Road Runner

Buffett Likes to Be Early; Don't Rush to Follow

bobbobwhite, You base your idea that Buffett's purchase of GE may have been a mistake because the stock has sagged since he bought it about ONE MONTH ago!? A month is nothing on the Buffett timeline. He once said that people should be limited to trading stocks once a year.

Buffett Likes to Be Early; Don't Rush to Follow

Why wait to buy stocks?!

The Federal Reserve and Treasury are pumping trillions (with a "t" and a "s") into the banks which will eventually feed into the economy sometime in late 2009. There is no way the government (or any world government) is going to let another finance company fail now knowing the devastation the Leyman failure created (the Leyman failure started this financial crisis because banks stopped trusting each other and refused to lend to each other). LIBOR is coming back down to normal levels meaning the banking system is unthawing. Governments and central banks around the world are taking aggressive action in unison to prevent further bank deterioration.

Gasoline prices have plummeted giving almost every person and business a big “tax” cut. This will eventually give a boost to the economy becoming visible in late 2009.

I see 2010 as a big economic recovery year because of all the extra money in the economy from “cheap” gas and the financial bailout. Stocks will anticipate this recovery sometime in 2009, if not sooner.

Buffett is buying - he is a dogged value investor that demands a good price for quality companies before he buys. You just have to be patient like him.

Now, sounds like "thee" time to be buying stocks. Stocks have already crashed to unreal P/E levels. Forget trying to find the absolute bottom. Set limit orders to buy at 5 to 15 percent below current levels, depending on how much you want a stock. There is a good chance you will get your price because hedge funds are still selling stocks to meet redemptions and losses, and any little “spook story” now causes weak-kneed investors to run for the door in capitulation.

One more thing. Only 11 more days to November and we’ll be out of the notoriously bad “trick or treat” month for stocks.