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Politics : Foreign Policy Discussion Thread -- Ignore unavailable to you. Want to Upgrade?

To: zonder who wrote (1613)	1/3/2003 9:32:15 PM
From: KLP	Read Replies (1) \| Respond to of 15987

zonder, I found an article re Timothy Vick and his OPINION of what Warren Buffett might be doing.... and posted it ... It was in direct response to Baldur's (now gone) comment that the economy was "all Bush's fault"....Those that believe that haven't been paying attention for the last 3 years...March 2000 everything started heading south...way before the Nov 2000 election. The current info at this house is that the price to earnings of most companies is still way too high, and so the markets will continue to go down...NO matter WHO is in the White House. I wouldn't ever comment on REIT's as I know nothing about them. I asked you before, with not much response, "Where do you, or anyone else, think the future growth for the world's economy will come from....?" It certainly does have something to do with Foreign Affairs, and more so, I believe as we have become a global economy. Q: From your study of Warren Buffett's strategy, how would he be investing right now (if he would be)? A: The closest parallel we have to how Mr. Buffett may behave is the 1990-'92 period, in which he took a number of positions in cyclicals that were on the rebound and took companies private during a downturn in their industry in order to enjoy the benefits of their growth during the ensuing expansion period. What is different today is that Mr. Buffett will not find nearly as many values in common stocks as he could 10 years ago, when many, many blue chips were trading at eight times earnings or below. Today, he's facing a situation where blue-chip companies have fallen from 35 times earnings to 20 times earnings. They're not screaming "bargain" in his mind. Instead, I suspect Mr. Buffett will continue to buy out-of-favor companies and take them private under Berkshire's umbrella. He seems to have a knack for finding companies willing to sell to him at 10 times earnings or below and milk those companies for their cash flows. He's building for himself an empire of cash-generating companies that will give him the opportunity to really juice [Berkshire Hathaway's] operating and investment earnings in the future. He handled this bear market brilliantly, although we will not see the full effect of his genius until the economy is well into the next expansionary phase.