Warren Buffet OpEd Piece in NY Times

Maybe old news, but its worth another mention. Warren Buffet submitted an opinion piece in the NY Times last week saying he is buying American stocks right now and will continue to buy if stock prices remain at the level they are now (or were at the time the piece was written).

I have been adding to our positions this month, mostly by buying the Vanguard Total Stock Market Index (VTI). Valuations have come way down and are very close to being attractive to me. If the stock market fell another 10-20% below the current lows I would consider rethinking our strategy of building cash for a home down payment and might shift the bulk of that money into stocks.

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Comments (5)

I made the mistake of investing too much and keeping too little in cash. The lesson for me is to keep a good portion of my assets in cash, so right now I'm sending my monthly savings to money market accounts. Any idea what percentage I should keep in cash?

Posted by Stephen | October 28, 2008 1:19 PM

You will have absolutely no need for cash if you hedge any long position with some puts.

I'm playing straddles because volatility is still crazy high across the board.

There are far more creative ways to make money than being long on equities or sitting on mountains of cash.

Posted by concerned | October 29, 2008 3:42 PM

You might find this NYT article interesting also: balancing Buffett's comments with Bogle & a bearish Mr Melcher.
http://www.nytimes.com/2008/10/29/business/economy/29leonhardt.html?em=&pagewanted=all

Posted by Anonymous | October 30, 2008 5:52 PM

Hi Concerned, thanks for the advice but I don't understand what you are saying. I don't know anything about investing. I just have a few mutual funds that's all. I started to read blogs a few months ago to see if I can learn something. Thanks again.

Stephen

Posted by Stephen | October 31, 2008 5:56 PM

@ Stephen - now is precisely the wrong time to be building a cash stockpile. Stocks are on sale and should be bought.

@ 2 mil - you say that "Valuations have come way down and are very close to being attractive to me".

Haven't you been constantly buying stocks since the inception of this blog? I don't remember you ever switching to cash.

Posted by CPA1298 | November 3, 2008 5:26 PM