Warren Buffett Fans Explain Why They're Keeping the Faith
Rank-and-file investors are "losing faith" in stocks, according to a front-page story in the Wall Street Journal.
But rank-and-file readers of Warren Buffett Watch are reaffirming their own faith in the Oracle of Omaha and his call to buy U.S. stocks: "Be fearful when others are greedy, and be greedy when others are fearful."
A week ago, we asked for your thoughts on Faith, Doubt, and Warren Buffett at the end of a difficult year for Buffett followers.
Are you losing faith in Warren Buffett? The answer is a resounding 'no!'
There were almost 2000 responses to our non-scientific CNBC Poll asking that question. 77 percent of you chose, "No. Just as they have done before, stocks will bounce back. It's just a matter of time." (The poll remains open if you haven't voted yet.)
And here are many of the emails from around the world that I found in the email@example.com mailbox.
"The thundering heard never learns. In the late 1990's everyone wailed that Buffett had lost his touch and value investing was for old people unable to understand that 'this time it's different' and dot.com stock prices were going to infinity. Now everyone wails that Buffett has lost his touch and value investing is for old people unable to understand that 'this time its different' and all stock prices are going to zero. As the Harvard MBAs rush to put their money in zero yield T-Bills, I'm buying stock in companies with zero net debt, large amounts of cash on the balance sheet, strong positive cash flow, and growing earnings, at very low prices. Mr. Market hasn't changed since the days of Graham & Dodd and he never will."
- John S.
1999-2000. Cover page of prominent financial mag: "Warren Who"
2003. Same mag with Warren's profile in Roman warrior head gear: "Warren the Great"
- Rob & Monica
"I haven't ever doubted Warren Buffett, and when reading comments about people who say he needs a new crystal ball, I don't get fazed at all. Warren doesn't need a crystal ball as that would be gambling, no?
- Werner H., South Africa
"Let's not forget that Mr. Buffett, if I am not mistaken, lost about half his net worth back in the early 70s. Guess his strategy does, in fact, work well over time!"
- Christopher, Maryland
"He's still the only person I trust to invest my savings. He has put his reputation on the line repeatedly. He cares if his shareholders make money. I have no doubts. Berkshire Hathaway investments are poised to provide significant returns in the future."
- Joyce S.
"I just finished reading his biography and I feel more confident than ever in his talent. His track record shows that he may not necessarily get in at the bottom but he buys when things are cheap. If we are patient as he is then we shall reap the benefits. People, including the WSJ, have been critical before and he has proven them wrong. He has a massive amount of cash and people who are distressed come to him for help. I hope he lives many more years to see the result of these recent investments and continue to share his wisdom. He is the perfect antithesis to Madoff and that is why he is so beloved."
"Warren Buffett has been in the investing business since the 1950s, and there is no reason to believe that he has all of a sudden lost his touch just because his stock went down. One of the reasons why people are not making as much money in the stock market, (and the reason why Warren Buffett has become so rich), is that people lose faith in their investing philosophy. This time again, those who believe in buying stocks at bargain prices, will be rewarded 5, 10 years from now."
- Daniel R.
"These types of articles are the same as the ones written in 1999 and 2000 when Buffett was seen as not taking part in the dot com revolution, investments had passed him by. Then by the end of the bubble and downfall he was once again seen as the Wizard of Omaha. As a long term investor (not trader) it is best to buy on these dips. Too many people nowadays are traders and not investors. Buffett will again soon be seen as brilliant!"
- Jeff J., Wyoming
"He has made a lot of money on his BUD investment recently. He made some good deals on preferred shares in the last months. He is raking in dividends by the hundreds of millions every week and they are not taxed because not paid out in dividends. His companies are still very profitable. Where is the problem? Some people seem to be obliged to sell but that is their problem. The BRK share price will recover over time."
- Ludo T.
"I have a slightly different take. Albeit a dismal view. Since about 1997, we’ve had the dot com boom/bust which was the market going up but not for REAL. Then we had Enron, which proved our financial system was broken, enabling crooks to roam free. Now we have the Financial Services Meltdown which has only gone to PROVE the last 10 years were also not REAL. We all know, there’s more to come as we unwind this Enron-like fable! Now we have Madoff which most believe MUST be the tip of the ICEBURG. So, does ANYONE wonder why we are all depressed?
The EXPERTS (that did not predict this), now say, the stocks will bounce back. I believe they will come back but it will be many many many years and HOPEFULLY this time, it will be REAL. There is nothing to create a BOUNCE and nor should there be because for most of us ... it’s likely another sham, and will be time to get out!!! Don’t we deserve that! Don’t our Grandchildren deserve that? You have a lot of wise investors now, smart normal people who will be conned no more."
- Francis C.
"WE ARE BEING CRUEL TO BUFFETT ..."
"If his style of investments fail, then I am afraid it simply means that there is no such thing called investments. The whole Grahamian notion of investments in the domain of stocks is about applying a margin of safety. We all grew up believing that Warren Buffet applied this Grahamian notion in the best possible way. Despite that, if he fails then there is no such thing called investing in stocks.
I think we are being cruel to Buffet by measuring him in short-term when he himself makes no pretence of being a man with the crystal ball to know what's going to happen tomorrow. His bets today will have to be measured 5-10 years hence."
- S. Purohit
"Thank you for giving us the chance to say that we have not lost our faith in Warren Buffett. Of course, it is not religion, it is reason. Actually, he has proved to be successful for decades more than anyone else, and second, he has always explained in a simple way the basic principles, so there is no mystery. I am a very small European investor, but I want to tell you that following Buffett's advice, I am now investing more than ever before, and most in U.S. stocks...
Listening to the people who say that Buffett is not good anymore is stupid because it is always the same over the years. The stock exchange is cyclical, and every time it reaches the bottom, many people say that Buffett is wrong, and then they keep quiet when he gains again more than others, showing that they have not understood his old principles, and so many people go on selling when the stocks are down, and buying when they are up."
"For someone who has been a behind-the-sceens presence for years, it seems that Warren has embarked on an unusual new career since announcing his pending retirement - accessibility, visibility and now stock market muse. Despite his past ability to buy stocks (and the hold for the long term adviso), as well as the fact Warren doesn't buy stocks that he does not understand, it was surprising that Warren was dabbling in CDOs and SIVs.
I think Buffett has been on a year-long burnish the image tour, it seems there is a dual message to the public, back to buy/hold for the long term and be greedy in a down market. Maybe too much visibility has overshadowed his original theory of 'value investor.'
"This whole thing cracks me up. Warren Buffett is the richest man in the world. He has made his fortune by being diligent, resourceful, and smart, and he takes calculated risks when he thinks they are prudent. Since when are such attributes detrimental? Capitalism, and the unprecedented wealth enjoyed by generations of Americans, have been built on such things. Since when are they bad?
You media folks just LOVE to spread the doom and gloom. Most of you are probably too young and 'wet behind the ears' to ever remember bad economic times. Economic downturns happen, and they, too, pass, as will this one. This post, and the media in general this past year, is the perfect example of how Generation Y and the millenials have been raised to run away instead of facing adversity. We are raising a bunch of chickens who are afraid of their own shadows and sheep who follow anybody with any idea. At some point they will all have to wake up and stand on their own two feet, especially when they realize mommy and daddy's fortune is no longer there to support their lifestyles...
Hard work and diligence -- AKA Warren Buffett -- never go out of style. Whoever loses faith in Warren Buffett is a fool."
- Mike & Rita
"The principles followed by Buffett as taught by Benjamin Graham, value investing for the 'defensive' and 'enterprising' investor of which Buffett falls into the enterprising class, is what should be questioned, if indeed there is to be any questioning.
However, I have seen no reason yet to question these principle which have proved sound over time. Interestingly you never hear anyone calling these principles into question to the extent as they are currently when the market in on the up. So why suddenly do it now?
Calling Buffett’s practices into question is like saying that there is certainty that sound corporations will fail to be successful in the future. I don’t think that anyone can say that this is the case with any conviction. What is questionable (once again) is speculation. Once again speculation has burnt many, whereas sound investment strategies will over the long run continue to show return. It is a failure of people to understand the distinct differences between speculation and investing that results in this questioning. People fail to question the soundness of the decision making, if they did they would fine that most of their decision making is more speculative rather than based on solid value investing as taught by Graham and followed by Buffett."
- Gregg B., South Africa
"I had to wonder about Buffett when he supported Obama. Whether it was a strategy to boost his holdings or a bout of senility, I'm not sure but, I think Buffett will shine again soon. His top quality holdings combined with his impeccable character will reward the faithful."
- John T., Pennsylvania
"My wife and I have our life savings in Buffett’s stocks, both 'A' & 'B.' We believe in him and always will. He is the greatest investor of our time and all time. The faint of heart have no business in the stock market in the first place. I find it amusing that he is doubted by individuals that have no reputation as investors, only reporters looking for a way to create a 'story' so they can justify their pay check. I call that kind of reporting irresponsible and it adds fuel to the fire of fear and doubt that investors have and it only prolongs a recovery that will come."
- Butch V., Arizona
"Your 12/15/2008 post is evidence that Buffett's principles will always work. The column uses other similar columns (describing public fear in the markets) as though it's news, or evidence of a change in the economic climate itself. There is no news since Buffett's Op-ed, which by the way, precisely said he was not calling a bottom, to dictate the market's direction. The only news, in fact, isn't news either: people are still scared. Sounds like it's still time to be greedy."
- Eric C., Texas