In his New York Times op-ed, Warren Buffett declares that it's a great time to purchase stock in American companies. This is an exceptional statement for several reasons.
First, Buffet will likely be a very serious voice in an Obama presidency on economic matters, although I'd be surprised if he had a formal job. At his age and with his schedule, I can't imagine he'd be interested unless told that he was indispensable in the job. Still, as someone who issued warnings several years ago, he has a great deal of credibility.
Next, it's also significant because Buffett's never been a big stock guy:
I’ve been buying American stocks. This is my personal account I’m talking about, in which I previously owned nothing but United States government bonds. (This description leaves aside my Berkshire Hathaway holdings, which are all committed to philanthropy.) If prices keep looking attractive, my non-Berkshire net worth will soon be 100 percent in United States equities.Most interesting is his reasoning. It's not out of "patriotism." No. It's sheer greed:
A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful...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.In short, he expects to earn a LOT of money on others' fear and inability to bear risk. He concludes by noting that those who wait for signs of recovery will be too late:
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.”