feel like I should be selling more stocks and maybe putting proceeds into VPDFX after hearing from the oracle of Omaha.
I haven't changed my asset allocation in a long time. I just have been riding the ups and downs with a well balanced portfolio. Doing ok so far.
"The United States is already in a recession and it will be longer as well as deeper than many people expect" - story
Ok. Now I'm really feeling defensive. When Warren speaks I listen and heed.
I've been moving out of individual stocks into mostly more conservative mutual funds. I'm in distribution phase now so I'm willing to settle into a return that pretty much guarantees a certain level of income while preserving principal
Current holdings:
VWINX DODGX DODIX HABDX PRPFX DRTAX SMTFX SXTIX PRTAX MWTRX as well as MMF at brokers.
I feel like I should be selling more stocks and maybe putting proceeds into VPDFX after hearing from the oracle of Omaha.
thats true its what makes him so capable an investor - picking up the bargains - looking at Sequoia Fund also - closely associated with Buffet and has 25% invested in Berkshire. Also looking at FAIRX
What's an MER...Are you saying:
- You can pick stocks better than a mutual fund manager in good times but not in bad?
- Stock MF's preserve capital in a down market?
- No-one can pick stocks in a bad market but if you have MF's, it's not your fault?
- Something else?
I'd understand moving to cash or bonds but I'm not sure how MF's fit in. If MER's are an enemy when they decrease positive returns, how can they be your friend when they increase negative ones?
Careful. You're assuming that a bad recession means stocks are a poor investment, but the valuations of many stocks have a recession priced in, IMO.
Barron's this week has an interesting article about P/E titled "What's the real P/E Ratio" written by Chairman and President of Comstock. According to them, the current P/E is not what it appears to be.
Please follow the link below.
Barron's Online
Makes me want to go to all cash.
mP
"The United States is already in a recession and it will be longer as well as deeper than many people expect" .
Agreed. When I think of going into a deep recession, I vision dropping another 20% or more from where we are now. But I think Warren is thinking we're already there are perhaps future drops will be minor relative to our current position.Other than a great headline just what does this statement mean? Longer than what? deeper than what?
Barron's this week has an interesting article about P/E titled "What's the real P/E Ratio" written by Chairman and President of Comstock. According to them, the current P/E is not what it appears to be.
Please follow the link below.
Barron's Online
Makes me want to go to all cash.
mP
I recall reading many, many years ago about someone from Comstock being very bearish. The article then was in Forbes and had a nice darkish, sombre picture of the guy in a very thoughtful, intelligent looking pose. They were very wrong then.Barron's this week has an interesting article about P/E titled "What's the real P/E Ratio" written by Chairman and President of Comstock. According to them, the current P/E is not what it appears to be.
...Makes me want to go to all cash.
Remember, cash is losing you money right now. Money markets are earning about 3%, and you pay taxes on that, so it is more like 2%.
Inflation is running at at least 4% (you can decide for yourself if the government has a secret plot to understate it ).
Treasury bonds don't pay enough to get a real return.
Commodity prices are through the roof and feel like they are in a bubble. I may be wrong about this, but I'm not going to get caught chasing prices up.
That pretty much leaves stocks, real estate, and junk bonds as investment options.
Stocks and real estate have the advantage of being able to increase prices and rents to cope with inflation. They seem like the only safe choices in today's environment.
What's an MER...