I don't disagree with anything the Oracle said in his piece. However, here is a statement from the article that sort of sums up my ambivalence with a larger commitment to equities (in preference to "cash equivalents" and - for the sake of argument - gold).
"I believe that over any extended period of time this category of investing will prove to be the runaway winner among the three we've examined."
Absolutely true, but the definition of "extended period" is a little vague to those of us in our mid 60s. I made a ton of money on equities - enough to insure my current "lavish" life-style. BUT, it was over one 10-year period when all my equity investing (of the 70s and 80s) finally paid off in the 90s. Since that time (yeah, I bailed out for the most part) equities have more-or-less gone sideways. Yes, dividends have helped (and I have participated). But, to be "certain" you will come out ahead on equities, you do need that "extended period" as a time frame. I'd like to think I have another 30 years of life, but realistically, it's more likely in the 15 to 20 year range (or less
).
Could a long bull market start tomorrow. Yes. Could the "sideways" market continue for the nest 15 or 20 years. Yes.
Again, not arguing with WB. I'm simply suggesting that those of us with relatively shorter time-frames might be forgiven for trimming our equity positions somewhat - and in favor of such unproductive investments as gold or "cash" or bonds. Not suggesting NO equities, just suggesting (for me) far less equities than most of the rules-of-thumb would suggest.
Now, if one of us old codgers doesn't have enough "cash" or gold or bonds to weather an extended period of modest inflation and "sideways" returns, equities are probably the only alternative. If that is one's choice, one needs to consider the effects of beta. Personally, I saved MORE than I needed (based on the more typical 75/25 balance). Now, if I pay the price by losing some purchasing power, it will be sad but not tragic.
Hyper inflation would destroy those of us with lots of cash, but it's not clear that equities would fare better. Equities typically do well with modest inflation, but not with high inflation (think "stagflation" of the late 70s, early 80s). Probably, gold would be worth less, but never zero. And ITSHTF, gold may (or may not) be a crisis investment worth having. Piles of paper, bonds, stocks or cash probably will NOT have much value then.
So while acknowledging the "truth" that WB has laid out, I personally don't believe it's the whole story - at least not for all of us. Just sayin'... and YMMV.