September 17, 2009
– Comments (5) |
RELATED TICKERS: BRK-B
It's over -- according the world's most successful investor. Yesterday, Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B) CEO Warren Buffett effectively called the end of the U.S. recession... [more]
No he didn't! He said he was buying.
Warren makes a point of not trying to figure out the bottom and just buys value. Just like in the past, he's concentrating on companies and not the market.
I suggest you read the transcript of Buffett's remarks.
BECKY: And then finally, if-- if you had to-- give a gauge of where you stand on the economy again right now-- versus what you were thinking three months ago, is it the same? Is it better?
BUFFETT: It-- it hasn't gotten worse. It hasn't gotten much better either. But the very fact that time is passing, it's-- it's gotten better in residential real estate. That’s important. Certain things haven't hit much yet. Commercial real estate, for example. But we are moving through a recession. And-- and-- and I see nothing that makes me worry about the fact that it's going to be worse than I would have thought three months ago.
Sorry Alex, but I don't see it. He talks of plateaus and and he doesn't think there will be a double dip recession, but I haven't heard any references of "being a teen-age boy in a whore-house"
He mentions that certain things like Commercial real-estate haven't hit yet.
Overall he was pretty non-commital. i wouldn't start buying rounds of drinks at the bar yet.
I agree with ChrisGraley - he never explicitly says the recession is over. He says more along the lines that things won't get much worse and that we are "moving through a recession". He gives big Ben lots of congratulations for averting economic disaster - which I agree with.
There is an interesting note that he likes freight car loading and truck tonnage as an economic indicator.. I haven't looked at that much before.
Here is the rail: http://railfax.transmatch.com/
Both 2009 and 2008 have y/y decreases in transport in every quarter. However, the Q3 of 2009 is now showing total transportation amounts increasing. We've got a ways to go before we'd even be back to 2008 levels. The first quarter 2009 had the lowest levels (tracking with the market low, and subsequent rise).
The truck tonnage index isn't a free access information, but others have covered the last month reported: http://www.calculatedriskblog.com/2009/08/truck-tonnage-index-increased-21.html
The index may have bottomed, but its hard to say that still.
Both of those economic indicators seem like coincident or possibly 1-month lagging indicators (for trucking). But, they're interesting too. I like collecting macroeconomic indicators... :) - I don't think either is a very convincing marker of the recession's end yet.
Buffett doesn't say explicitly that the recession has ended; furthermore, he qualifies his statement regarding the economy having plateaued.
Still, I'm not reading more into his words than is there: officially, "recessions start at the peak of the business cycle and end at the trough" (per the NBER) and Buffett indicates in the CNBC interview that he believes we have reached the trough. By definition, his statements imply that the recession is over. However, they certainly don't imply that Buffett believes in a robust recovery or that all problems are behind us.