On the 16th of October 2008 Warren Buffet wrote an Op-Ed piece in the New York Times. It includes this section:
I’ve been buying American sto
cks. This is my personal account I’m talking about, in which I previously owned nothing but United States government bonds. (This description leaves aside my Berkshire Hathaway holdings, which are all committed to philanthropy.) If prices keep looking attractive, my non-Berkshire net worth will soon be 100 percent in United States equities.
A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors. To be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions. But fears regarding the long-term prosperity of the nation’s many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now.
Let me be clear on one point: I can’t predict the short-term movements of the stock market. I haven’t the faintest idea as to whether stocks will be higher or lower a month — or a year — from now. What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up. So if you wait for the robins, spring will be over.
On the 16th October 2008 the Dow Jones Industrial Average was at 8,451.19.
On the 6th March 2009 – 13 months ago – the Dow Jones Industrial Average was at 6,626.94.
Today the Dow Jones Industrial Average is at 10,997.35 (having been over 11,000 at the end of last week).
The Dow Jones Industrial Average is up 30.13% since the 16th October 2008 and 65.95% since the 6th March 2009.
UPDATE: The Dow Jones Industrial Average hit an all-time high of 14,164 on the 9th October 2007.
He is Warren Buffett – and he can prove it.