We will continue to ignore political and economic forecasts, which are an expensive distraction for many investors and businessmen.Buffett in the old days was notorious for pooh, poohing macro-economic forecasts.
Times have changed. Speaking earlier today Buffett gave a very cheerleader type forecast:
I am a huge bull on this country. We are not going to have a double-dip recession at all. I see our businesses coming back across the board.I'm not sure what data Buffett is looking at, but Consumer Metrics, which monitors durable goods purchases in real time, isn't detecting anything in the economy that should justify happy talk from Buffett.
Further, Buffettt's strength used to be analysis of individual stocks, perhaps his focus should return to that. His Berkshire Hathaway is the largest shareholder in Wells Fargo Bank. This might not be the best position to hold. Analysts who crank out the numbers the way Buffett used to tell me that Wells Fargo may have as much as a trillion dollars off the books, no one knows what the true value of that trillion dollars in assets is and what the liabilities are against those trillion. It could be a big problem for Wells Fargo.
Warren is looking at the only thing that matters to Warren - his portfolio. He is long and wrong, and knows it. And the only way he's getting out of this with a positive P+L this time is if the market is sold to greater fools.
ReplyDeleteOf course, with Banana Ben and the QE 2.0 brigade, he just might get what he (Warren) wants. And the rest of us will get inflated commodities.