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On 16 October 2008, the New York Times published an op-ed letter contributed by Warren Buffett. The message of the letter was clear–Buffett is a buyer of US stocks.

In the letter, Buffett offers a few words of wisdom which has made him perhaps the greatest investor of all time.

“A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors. To be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions. But fears regarding the long-term prosperity of the nation’s many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now.”

Buffett says that people who are high in cash have opted for a “terrible long-term asset”. Personally Buffett is planning to move towards 100% in US Equities.

“If prices keep looking attractive, my non-Berkshire net worth will soon be 100 percent in United States equities.”

Buffett draws some analogies between previous recessions/depressions and how the stockmarket usually runs ahead of the economy. When we look at the carnage even in Malaysia, it does make sense. Fundamentals have not changed much except that we are looking at a global slowdown which will affect us somewhat. However liquidity is ample, exports are stable, ringgit is low and interest rates are low.

“In short, bad news is an investor’s friend.”

So what Buffett said can be equally applied to Malaysia!

You can read more about the article here:
http://www.nytimes.com/2008/10/17/opinion/17buffett.html