If you look at his record, Buffett has been right at almost every major financial turn, even when the entire financial world seemed to be of a different opinion.

In 1973-74 he correctly opined that “now is the time to buy stocks and get rich.” And it really was.

During the leveraged buyout era of the 80’s, he criticized “junk” bonds and their underlying rationale. It turned out that most of those issues really were junk.

In the 90’s he campaigned for the expensing of stock options when the whole of corporate America was going the other way. If anyone had listened, many abuses might’ve been avoided, including those in the now-ailing U.S. financial industry.

Buffett shunned tech stocks even when it seemed like they would never go down. The tech crash eventually proved his oft-derided decision right.

And yes, he spoke out against derivatives at a time when just about everyone else was enamored with them, including Alan Greenspan. He called them financial weapons of mass destruction — an apt description considering what we are witnessing today.

Buffett and Munger have grounded their business philosophies on common sense. They have perfected their fundamentals and do not get caught up in new ways of “making” money. Considering the results they have achieved, everyone should consider doing the same.

great read. warren buffet is indeed seen by many insatiable and greedy investors a nuthead…but at the end of the downward spiral, warren is still on top.

Hello!

A friend sent me this. I thought I’d share it here.

“We begin this New Year with dampened enthusiasm and dented optimism. Our happiness is diluted and our peace is threatened by the financial illness that has infected our families, organizations and nations. Everyone is desperate to find a remedy that will cure their financial illness and help them recover their financial health. They expect the financial experts to provide them with remedies, forgetting the fact that it is these experts who created this financial mess.

Every new year, I adopt a couple of old maxims as my beacons to guide my future. This self-prescribed therapy has ensured that with each passing year, I grow wiser and not older. This year, I invite you to tap into the financial wisdom of our elders along with me, and become financially wiser.

* Hard work: All hard work bring a profit, but mere talk leads only to poverty.

* Laziness: A sleeping lobster is carried away by the water current.

* Earnings: Never depend on a single source of income. [At least make your Investments get you second earning]

* Spending: If you buy things you don’t need, you’ll soon sell things you need.

* Savings: Don’t save what is left after spending; Spend what is left after saving.

* Borrowings: The borrower becomes the lender’s slave.

* Accounting: It’s no use carrying an umbrella, if your shoes are leaking.

* Auditing: Beware of little expenses; A small leak can sink a large ship.

* Risk-taking: Never test the depth of the river with both feet. [ Have an alternate plan ready ]

* Investment: Don’t put all your eggs in one basket.

I’m certain that those who have already been practicing these principles remain financially healthy. I’m equally confident that those who resolve to start practicing these principles will quickly regain their financial health.

Let us become wiser and lead a happy, healthy, prosperous and peaceful life.”

–Warren Buffet

In the current crisis, shares of companies run by people with a higher level of integrity are not as badly hit as those with a lower level of integrity. Examples of companies with a higher level of integrity are: Berkshire Hathaway
and

Wal Mart ?????????????!!!!!!!!!!!!!!

PLEASE…….get your facts straight at least.

http://www.fastcompany.com/node/54763/print

The Man Who Said No to Wal-Mart
By Charles Fishman

What struck Jim Wier first, as he entered the Wal-Mart vice president’s office, was the seating area for visitors. “It was just some lawn chairs that some other peddler had left behind as samples.” The vice president’s office was furnished with a folding lawn chair and a chaise lounge.

And so Wier, the CEO of lawn-equipment maker Simplicity, dressed in a suit, took a seat on the chaise lounge. “I sat forward, of course, with my legs off to the side. If you’ve ever sat in a lawn chair, well, they are lower than regular chairs. And I was on the chaise. It was a bit intimidating. It was uncomfortable, and it was going to be an uncomfortable meeting.”

It was a Wal-Mart moment that couldn’t be scripted, or perhaps even imagined. A vice president responsible for billions of dollars’ worth of business in the largest company in history has his visitors sit in mismatched, cast-off lawn chairs that Wal-Mart quite likely never had to pay for.

The vice president had a bigger surprise for Wier, though. Wal-Mart not only wanted to keep selling his lawn mowers, it wanted to sell lots more of them. Wal-Mart wanted to sell mowers nose-to-nose against Home Depot and Lowe’s.

“Usually,” says Wier, “I don’t perspire easily.” But perched on the edge of his chaise, “I felt my arms getting drippy.”

Wier took a breath and said, “Let me tell you why it doesn’t work.”

very relevant article for curretn situation of the country!

On Wal Mart:

The 1 year return for Wal Mart shares is 2.8%. It preserved value and the business is doing fine and income is steady.

Facts:

Present a company that has similar results and then compare.

This is timely and sagely advice from the Oracle of Omaha. A business is a product of its owner. A businessman with integrity, profits not from short-sighted greed, but through the good will of his relations with his customers, suppliers and creditors. A businessman with a mind for order, fairness, integrity and transparency builds up a good reputation with all those who do business with him and would therefore profit everyone. The result would make everyone happy and more business would come to him. Whereas, a selfish, short-sighted, and deceitful businessman would cause tension, doubt and chaos with all of his dealings. He may successfully profit in the short term but he would also succeed in ruining his relationship with his customers, suppliers and creditors and would not be very willing to do business with him in the future.
If only the creators of those highly complex derivatives and other “weapons of mass financial destruction” took to account counter-party risk instead of of pursuit of short-term profit than we would have not be suffering from this current global economic turmoil.
As for the financial frauds and embezzlers like Madoff and our very own Legacy bank owners, they will get their time too. They can defraud people of millions and billions and maybe could manage to escape punishment in this lifetime but surely would not in the next. Of course, this may not be to helpful to the investors they have robbed from; so we must always remember to be cautious and prudent with our dealings especially when it comes to money and never let our own greed get rid of our common sense. If a deal is to good to be true then it usually is false.

Quote from money.cnn.com in 2004:

When a shareholder asked for Buffett’s worst mistake in recent years, he answered: Wal-Mart.

“I set out to buy $100 million shares of Wal-Mart at a [pre-split price of] $23,” recalled Buffett. “We bought a little and it moved up a little and I thought maybe it will come back a bit. That thumbsucking has cost us in the current area of $10 billion.”

Media is always second hand news. Always verify for yourself when your own money is concerned.

“In looking back on how we got here, the business press assumes a tone of rueful omniscience, as in this late-2007 New York Times piece on regulatory laxity under Alan Greenspan: “Had officials bothered to look, frightening clues of the coming crisis were available.” Of course, the clues the Times cites in the very next sentence—the ceaseless research of the North Carolina-based Center for Responsible Lending—were available had anyone bothered to look. So, a reader might well ask, why didn’t the media?”

“I worked as a Wall Street Journal staff writer for eight years ending in December 2004 and now critique the business media full time at the Columbia Journalism Review. I’ll attest that business journalists as a rule are as smart, sophisticated, and plugged-in as they seem. And yet that army of professional business reporters—an estimated 9,000 or so nationwide in print alone—for all practical purposes missed the biggest story on the beat. Why?”

http://www.motherjones.com/news/feature/2009/01/buying-the-bull.html