Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
The S&P 500 appears ready to correct, and that is a good thing - 18th Sep 20
It’s Go Time for Gold Price! Next Stop $2,250 - 18th Sep 20
Forget AMD RDNA2 and Buy Nvidia RTX 3080 FE GPU's NOW Before Price - 18th Sep 20
Best Back to School / University Black Face Masks Quick and Easy from Amazon - 18th Sep 20
3 Types of Loans to Buy an Existing Business - 18th Sep 20
How to tell Budgie Gender, Male or Female Sex for Young and Mature Parakeets - 18th Sep 20
Fasten Your Seatbelts Stock Market Make Or Break – Big Trends Ahead - 17th Sep 20
Peak Financialism And Post-Capitalist Economics - 17th Sep 20
Challenges of Working from Home - 17th Sep 20
Sheffield Heading for Coronavirus Lockdown as Covid Deaths Pass 432 - 17th Sep 20
What Does this Valuable Gold Miners Indicator Say Now? - 16th Sep 20
President Trump and Crimes Against Humanity - 16th Sep 20
Slow Economic Recovery from CoronaVirus Unlikely to Impede Strong Demand for Metals - 16th Sep 20
Why the Knives Are Out for Trump’s Fed Critic Judy Shelton - 16th Sep 20
Operation Moonshot: Get Ready for Millions of New COVAIDS Positives in the UK! - 16th Sep 20
Stock Market Approaching Correction Objective - 15th Sep 20
Look at This Big Reminder of Stock Market Mania - 15th Sep 20
Three Key Principles for Successful Disruption Investors - 15th Sep 20
Billionaire Hedge Fund Manager Warns of 10% Inflation - 15th Sep 20
Gold Price Reaches $2,000 Amid Dollar Depreciation - 15th Sep 20
GLD, IAU Big Gold ETF Buying MIA - 14th Sep 20
Why Bill Gates Is Betting Millions on Synthetic Biology - 14th Sep 20
Stock Market SPY Expectations For The Rest Of September - 14th Sep 20
Gold Price Gann Angle Update - 14th Sep 20
Stock Market Recovery from the Sharp Correction Goes On - 14th Sep 20
Is this the End of Capitalism? - 13th Sep 20
The Silver Big Prize - 13th Sep 20
U.S. Shares Plunged. Is Gold Next? - 13th Sep 20
Why Are 7,500 Oil Barrels Floating on this London Lake? - 13th Sep 20
Sheffield 432 Covid-19 Deaths, Last City Centre Shop Before Next Lockdown - 13th Sep 20
Biden or Trump Will Keep The Money Spigots Open - 13th Sep 20
Gold And Silver Up, Down, Sideways, Up - 13th Sep 20
Does the Stock Market Really "See" the Future? - 12th Sept 20
Basel III and Gold, Silver and Platinum - 12th Sept 20
Tech Stocks FANG Index Nearing Critical Support – Could Breakout At Any Moment - 12th Sept 20
The Tech Stocks Quantum AI EXPLOSION is Coming! - 12th Sept 20
AMD Zen 3 Ryzen 4000 Questions Answered on Cores, Prices, Benchmarks and Threadripper Launch - 12th Sept 20
The Inflation Mega-trend is Going Hyper! - 11th Sep 20
Gold / Silver Ratio: Slowly I Toined… - 11th Sep 20
Stock Market Correction or Reversal? The Jury Isn't Out! - 11th Sep 20
Crude Oil – The Bearish Outlook Remains - 11th Sep 20
Crude Oil Breaks Lower – Sparking Fears Of Another Sub $30 Price Collapse - 11th Sep 20
Inflation by Fiat - 10th Sep 20
Unemployment Rate Drops. Will It Drag Gold Down? - 10th Sep 20
How Does The Global Economy Recover After This Global Pandemic? - 10th Sep 20
The Best Mobile Casino - 10th Sep 20
QE4EVER! - 9th Sep 20
AMD Ryzen Zen 3 4800x 10 Core 5ghz CPU, Cinebench Benchmark Scores (Est.) - 9th Sep 20
Stock Traders’ Dreams Come True – Big Technical Price Swings Pending on SP500 - 9th Sep 20
Should You Be Concerned About The Stock Market Big Downside Rotation? - 9th Sep 20
Options Traders Keep "Opting" for Even Higher Stock Market Prices - 8th Sep 20
Gold Stocks in Correction Mode - 8th Sep 20
The law of long-term time preference and Gold ownership - 8th Sep 20
Gold Bull Markets: History and Prospects Ahead - 8th Sep 20
Sheffield City Centre Coronavirus Shopping Opera Ahead of Second Covid-19 Peak - 8th Sep 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Is Buffett Right to Invest in Asia?

Stock-Markets / Investing 2009 Mar 03, 2009 - 05:37 AM GMT

By: Money_and_Markets

Stock-Markets Best Financial Markets Analysis ArticleTony Sagami writes: Warren Buffett knows a thing or two about investing. But what I really admire is that he always tells it exactly like it is … good or bad. Buffett really caught my attention a few days ago when he sent out his annual letter to the shareholders of Berkshire Hathaway, Buffett's insurance and investment holding company.

“The economy will be in shambles throughout 2009 — and, for that matter, probably well beyond,” warned Buffett.

Shambles? Well beyond? Those are very gloomy words. But Buffett has good reason to be so pessimistic … Berkshire Hathaway recently reported a staggering 96 percent drop in its fourth-quarter profits — the fifth quarter in a row of falling profits.

Warren Buffett didn't have good news for Berkshire Hathaway shareholders: Fourth quarter profits had tumbled 96 percent.
Warren Buffett didn't have good news for Berkshire Hathaway shareholders: Fourth quarter profits had plummeted 96 percent.

Business was bad across the board. But Berkshire Hathaway got particularly pounded by $4.61 billion of losses on 251 derivative contracts. The result: Berkshire Hathaway's stock tumbled 44 percent in the last 12 months.

No Shortage of Pessimism …

Buffett isn't the only big name who is worried about the economy. Guess who said this: “The economy is going to get worse before it gets better.”

It was President Obama on December 7, 2008.

I am in 100 percent agreement with Obama's assessment of our economy. However, his multi-trillion dollar solution to rejuvenate our economy will cost us a fortune! In fact, his recent budget proposal includes a $1.75 trillion deficit — the largest in history.

'The economy is going to get worse before it gets better.' -President Obama, December 7, 2008, on NBC's Meet the Press.
“The economy is going to get worse before it gets better.” -President Obama, December 7, 2008, on NBC's Meet the Press.

On top of that, he warned that we should expect similar deficits “for years to come.”

Unfortunately, that spend, spend, spend mentality is nothing new for our country. The politicians we elect and the got-to-have-it-today mentality of consumers is all about spending too much and saving too little.

I suspect that a lot of Buffett's pessimism is because of that spend-like-there's-no-tomorrow strategy. And despite his unflattering short-term performance, Buffett's long-term track record certainly proves that he is one of the best stock pickers the world has ever seen.

That's why you should …

Pay Careful Attention to What Buffett Says and What He Does

What Buffett says is that the U.S. economy is going to get worse, and what he is doing is investing in Asia. Here are two examples of where Buffett is putting money:

Buffett has increased Berkshire Hathaway's holdings in South Korea's third-largest steelmaker.
Buffett has increased Berkshire Hathaway's holdings in South Korea's third-largest steelmaker.

Arrow Berkshire Hathaway recently increased its holdings of South Korea-based Posco (PKX), Asia's third-largest steelmaker. Posco makes structural steel used in the construction of buildings, industrial pipes, and automobile chassis; and steel plates used in shipbuilding, structural steelwork, power generation, earth-moving equipment, and other industrial machinery.

Arrow Buffett also invested $230 million for a 10 percent stake in BYD Company (1211.HK), a Chinese company that makes electric cars. BYD makes 65 percent of the world's nickel-cadmium batteries and 30 percent of the world's lithium-ion mobile phone batteries.

Is Buffett right about Asia? Absolutely … on a long-term basis. But I still expect things to get worse over in Asia before they get better.

Moreover, a poll of nine, Chinese-managed mutual funds showed that Chinese portfolio managers do not expect a quick rebound in Chinese equities. On average, they expect the Shanghai Composite to be at 2,133 three months from now, which is about where it is now.

The managers reported that they had chopped their average weighting for stocks from 71.6 percent to 68.9 percent from the last poll. More importantly, seven of the nine portfolio managers said they expect to reduce their allocations even further next month.

Stay Patient and Prepare to Become an Aggressive Buyer …

The Asian markets have unfolded exactly as I told you they would in previous Money and Markets columns. And if you have followed my suggestions, you've avoided a lot of pain and have a good-sized pile of cash to put to work when the market does bottom.

That bottom isn't far away though. So the best thing to do is to stay patient and prepare to become an aggressive buyer.

For now, consider sticking to short-term Treasuries or Treasury-only money funds like the U.S. Global Government Securities Savings Fund (800-873-8637) or the Weiss Treasury Only Money Fund (800-242-8092). Also, you might consider subscribing to my Asia Stock Alert newsletter so you'll know exactly when I think it's time to jump back in.

Best wishes,


P.S. As a regular reader of Money and Markets , I'd like to tell you about our new, specialized, free publication, Global Wealth Report , which launched yesterday. This daily newsletter focuses on the precious metals, natural resources, Asian and South American markets and more. The best part? A subscription to Global Wealth Report won't cost you one red cent!

Just click here to subscribe.

This investment news is brought to you by Money and Markets . Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit .

Money and Markets Archive

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules