Buffett Says Now Is the Time to Buy U.S. Equities (Update2) By Alan Purkiss [0] [Enlarge Image/Details] <http://www.bloomberg.com/apps/news?pid=photos&sid=awp1mL4bqAhY> Oct. 17 (Bloomberg) -- Warren Buffett <http://search.bloomberg.com/search?q=Warren+Buffett&site=wnews&client=w\ news&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&\ getfields=wnnis&sort=date:D:S:d1> said he's buying U.S. stocks and, if prices stay attractive, his personal investments, as distinct from his stake in Berkshire Hathaway Inc <http://www.bloomberg.com/apps/quote?ticker=BRK%2FA%3AUS> ., will soon be wholly in American equities.
Writing in The New York Times, he said he's following the principle: be fearful when others are greedy, and greedy when others are fearful. Exaggerated concern about the long-term prosperity of financially secure U.S. companies is foolish, and most probably will be setting profit records in years to come, Buffett said. While short-term stock movements can't be foretold, the likelihood is that the market will recover before the economy or general investor sentiment rebound, and ``if you wait for the robins, spring will be over,'' he said. Referring to the 1930s Depression, Buffett pointed out that the Dow Jones Industrial Average reached its nadir on July 8, 1932; economic conditions continued to deteriorate until Franklin D. Roosevelt <http://search.bloomberg.com/search?q=Franklin%0AD.+Roosevelt&site=wnews\ &client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&\ filter=p&getfields=wnnis&sort=date:D:S:d1> became president in March 1933, and by that time the market had climbed 30 percent. Bad news, Buffett wrote, is an investor's best friend, because it enables the purchase of ``a slice of America's future at a marked-down price.'' Buffett, ranked the richest American by Forbes magazine, has committed at least $28 billion of Berkshire's cash this year to acquire <http://www.bloomberg.com/apps/quote?ticker=BRK%2FA%3AUS> companies, finance buyouts and purchase securities as the contraction in global credit markets drove down stock prices and sent firms searching for funds. GE Investment The deals include a $3 billion investment in General Electric Co., completed as planned on Oct. 16, spokesman Russell Wilkerson <http://search.bloomberg.com/search?q=Russell%0AWilkerson&site=wnews&cli\ ent=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filt\ er=p&getfields=wnnis&sort=date:D:S:d1> said today. Berkshire gets $3 billion in preferred shares that pay an annual 10 percent dividend and are callable after three years at a 10 percent premium, GE said Oct. 1. Buffett also gets warrants to buy $3 billion of common stock with a strike price of $22.25 a share for five years. Buffett built Nebraska-based Berkshire over four decades from a failing textile manufacturer into a $180 billion holding company by buying out-of-favor securities <http://www.bloomberg.com/apps/quote?ticker=BRK%2FA%3AUS> and businesses. Berkshire was the largest stockholder of Coca-Cola Co., <http://www.bloomberg.com/apps/quote?ticker=KO%3AUS> Wells Fargo & Co., and Kraft Foods Inc. <http://www.bloomberg.com/apps/quote?ticker=KFT%3AUS> as of June 30, according to Bloomberg data. Mutual funds and individuals mimic his stock picks in an effort to duplicate his success, and an academic study in 2007 found that using this strategy for 31 years would have delivered annualized returns of about 25 percent, double the gains of the S&P 500. Berkshire advanced $6,650, or 5.9 percent, to $119,800 at 4:15 p.m. in New York Stock Exchange composite trading. The stock has declined about 15 percent this year, beating the 36 percent drop of the Standard & Poor's 500 Index. To contact the reporter on this story: Alan Purkiss <http://search.bloomberg.com/search?q=Alan+Purkiss&site=wnews&client=wne\ ws&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&ge\ tfields=wnnis&sort=date:D:S:d1> in London at [EMAIL PROTECTED] <mailto:[EMAIL PROTECTED]> Last Updated: October 17, 2008 16:33 EDT
