Invest It Like Buffett
by Chris Rowe 10/21/08
"Be fearful when others are greedy, and be greedy when others are fearful."
This is just one of many brilliant investing principles from the distinguished investor, Warren Buffet ... the man who consistently flip-flops between No.1 and No.2 on the Forbes 400 list.
If you read the article by Buffett from the New York Times on Oct. 16, you would have read that he is not just a buyer of American stocks but also that "if prices keep looking this attractive" his "non-Berkshire Hathaway net worth will soon be 100% in United States equities."
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WOW! What a huge statement from such a huge investor!
Most individual investors who have been scared out of their wits in the last 12 months -- especially since September -- are asking how they should play the market when an article like that is written by a man who's considered to be the most successful investor in history.
On one hand, every expert (including Buffett) seems to agree that the economy will likely get worse before it gets better. On the other hand, when markets have been at their lowest points, historically, have been when economic sentiment has been at its absolute gloomiest!
So today I'll talk about how to make sense of these mixed signals and, more importantly, how to profit from them.
Do You Know What You're Doing?
First, you should understand that most investors who go into the market thinking they have a long-term outlook, really don't have a long-term outlook.
Most buy stocks, "for the long-term," but if they go up, they sell them too quickly to "lock in a profit" and when stocks go down, they hold on to them thinking they will come back. Those stocks typically don't get sold until they are down so far that it's sickening to look at them any longer. That's why most individual investors buy near the high and sell near the bottom.
Warren Buffett tends to do the opposite.
So, why can't you invest like Warren Buffett?
