Buffet Backs Team America, Gets Battered

Last week mega-rich chest beater Warren Buffet wrote an Op-Ed in the NY Times claiming he was buying up US stocks as fast as possible, and believed the market had pretty much bottomed out:

“I’ve been buying American stocks…Why? 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…”

The sage continued:

“A little history here: During the Depression, the Dow hit its low, 41, on July 8, 1932. Economic conditions, though, kept deteriorating until Franklin D. Roosevelt took office in March 1933. By that time, the market had already advanced 30 percent. Or think back to the early days of World War II, when things were going badly for the United States in Europe and the Pacific. The market hit bottom in April 1942, well before Allied fortunes turned. Again, in the early 1980s, the time to buy stocks was when inflation raged and the economy was in the tank. In short, bad news is an investor’s best friend. It lets you buy a slice of America’s future at a marked-down price.”

Interesting history lesson granddad. So how’s that decision been treating your shareholders at Berkshire Hathaway then?

Well, perhaps not so well, as this recent post shows, outlining Buffet’s equity purchases fro 2008:

NRG Energy (NRG)
Bought: $40 to $44.43 a share
Last close: $18.18

Sanofi-Aventis (SNY)
Bought: $32.32 to $38.04 a share
Last close: $29.08

Burlington Northern (BNI)
Bought: $76.65 to $91.99 a share
Last close: $80.47

Kraft (KFT)
Bought: $28.56 to $31.66 a share
Last close: $27.50

US Bancorp (USB)
Bought: $29.07 to $34.09 a share
Last close: $30.87

WellPoint (WLP)
Bought: $43.23 to $87.63 a share
Last close: $39.92

UnitedHealth (UNH)
Bought: $34.37 to $55.95 a share
Last close: $22.63

Apparently Berkshire Hathaway’s only profitable stock purchases so far this year have been Wells Fargo and some Chinese battery manufacturer called BYD.

Way to go!

Posted by Jonty Rhodes in Hot Money | October 19, 2008 5:52PM |