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IBDvalueinvestin (99.68)

Warren may be too old and out of touch these days.

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September 13, 2010 – Comments (18) | RELATED TICKERS: BRK-B , BRK-A

How can he make such a blanket statement is beyond me??? Unless he is trying to pump his company thru an article that certainly remind people that his BRK.B, BRK.A shares are still trading.

 

Buffett Rules Out Double-Dip Recession Amid Growth

 

 

Andrew Frye and Kelly Bit, On Monday September 13, 2010, 1:14 pm

Warren Buffett ruled out a second recession in the U.S. and said businesses owned by his Berkshire Hathaway Inc. are growing.

“I am a huge bull on this country,” Buffett, Berkshire’s chief executive officer, said today in remarks to the Montana Economic Development Summit. “We will not have a double-dip recession at all. I see our businesses coming back almost across the board.”

Berkshire bought railroad Burlington Northern Santa Fe Corp. for $27 billion in February in a deal that Buffett, 80, called a bet on the U.S. economy. The billionaire’s outlook contrasts with the views of economists such as New York University Professor Nouriel Roubini and Harvard University Professor Martin Feldstein, who have said the odds of another recession may be one in three or higher.

“I’ve seen sentiment turn sour in the last three months or so, generally in the media,” Buffett said. “I don’t see that in our businesses. I see we’re employing more people than a month ago, two months ago.”

The world’s largest economy grew at a 1.6 percent annual pace in the second quarter, exceeding the median forecast of economists surveyed by Bloomberg News, revised figures from the Commerce Department showed on Aug. 27. U.S. economic growth will slow to 2.5 percent next year from a projected 2.7 percent this year as unemployment above 9 percent tempers consumer spending, according to the median forecast of economists surveyed by Bloomberg News this month.

‘Signs of Life’

Buffett built Omaha, Nebraska-based Berkshire into a $200 billion provider of insurance, energy and luxury goods and services over four decades. The company cut about 20,000 jobs last year as demand for its products declined.

The economy is still recovering and isn’t likely to slip back into recession as “signs of life” appear in the U.S., Bank of America Corp. CEO Brian Moynihan said today at an investor conference.

Buffett, who spoke via video connection to an assembly in Butte, Montana, said U.S. banks were ready to boost lending and encouraged entrepreneurs to seek financing for their business ideas. Berkshire is the biggest shareholder of Wells Fargo & Co., the top U.S. home lender.

‘Night and Day’

“It’s night and day from a year, year and a half ago,” Buffett said. “I know Wells Fargo, they would love to have $50 billion more of loans now. Go in and talk to the banker.”

Buffett amassed the world’s third-biggest personal fortune through decades of stock picks and takeovers. Berkshire’s stake in San Francisco-based Wells Fargo was valued at about $8.2 billion at the end of June. Buffett’s firm also owns $5 billion of preferred stock in Goldman Sachs Group Inc. and more than $1.5 billion of shares in U.S. Bancorp, according to data compiled by Bloomberg.

Berkshire gained $395, or 0.3 percent, to $124,372 at 12:48 p.m. in New York Stock Exchange composite trading. The stock has climbed about 25 percent this year, compared with a decline of 2.5 percent for Wells Fargo and a 9 percent drop for Goldman Sachs.

To contact the reporter on this story: Andrew Frye in New York at afrye@bloomberg.net; Kelly Bit in New York at kbit@bloomberg.net.

 

18 Comments – Post Your Own

#1) On September 13, 2010 at 2:29 PM, chk999 (99.97) wrote:

Buffett gets reports from the operating businesses all the time. I think he has a very good finger on the pulse of business.

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#2) On September 13, 2010 at 2:37 PM, IBDvalueinvestin (99.68) wrote:

He does not own a piece of every sector, so I doubt he knows the full spectrum, just the part he owns.

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#3) On September 13, 2010 at 2:38 PM, RonChapmanJr (94.18) wrote:

In one article I read it quoted him as saying "the economy will come back better than ever".  Everybody peaks in whatever career path they chose during their life.  I am positive that Buffett hit his a while back. 

I would love to ask him what he thinks about peak oil/energy if he is such a bull on this country.

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#4) On September 13, 2010 at 2:41 PM, RonChapmanJr (94.18) wrote:

A good article about this new and stupid Buffett on Zerohedge -

http://www.zerohedge.com/article/there-was-time-when-buffett-lamented-plunging-dollar-blasted-trade-deficit-and-squandering-a

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#5) On September 13, 2010 at 3:55 PM, IBDvalueinvestin (99.68) wrote:

Good points Ron

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#6) On September 13, 2010 at 4:04 PM, miteycasey (31.38) wrote:

He does not own a piece of every sector, so I doubt he knows the full spectrum, just the part he owns.

Umm...what part does he not own a piece? I guess he dosn't have intrest in guinea fowl.

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#7) On September 13, 2010 at 4:07 PM, Melaschasm (55.11) wrote:

Buffet has insider information from his companies that provides some great data about the direction of the country.  Railroads ship much of the junk americans buy, banks have become integrated with a big chunk of the economy including housing, and he has a variety of other businesses that provide good data.

For the past year I have been debating:  double dip or stagflation?  Maybe Buffet has figured out the answer.

Technically Buffet should have said a double dip is very unlikely, since there is always a chance of an unforseen shock to the system.  It is also possible that Buffet is wrong, but with his insider information, he is probably right.

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#8) On September 13, 2010 at 4:13 PM, TMFHousel (91.80) wrote:

"Everybody peaks in whatever career path they chose during their life.  I am positive that Buffett hit his a while back. "

Fair point. Although this is exactly word for word what people said about him 10 years ago when he was skeptical of dot-com stocks. Going against the crowd draws criticism, even when you're Buffett. The fact is, he's usually right, and the crowd is usually wrong.  

 

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#9) On September 13, 2010 at 4:27 PM, eldemonio (98.92) wrote:

Más sabe el diablo por viejo que por diablo.

Don't write this old ass bastard off just yet.

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#10) On September 13, 2010 at 4:39 PM, chk999 (99.97) wrote:

mm...what part does he not own a piece? I guess he dosn't have intrest in guinea fowl.

Doesn't that Texas brick company he owns have a Guinea fowl subsidiary? 

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#11) On September 13, 2010 at 6:53 PM, QualityPicks (62.95) wrote:

I have to agree with Buffet. There is nothing to worry about right now in the relative short term. Governments around the world are all in the same page. They will avoid any major defaults and spend recklessly, at all costs to support the economy.

Have fun and invest while you can. The government is paying for this reflationary/recovery period and they have no intention of stopping. What are you afraid of? that the government will stop spending/intervening and let free market forces work themselves out? US Government can't default at this point, their debt is still in US dollars, all of it. All they have to do is print more money (dilute the money). Markets and maybe governments like China's can pressure for this to change, but they haven't, so no reason to worry yet.

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#12) On September 13, 2010 at 7:06 PM, starbucks4ever (97.36) wrote:

Buffett has made lots of mistakes recently, but during the last 6 months he's been getting smarter and smarter.

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#13) On September 13, 2010 at 7:25 PM, truthisntstupid (87.24) wrote:

An investing icon whose company owns dozens of companies outright is clueless about what's happening with the economy. Got it.

 

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#14) On September 13, 2010 at 7:51 PM, Momentum21 (93.61) wrote:

IBD - his "blanket statement" is worth as much as anyone else's I would say. Can't you give someone with a pretty good track record that at least?

RodChapman - is zerohedge the authority on morality in the business world these days? awfully easy for an anonymous blogger to find hypocrisy in anything he/she wants since his/her track record can't be questioned...other than the fact that most of his/her followers are mostly likely broke from shorting the market since march of 2009.  

Warren is on the front lines and we are spectators in this game. The game might very well be "unfair" but you don't have to play, right?

There are no certainties, just probabilities and I think Warren is at least above average in calling those.

Here are his views on oil...he might agree with you: 

http://www.youtube.com/watch?v=GWn4OVMwc4s 

-2 recs for your comments though... : )

 

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#15) On September 13, 2010 at 8:11 PM, ETFsRule (99.94) wrote:

"How can he make such a blanket statement is beyond me???"

If it were that easy to understand, we would all be billionaires.

He's Warren Buffet... and we're not.

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#16) On September 14, 2010 at 10:35 AM, IBDvalueinvestin (99.68) wrote:

If advertising at DGIT picks up in the fall ahead of Christmas then that will be the real proof that business is picking up. Companies don't advertise when business is slow. Thats why advertisers fell off a cliff From May to August,

See what happened to :

DGIT, GCI, NYT, etc etc.

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#17) On September 14, 2010 at 10:51 AM, IBDvalueinvestin (99.68) wrote:

Does Warren own an advertising company? Not that I know of , so he can't know all business activity. Like I said in last post, advertisers fell off a Cliff from May to August.

Advertisers are the true signs of businesses growing businesses because to grow you need to spend on advertising and if Warren is correct that business is picking up on all sectors then advertisers like DGIT, GCI, and NYT will see a major pickup in business this fall and should rebound in a major way.

Thats only if Warren is telling the truth and not stretching the truth.

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#18) On September 14, 2010 at 2:00 PM, Momentum21 (93.61) wrote:

My business is advertising and while we are definitely seeing improvements in that business it is typically a lagging indicator. 

I recently bought NYT stock because I firmly believe we have seen lows in high quality media companies with trusted brands. 

Once cuts have been made spending to grow revenue will return...with caution of course but it will return.  

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