Dow 100,000, people have learned their lesson in 2008 meltdown, stocks will not drop 50% from the current levels, unicorn farm is opening up on the moon, etc…..Whatever you say Mr. Buffett.
Actually, I agree with him on two issues. No matter how much the Perma Bears huff and puff, the stock market will not decline over 50% in the upcoming Bear Market of 2014-2017. Our mathematical and timing work confirms the same. Sorry, Elliot Wave followers. The market is not going down 95%. I also agree that we will see DOW 100,000 right before the BIG WAR starts. Most of the gains will be from inflation thou.
I do take issue with Mr. Buffett when he states that “people have learned their lesson from the 2008”. I disagree, not when the Federal Government comes in and bails everyone out. In fact, current economic environment is continuation of insane macroeconomic policies that FED has implemented. The balance sheet is massively leveraged and our existing economy depends entirely on cheap credit and speculation. No doubt, Buffett understands this very clearly. He just can’t say it.
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Warren Buffett Is Losing It Google
Warren Buffett told CNBC on Friday he would be “surprised a lot” if stock prices around the world fell 50 percent from their current levels.
“Humans will behave in crazy ways, both on the upside and the downside in the next 50 years. It’s very unlikely they do it in the next few years because after something like 2008, once they get out of the emergency room, they’re a little more careful for awhile.”
During an appearance on CNBC’s “ Squawk Box ,” Buffett told 58-year-old host Joe Kernen that he will live to see the Dow at 100,000. “I won’t, but you will,” the 83-year-old Berkshire Hathaway (BRK-A) chairman said.
Buffett pointed out that Berkshire stock has dropped 50 percent four times in its history, but always recovered.
While he now thinks his characterization of the 2008 crisis as an “economic Pearl Harbor” now looks understated, the U.S. did recover and he believes “this country will come through anything.”
Buffett said he’s been bullish on the U.S. economy since the fall of 2008, but he doesn’t expect it to rapidly accelerate this year. Instead, he thinks it will continue its slow upward trajectory.
Buffett said he’d advise people to “stay away” from bitcoinbecause the cryptocurrency is a “mirage” without any intrinsic value, although it’s an efficient way to transfer dollars.
Buffett also said Berkshire Hathaway has “almost” eliminated its catastrophe insurance in the U.S. because rates have dropped too much.
“The rates came down dramatically, and we do not regard the exposure as having come down dramatically,” Buffett said.
Berkshire is still writing policies in Asia.
Asked about the controversy over faulty ignition switches in General Motors (GM) cars, Buffett said CEO Mary Barra has a “new chance” because she just started in the post but the company needs to tell the truth and act quickly to fix any problems.
He said his advice is to “Get it right, get it fast, get it out, get it over, but get it right first.”
Buffett appeared on CNBC with Dan Gilbert to promote their “Quicken Loans Billion Dollar Bracket Challenge with Yahoo Sports” in which anyone who correctly predicts the outcome of every game in the NCAA basketball tournament will win $1 billion.