[glen]

Buffett: I'm Buying

WB said:

Today people who hold cash equivalents feel comfortable. They shouldn’t. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value. ... Those investors who cling now to cash are betting they can efficiently time their move away from it later. In waiting for the comfort of good news, they are ignoring Wayne Gretzky’s advice: “I skate to where the puck is going to be, not to where it has been.

If Gretz was playing for the Sens now, he could just skate to our net

[barmar]

I don't hold huge amounts of cash, but some of what I have is in The Reserve Fund, a money market fund. Guess what happened last month: their NAV dropped to 97 cents on the dollar (the "broke the buck", in Wall Street parlance -- this is the first time this has happened to a publicly-traded money market mutual fund), because they held large amounts of Lehman Brothers commercial paper. So even cash isn't immune from dropping in value in these turbulent times.

Luckily, one of my brokerages (Ameriprise Financial Planners) is stepping up and making up the difference, as well as moving the money into an insured account once the hold on redemptions is lifted.

[Al_U_Card]

The seg funds are only as good as the insurers and the reinsurers behind them....AIG anyone?

The purpose of a cash position is not for safety, it is to take advantage of opportunities. Part of your overall strategy should always be to have a big enough cash position to allow movement to where the money will be.

[y66]

When Gretzky & Buffett talk, I listen.

[Al_U_Card]

So, now at all time lows (read bargains) are companies that are poised to take on the future. Established, properly run organizations that will have a stake in alternate energy supplies (fuel cells etc.) recycling, efficient transportation, health care, information gathering and parsing etc.

Find those companies, their valuations will be close to or under the 10:1 price:earnings that = goldmine. Buy low....sell high is, I believe, the credo.

[kenberg]

Buffett actually enjoys this sort of thing. And he is good at it. No doubt I should take advantage of the low prices by making some shrewd investment but guess what, I'm not shrewd. Also, I'm lazy. I'm not rich but I also don't have expensive tastes. Visiting the grandchildren is free.

[Al_U_Card]

We won't see an upward trend in the markets until mid november.....then it will be time to move

[barmar]

I invest primarily in mutual funds. I expect the fund managers and their research teams to be shrewd like Buffett.

But they obviously all can't be. The market goes down because lots of people are selling, and most of these are fund managers and other institutional investors.

[cherdano]

barmar, on Oct 19 2008, 09:31 PM, said:

I invest primarily in mutual funds. I expect the fund managers and their research teams to be shrewd like Buffett.

But they obviously all can't be. The market goes down because lots of people are selling, and most of these are fund managers and other institutional investors.

A fund manager has to sell when customers are selling his fund, and has to buy when customers are buying his fund.

[mike777]

cherdano, on Oct 19 2008, 11:14 PM, said:

barmar, on Oct 19 2008, 09:31 PM, said:

I invest primarily in mutual funds.  I expect the fund managers and their research teams to be shrewd like Buffett.

But they obviously all can't be.  The market goes down because lots of people are selling, and most of these are fund managers and other institutional investors.

A fund manager has to sell when customers are selling his fund, and has to buy when customers are buying his fund.

yes....to a great degree...

OTOH he can sell tres....when he must sell.. and he can buy tres when he must buy.....but yes........in general....I agree.............

[barmar]

cherdano, on Oct 20 2008, 12:14 AM, said:

barmar, on Oct 19 2008, 09:31 PM, said:

I invest primarily in mutual funds.  I expect the fund managers and their research teams to be shrewd like Buffett.

But they obviously all can't be.  The market goes down because lots of people are selling, and most of these are fund managers and other institutional investors.

A fund manager has to sell when customers are selling his fund, and has to buy when customers are buying his fund.

Outside unusual periods like this, funds generally maintain sufficient cash reserves to satisfy withdrawals. They're only forced to sell if there's a big run on the fund. So under normal conditions they can buy and sell based on their best judgement.

[mike777]

barmar, on Oct 21 2008, 11:47 PM, said:

cherdano, on Oct 20 2008, 12:14 AM, said:

barmar, on Oct 19 2008, 09:31 PM, said:

I invest primarily in mutual funds.  I expect the fund managers and their research teams to be shrewd like Buffett.

But they obviously all can't be.  The market goes down because lots of people are selling, and most of these are fund managers and other institutional investors.

A fund manager has to sell when customers are selling his fund, and has to buy when customers are buying his fund.

Outside unusual periods like this, funds generally maintain sufficient cash reserves to satisfy withdrawals. They're only forced to sell if there's a big run on the fund. So under normal conditions they can buy and sell based on their best judgement.

this is complicated but:
1) you expect the funds to invest as they say they will invest!
2) If you want to maintain a cash margin...you do so on your own ....self allocate!
3) Anyone as hmmmmmmm ten years old knows.....market will go down alot in your lifetime.....maybe.....next year! I would hate it if my stock mutual fund.. always has huge cash fund to ..........worry about fund redemptions! I would worry my commidity...or real estate.. or short term bond...or long term bond.. or govt bond etc etc kept large cash........position!
4) I expect my stock mutual fund to invest in stocks...not cash! LOL you can stop this simple.....have redemption fee........you buy and then sell no problem you pay huge penalty!
5) btw having a run on a mutual fund should be normal....it happens alot!

[kenberg]

Taking my cue from the estimable Wane Gretzky I shall venture forth into the market today. Bambi among wolves. Some years back I bought MCI which sat there and did nothing much until it became Worldcom. Suddenly I was an investment genius. But then... I never understood why it skyrocketed up, I never understood why it crashed. I stupidly didn't buy Google at 100, I wisely didn't buy it at 600 or 700 or whatever the peak was. Basically I'm clueless and worse, I lack the interest to correct my cluelessness.

[Al_U_Card]

Try buying companies that will benefit from infrastructure investments and make-work projects.....we may be seeing quite a few of those in the near future....