Monday, October 20, 2008
Warren Buffett says "Buy American. I Am."
Warren Buffett is now buying American stocks and in his New York Times editorial, he is urging people to follow his lead.
Would this apply to other bourses as well since the other markets look up to the US market for direction? Advising against holding cash, he said cash is a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value.
Buffett says he's been buying stocks in his own personal account, in which he previously owned nothing but United States government bonds. If prices stay attractive, all of his personal holdings will be 100% U.S. equities.
Why is Buffett taking this strategy?
"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."
Buffett emphasizes that he has no idea what the market will do in the short term but equities will almost certainly outperform cash over the next decade, probably by a substantial degree.
There you have it, insight from currently the richest American.