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Sunday, March 20, 2011

Buffett States the Obvious

Warren Buffett...perhaps the only person in the world who can make huge headlines by stating the obvious.

Today's headline on "Berkshire Will Not Exercise Goldman Stocks Immediately." The story explains that Buffett will not exercise his Goldman Sachs warrants - even though he would make a profit by doing so - because....(wait for it) he thinks the stock is worth more than it is trading at!

Pardon me, but isn't that why most people buy stocks in the first place - because they believe they are worth more than they are paying for them? Am I missing something? The article goes on to say Buffett believes that over time, the stock market will go up. During the credit crisis in 2008, Buffett made headlines by saying that the economy will "eventually recover."

It's hard to say why Buffett makes headlines with these statements. Is it that trading has become so prevalent that no one believes in investing anymore? Or, is it because pessimism has grown to such an extent that any positive statement, no matter how obvious, is embraced with open arms?

Whatever the reason, Buffett continues to be a source of sensibility - and the obvious.


"Well, I just don't know. I don't know whether Cotton's going to go up."

Warren Buffett, 2011


For additional information, see Berkshire Will Not Exercise Goldman Stocks Immediately