Wednesday, September 24, 2008

Wisdom from the Best Investors

Warren Buffet said this morning, the economy is like a bathtub--it can't be full in one place, and empty in another. If one part is in hot water, we all are. He's a capitalist who sees the socialist dimension of economics. That's rich.

Go see the bull on Wall Street.  You'll see that if it looks dangerous being in front of the bull, with its lowered horns, you really don't want to be behind the bull, either.

The Sunday New York Times business section listed Richard Fuld, the CEO of Lehman Brothers, as worth in January at 827 million, and his assets this week at a measly two million. As a taxi driver said, "That's gotta hurt."
Warren Buffet has a disinterest in money that allows him to invest dispassionately, and that perversely has made him so wealthy. Money is fickle like that. It doesn't come to those who want it, it comes to those who can see through the illusions of the market to what has enduring value. Warren says that the market is a voting machine in the short run, and a weighing machine in the long run. Even greater than the power of his money is the power of his wisdom, which has such power to influence others in government and Wall Street.
Sir John Templeton said that the time to buy is when blood is running in the streets, and that's what Buffett did this week, investing five billion in banking while others were dumping their plummeting shares.
"No one knows who's swimming naked until the tide goes out," he said.
The tabloid headline of Richard Fuld's testimony in Washington was "Fuld on the Hill."
In this week's New York Times magazine, Christian Oth asked Edgar Bronfman, the"billionaire philanthropist," if Forbes assessed his net worth accurately at three and a half billion; the interviewer also asked how much money he'd lost recently, and Bronfman said he paid no attention.
"You don't get ulcers?"
"My father said, "I don't get ulcers, I give ulcers."
The only thing we have to do to make money is to buy low and sell high, which is so hard that the great investing houses have designed computer systems to do that--still, they trip up.  
Going against the opinions of the majority is tough.  Warren Buffett said, "Don't ask the barber if you need a haircut."
Money magazine’s editor, Eric Shurenberg asked George Soros, “Growing up in Nazi-occupied Hungary must help you keep today’s risky markets in perspective.”
“The prospect of extermination was a formative experience for me.” He laughed. “The Nazis taught me that the abnormal can become normal.”
“And the lesson in that?”
“It’s important in life and investing always to question yourself. Understand that you may be wrong especially when you believe too firmly that you’re right.”
“Have your billions (over nine) made you happy?”
“I’m reasonably happy, but the money’s not the point. It’s an indication that I’ve succeeded in the grand adventure of understanding reality.”
Go see the bull on Wall Street.  You'll understand that while you don't want to be in front of the bull, you don't want to be behind it, either.