Buffett was overly optimistic in 1999

[SmallCap]

How many of you remember this article that came out in Nov of 1999

 

http://www.jeffreyluke.com/Financial/Mr_Buffett_on_the_Stock_Market.html

 

I very clearly remember where I was as I read it for the first time and I have read it a few times since. I believe this article was also used in the intro to Snowball or something like it.

 

I still find it interesting and instructive to go back and read this article.

 

It has been interesting to see what has happened in the market even with interest rates dropping down to nothing. using the calculations that he gives here how optimistic are you for the next say 5-7 years in the general US market?

 

SmallCap

[SmallCap]

Someone else posted this article about Bill Gross in the general forum but as I was reading it I saw an interesting correlation to the article by Buffett above. Here is the quote out of the article that I found interesting.

 

The three-decade rally in bonds, the very securities that made Gross famous, will eventually fizzle out, according to Pimco’s outlook. Gross says the rally will come to an end as nations sell record amounts of debt to fund their deficits, spurring a return of inflation and rising interest rates.

 

Bonds Best Days

 

“Bonds have seen their best days,” says Gross, who anticipates returns of 4 percent to 5 percent in the new normal.

 

The king of bonds is now talking up stocks as a better long-term investment. He says that as U.S. Treasury returns fall, investors will have to take more risk with high-yield bonds, equities and, eventually, real estate.

 

here is the entire article again

 

http://www.bloomberg.com/news/2010-06-24/gross-vows-this-time-different-with-el-erian-leading-push-in-global-stocks.html

 

Cheers

SmallCap

[beerbaron]

I remember this speech. I think it's one of the best speech ever by Buffett, he was really trying to put some sense in the stock market.

 

BeerBaron

[jb85]

here is a good chart that shows buffetts correlation between the 1964-82 time period and the 1999-2018 time period

 

http://home.earthlink.net/~intelligentbear/com-dj-infl.htm