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Buffett's Unwavering Optimism in U.S. Economic Recovery


Parsad
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Putting his words into action, Buffett made a number of investments which, at the time, were viewed as wildly risky. In the months and years following, however, his decision to step in and save Goldman Sachs, take a chance on General Electric and go "all-in" on Burlington Northern Santa Fe Railroad, have only helped him further grow his already massive wealth.

 

 

This is hogwash.  Those preferred deals were never seen as risky at the time.  In fact, it was wildly accepted on Wall Street that Buffett got an amazing deal that any fund would have gladly taken if given the opportunity, especially on the Goldman purchase.

 

 

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I would also argue that he was a partial insider. He knew treasury was working on a plan to save the financial system from collapse.  Henry even asked him what rate the TARP preferred injection used and Buffet indicated a lower rate.

 

 

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Guest ValueCarl

I am surprised the board didn't see the hook in this article! I am afraid some have been gaffed! When I read it pre-market, and got to the conclusion, I saw the misplaced bias being applied!  It's in the last paragraph and represents an oxymoron to what Mr. Buffett endorses, versus the GOLD BUGS who see a world filled with shiny metals as opposed to "cash generating" businesses. If you read it more casually, you might even think it was Mr. Buffett recommending the ETF with precious metals in it.  ;)

 

Yeah, I know, he's attempting to temper one's use of the precious metal, but it's a pump for investing in it all the same, while using Buffett's name to endorse it.  

 

Aside from this quality, Buffett's portfolio is also notable for its exposure to reputable dividend-paying names. The consistent income paid out by these firms will provide a welcomed cushion of protection in the event of a market upheaval.

 

Given Buffett's investing preferences and current portfolio, it is clear that he is sticking to a cautiously optimistic approach to the marketplace. Such a mindset, I feel, is ideal given the current market climate. A good strategy for ETF investors looking to mimic the Oracle would be to pair broad-based equity funds like iShares Dow Jones Select Dividend Index Fund with defensive assets like gold. I have long relied on iShares Gold Trust for bullion exposure.

This is not to say that sector-, and industry-focused products are off limits. On the contrary, by maintaining small, controlled exposure to strong corners of the marketplace, it is possible to add to a portfolio's potential upside. The key words, however, are "small," and, "controlled." Be lie Buffett: avoid getting carried away.

 

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