Thursday, August 11, 2011

Buffett Tells Serwer that He is Buying Stocks

When Warren Buffett sticks to stocks, his true area of a understanding, he can be insightful.

Here are the takeaways, from a recent interview conducted by Fortune's Andy Serwer:
 Buffett reminds me, "The lower things go, the more I buy. We are in the business of buying," [both securities and, if he can find them, big companies.] (And no, he won't tell me what he's picking up on the cheap.) Buffett always makes his job sound so easy, but of course it isn't. All you need is a multi-billion dollar war chest, nerves of titanium, and a brilliant, analytical mind. Not a very big group there...

So what about the health of his businesses? "Up until right now, all of our businesses have been coming back---even Europe isn't doing that badly---except for businesses relating to home construction which is on its rear end. [Importantly Buffett did say that if events continue like the last few weeks it will change things.] Business has been coming back steadily, even more than the mood of the public."...

In the meantime, Buffett is looking to buy stocks -- oh, and apparently to sell Berkshire bonds too. Berkshire is reportedly taking advantage of record low rates and issuing bonds to raise dirt-cheap capital. For Buffett right now at least, this is not a time for fear. This is a time for action.
I'm with Buffett on buying stocks here. I also think his reporting on the steady strength at the businesses Berkshire operates is accurate. I find particularly interesting that Berkshire is selling bonds in here to raise capital. That looks to me like a bearish call on bonds and that he expect rates to climb--also in line with my thinking.

1 comment:

  1. You have to admire the people who still practice their craft despite being on top of the monetary ladder. This is true passion.