Buffett Says `Pain Will Be Felt for a Long Time' Amid Recovery

[MNeagle]

http://www.bloomberg.com/apps/data?pid=avimage&iid=illNLvWCiWEM
Billionaire chairman of Berkshire Hathaway Warren Buffett said, “The worst is behind us, but the pain will be felt for a long time from what happened.” Photographer: Daniel Acker/Bloomberg



Warren Buffett, the billionaire chairman of Berkshire Hathaway Inc., said the effects of the financial crisis and the recession will be felt “for a long time” as the economy recovers.

“The worst is behind us, but the pain will be felt for a long time from what happened,” Buffett said in previously recorded remarks shown today at a conference at Airport City outside Tel Aviv. “We’re inching forward, we’re not galloping forward.”

U.S. economic growth has slowed this year as a lack of jobs curbed consumer spending. The unemployment rate remained at 9.6 percent in September, near a 26-year high of 10.1 percent last October. Buffett, 80, said last month that he was “a huge bull” on the U.S. and reiterated that Omaha, Nebraska-based Berkshire was hiring.

The worst U.S. recession since the Great Depression ended in June 2009, the National Bureau of Economic Research said on Sept. 20. A recent slowdown raises the possibility of another slump. Economic growth decelerated to an annualized 1.7 percent rate in the second quarter from 3.7 percent in the first and 5 percent in the last three months of 2009, according to the Commerce Department.

Buffett’s Views

Buffett’s pronouncements on the economy are watched by policy makers and investors. Buffett, the world’s third-richest person, oversees more than 200,000 Berkshire employees who work for units selling insurance, building supplies and consumer goods. He was in China last month to visit carmaker BYD Co., where Berkshire has holdings valued at more than $1 billion. He’ll travel to Japan and India in the next year to seek possible investments.

Buffett built Berkshire into a $200 billion company through four decades of stock picks and takeovers. The billionaire investor, also Berkshire’s chief executive officer and biggest shareholder, bought Israeli toolmaker Iscar Metalworking Cos. in 2006 in his largest acquisition of a non-U.S. firm. Buffett plans to travel to Japan and India in the next year in search of opportunities.

Buffett told shareholders in February 2009 that “America’s best days lie ahead” even though he wrote that the economy would be “in shambles” for the remainder of the year. Berkshire cut about 20,000 jobs in 2009, and profits advanced in the second half of that year. In November, the company said, “the credit crisis has abated.”

Buffett predicted on May 2 that unemployment would decrease.

http://www.bloomberg.com/news/2010-10-12/buffett-says-pain-will-be-felt-for-a-long-time-amid-recovery.html

[Ponce]

"Amid Recovery?"............what recovery.........recovering with what?.........before we can have a recovery we must get rid of the government, and even then it would take three or four generations to recover.....if ever.

[Twisted Titan]

Anybody remeber this pricless Gem from Mr Buffet???



http://www.nytimes.com/2008/10/17/opinion/17buffett.html

THE financial world is a mess, both in the United States and abroad. Its problems, moreover, have been leaking into the general economy, and the leaks are now turning into a gusher. In the near term, unemployment will rise, business activity will falter and headlines will continue to be scary.

So ... I’ve been buying American stocks. This is my personal account I’m talking about, in which I previously owned nothing but United States government bonds. (This description leaves aside my Berkshire Hathaway holdings, which are all committed to philanthropy.) If prices keep looking attractive, my non-Berkshire net worth will soon be 100 percent in United States equities.

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. To be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions. But fears regarding the long-term prosperity of the nation’s many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now.

Let me be clear on one point: I can’t predict the short-term movements of the stock market. I haven’t the faintest idea as to whether stocks will be higher or lower a month — or a year — from now. What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up. So if you wait for the robins, spring will be over.

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.

Over the long term, the stock market news will be good. In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.

You might think it would have been impossible for an investor to lose money during a century marked by such an extraordinary gain. But some investors did. The hapless ones bought stocks only when they felt comfort in doing so and then proceeded to sell when the headlines made them queasy.

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. Indeed, the policies that government will follow in its efforts to alleviate the current crisis will probably prove inflationary and therefore accelerate declines in the real value of cash accounts.

Equities will almost certainly outperform cash over the next decade, probably by a substantial degree. 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.”

I don’t like to opine on the stock market, and again I emphasize that I have no idea what the market will do in the short term. Nevertheless, I’ll follow the lead of a restaurant that opened in an empty bank building and then advertised: “Put your mouth where your money was.” Today my money and my mouth both say equities.

Warren E. Buffett is the chief executive of Berkshire Hathaway, a diversified holding company.

[Gaillo]

What a hypocrite... you can BET Buffet is feeling no "pain"! >:(

[Filthy Keynes]

Warren Buffet is a little Miss Muffet Fascist.