42 replies to this topic

[humble1]

buffet made his seed money from insurance in a time when risk was much less than the premia warranted. there was nothing spectacular about the other parts of his investing. he happened to be engaged in the biggest bubble of all time when just about everything went up. insurance underwriting can be a two edged sword; the other edge is starting to swing. he is WAY too impressed with himself.

Edited by humble1, 12 February 2008 - 01:59 PM.

[Kimston]

Precisely. It's all about perception and historical perspective. Some of the most respected money men and economists in '29 were quoted saying things like "We have entered a permanent plateau of prosperity". The wizard of the day were telling the public they were buying to support the market. Buffet is an analog.

Kimston

Permanent prosperity talk was all the rage in 2000.

Right now just about every talking head predicts a depression as far as eye can see.

Just to clarify, the permanent prosperity talk was at the top in '29. The scemes to support the market were after the top, when fear was running rampant.

Kimston

[rameshutt]

buffet made his seed money from insurance in a time when risk was much less than the premia warranted. there was nothing spectacular about the other parts of his investing. he happened to be engaged in the biggest bubble of all time when just about everything went up.

insurance underwriting can be a two edged sword; the other edge is starting to swing. he is WAY too impressed with himself.

Excellent point. What if, as Buffett himself says all the time, he IS fallible this time?

Take a look at today's market - I simply don't believe the headlines - of course that is nothing new:
Major Mortgage Lenders Freeze Foreclosures- AP

The Bush administration, trying to deal with a worsening housing slump, announced a new initiative Tuesday aimed at helping homeowners about to lose their homes. For those qualified, it will put the foreclosure process on hold for 30 days.

* Buffett Offers to Back Municipal Bonds- AP
* Stocks Rise After Buffett Offer- AP

Look at these stocks:
MBI 11.87 Trade Time: 2:45PM ET Change: Down 1.71 (12.59%)
ABK 8.89 Trade Time: 2:45PM ET Change: Down 1.59 (15.17%)
GS 180.48 Trade Time: 2:46PM ET Change: Down 5.39 (2.90%)

Banks are up though.
Lastly, IYT Last Trade: 85.33 Trade Time: 2:47PM ET Change: Up 0.37 (0.44%)
from a day high of 86.33 - appearing to stall at 200 day EMA.