Buffett sees turnaround down road
SEATTLE POST-INTELLIGENCER
seattlep-i.nwsource.com
Buffett sees turnaround down road
Financial guru shares some insights at CityClub
Saturday, July 21, 2001
By PAUL NYHAN
SEATTLE POST-INTELLIGENCER REPORTER
Financial guru Warren Buffett offered some encouraging words on the nation's economy yesterday, saying it will bounce back, although it may take a while.
Although the economy may be close to a recession, the system is healthy enough to recover, Buffett said yesterday. Even though U.S. stock markets have slumped along with the economy, equities in general remain expensive, he added.
"It may take a little longer than people think," Buffett told the CityClub during a luncheon "conversation" yesterday. "I do not think stocks are cheap."
The Nebraska native didn't embrace the tech boom in recent years. Rather, he told a collection of chief executives in 1999 that the stock market was overvalued and couldn't extend its meteoric rise, as the Nasdaq composite index was poised to break through 3,000 and would exceed 5,200.
The Nasdaq closed at 2,029.37 yesterday.
The chairman of closely watched Berkshire Hathaway Inc. has kept a basic approach to investing: Stick with what you know.
"I look for things that I can understand," Buffett said in a speech littered with both humor and serious observations. "My job is asset allocation and not getting in the way of managers."
The 70-year-old financier says he has been honing his investing skills since he was 6. By the time he turned 10, he had checked every investment book out of his local library.
From time to time, Buffett has drawn attention for his political stances, as well as his market positions.
A strong supporter of estate taxation, he became embroiled in the recent fight over repealing the tax.
In June, President Bush signed a $1.35 trillion tax cut into law that includes an eventual repeal of the estate tax by 2010.
Buffett joined Microsoft founder Bill Gates and a collection of other wealthy individuals to oppose ending the estate tax.
"I am not a big believer in the divine right of the womb," Buffett said yesterday.
He said the massive tax cut likely won't give the sluggish economy a huge boost. Instead, Congress and Bush should focus on trimming tax rates for people in lower brackets, Buffett said.
Although he avoids tech companies, he offered some kind words for the Puget Sound region's economy and one of its biggest stars, Amazon.com.
The region "has great momentum, clearly," Buffett said. "I think Amazon is a terrific enterprise."
The speech was one of the public highlights of a visit that also includes parties and golf with friend Bill Gates.
Buffett said he likely won't be joining the Internet investing community.
"I don't bring anything to that party.
"BEST OF BUFFETT
Warren Buffett is not only one of the most successful investors of the 20th century, he's also one of the wittiest:
"You cannot buy love. You can buy sex. You can buy testimonial dinners..."
"The only way to be loved is to be loveable, which really irritates me."
One of his Berkshire Hathaway companies, See's Candy Inc., makes 80 percent of its money just before the Christmas holidays. "The company song is 'What a friend we have in Jesus'"
"I would not say it is more difficult to be a long-term investor...If you own a stock and it doesn't go any place it seems like a long-term."
On inheritance taxes: "I am not a big believer in the divine right of the womb." |
