Warren Buffet: Now Is the Time to Buy American Stocks

Warren Buffett says now is the time to buy American stocks:

Buffett, at times the nation's richest man (back and forth with Bill Gates of Microsoft) says prices are low and a better value than holding cash or cash equivalents. He says the stock market will go back up...maybe not in a month, but in the next 5 or 10 years.

Buffett said:

"THE financial world is a mess, both in the United States and abroad. Its problems, moreover, have been leaking into the general economy, and the leaks are now turning into a gusher. In the near term, unemployment will rise, business activity will falter and headlines will continue to be scary.

So ... I’ve been buying American stocks. This is my personal account I’m talking about, in which I previously owned nothing but United States government bonds. (This description leaves aside my Berkshire Hathaway holdings, which are all committed to philanthropy.) If prices keep looking attractive, my non-Berkshire net worth will soon be 100 percent in United States equities.

Why?

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."

Read the rest here.

Gold Up Unemployment at 6.1%

Developing...CNN reports that Gold is up at the opening of the market and that the job report shows that we had a net job loss for the 8th straight month. Unemployment is at 6.1%

I'm not happy about this, but remember that it's always darkest before the light. Perhaps we are getting to the bottom and things will turn up in the next quarter.

Euro Stocks Dive Toward New Lows

PARIS: Equity markets dropped sharply in Asia and Europe on Friday, as investors fretted about the global economic outlook and positioned themselves for a test of the lows for the year on many indexes....[full story]

This may not be the worst of news. In the stock cycle, September is usually the worst month in returns with October recording the worst one day drops. So we are right on schedule.

But late October to Christmas or mid January is usually great growth. But for there to be a great upside, there needs to be a good drop in September. So in conjunction with your stock advisor, you need to decide whether to move all to cash and wait to buy until the uptick or sell options to cover your present position.

So happy trading...and do not depend on my stock advice.