To: Sun Tzu who wrote (1324 ) 8/28/2001 11:21:52 PM From: Didi Respond to ST,Actually, I believe Mr. B.'s quote was "I think stocks will be boring for the next decade". 1997 Warren Buffett's Letter to Berkshire Shareholders" :Though we don't attempt to predict the movements of the stock market, we do try, in a very rough way, to value it. At the annual meeting last year, with the Dow at 7,071 and long-term Treasury yields at 6.89%, Charlie and I stated that we did not consider the market overvalued if 1) interest rates remained where they were or fell, and 2) American business continued to earn the remarkable returns on equity that it had recently recorded. So far, interest rates have fallen -- that's one requisite satisfied -- and returns on equity still remain exceptionally high. If they stay there -- and if interest rates hold near recent levels -- there is no reason to think of stocks as generally overvalued. On the other hand, returns on equity are not a sure thing to remain at, or even near, their present levels. Personally I took this to mean we will not see the mo-mo days for a long time and that the market will take two steps forward and one step back for a while, as it has done other periods fallowing huge sustained runs. I am guessing that in the rush to make headlines, someone at business week chose to interpret that statement to their liking.
