Saturday, April 4, 2009
The Buffett bottom
Warren Buffett was criticized for his "Buy American" piece in the NY Times on October 16th last year.
Here's the piece:
We also had a skewering of the same piece by Doug Kass, on the exact day that the market bottomed:
On March 3, Doug Kass turned bullish on stocks:
I am fully cognizant of the magnitude of our economic and credit challenges and that the future is not what it used to be. Indeed, my expectation of The Great Decession, which is somewhere between a garden variety recession and The Great Depression, remains intact and is my baseline expectation...
It is now time for me to adopt another variant view by espousing a more bullish opinion on the U.S. stock market.
On March 10, Doug Kass, on Kudlow said the the market could be in the process of making a new generational low, 26-49 seconds into the clip.
Just two weeks later, on March 27, Doug Kass changed his mind and told viewers to flip stocks bought in the generational low, as he thought stocks would probably consolidate for the next 60 days, and now it was prudent to raise cash:
I am going to stay true to what brought me here -- namely, my baseline expectation and forecast expressed in early March, which, again, parallels the slope of the stock market in 1937-1939 -- and suggest that it is now an appropriate time to raise some cash.... The gloom and doom that permeated the investment scene in early March is now disappearing. My sense is that, not unexpectedly, investor optimism is now on the rise and that sentiment indicators will exhibit that heightened optimism as they are released in the days ahead. This coupled with overbought technical indicators lead me to a more cautious view now."
A generational buy and sell all in a couple of weeks!
But what people forget to mention about Buffett is that when he wrote his Buy American piece on October 16th, Buffett, in an interview also said that "America would be fine in the next five years, it's just the next five months that we have to get through."
On September 25, Buffett said that stock buyers "didn't need to be so precise, and investors are scared and buying from scared investors...in the next six months...pays off in the end."
On March 9, at 5:00 in the morning, in Omaha Nebraska, on the day of the market bottom, Buffet gave a lengthy question and answer interview on CNBC.
So for those folks, whose algorithms and quantitative equations aren't working in this market, and who have such a hard time recognizing the 666 bottom put in by the S&P, just add 6 months to Buffett's call in September, or just add 5 months to his call in October, or just pick the day he was interviewed on CNBC, and then, call it the Buffett bottom.
Call it whatever you want, as long as you can call it something that will get you to move from your bearish stance!
So now you have the 666 bottom writer, standing in front of Buffett's house, with the ping pong ball in my pocket, that Bill Gates hit in the fountain at Borsheim's during the 2007 shareholder meeting, with my face all swollen up, after I was bitten by a spider, after sleeping in a roach hotel, at the outskirts of Omaha, because I didn't make a timely hotel reservation for the shareholder meeting!
But at least I made it to the meeting!
And it's the same with this market.
The bulls just won't quit!
Posted by Palmoni at 1:42 PM