Buy low, sell high

Warren Buffett speaks, in Fortune magazine online. An excerpt:

Hard to imagine, but it wasn’t long ago that a good number of people on Wall Street and in Silicon Valley thought this fabled investor was irrelevant, washed up. Buffett’s take on things seemed out of tune. The rules of the game had changed, and he just didn’t get it.

“It was a mass hallucination,” Buffett says, “by far the biggest in my lifetime.” Scary stuff, yet Buffett looks hardly perturbed. There is no self-regret on his face. Maybe that’s because he wasn’t a party to any of that malarkey–the bubble or its popping.

“The bubble has popped, but stocks are still not cheap.” There is no question, however, that now is a better time to buy stocks than it was in 1999, he confirms. Buffett’s investing precepts remain unflinching as well: “Investors need to avoid the negatives of buying fads, crummy companies, and timing the market,” he says. “Buying an index fund over a long period of time makes the most sense.”

What about buying Berkshire Hathaway stock? “I don’t know about that; it’s kind of high right now,” he says, “though I’d rather own it than the S&P 500. When we were talking about buying back our stock [in early 2000 when it dipped into the low 40,000s], now that was a real sign!” He lets out one of his patented guffawing chuckles, kicking his feet up on the glass coffee table. His stock has risen to more than $70,000 since then.


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