"Where have all the good men gone
And where are all the gods?
Where's the street-wise Hercules
To fight the rising odds?"
—Bonnie Tyler, "I Need a Hero"
Finally. Warren Buffett: Oracle of Omaha and (Wall) Street-wise Hercules fills the void.
Buffett writes an editorial in today's New York Times that's packed with the common sense so characteristic of Berkshire Hathaway's annual reports. More important, Buffett proves to have the sound mind and singularity of thought that's been so lacking among Wall Street's leaders. May our spinning heads rest for a moment.
Buffett is buying U.S. stocks, so much that his personal (non-Berkshire) account—which was once all bonds—may soon be all equities. "Why?" Buffett asks, then answers:
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.
"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," Buffett writes.
Unfortunately, Buffett warns that unemployment will edge higher—as most economists also expect. But consider following his advice at work:
See opportunity when others shrink away.
Crisis lets you show off your skills on an emptying stage. You'll get more of the spotlight.