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I don't always believe how old men think about investing



By Dian Vujovich

Warren Buffett is considered one of America’s premier investing masters. From his down-home folksy ways and unpretentious Omaha life style, his money-speak has won over the hearts of thousands of investors tired of and worn out by the often difficult to understand investing advice from The Suits on Wall Street. Buffet, in many ways, is like an old breath of fresh air.

Now don’t jump on me as if I’m showing some age prejudice. I’m not. I’m old, too. But not yet as old as the Oracle. More importantly, I think that everyone can learn plenty from people of age and experience no matter their gender or area of expertise.

But like all who watch and try to learn from what they see, I’ve noticed that there’s danger when crowds of people jump on the bandwagon of one person’s words within the financial arena. Becoming a fan of someone simply because they’ve been a successful investor seems to always come back to bite them and/or their audience. The worst example recently, Mr. Madoff. He’s an old guy. People respected his age, considered his experience as noteworthy and more than anything loved what they mistaken thought was his ability to make them money. In the end, he was screwing them all the way to the bank and his jail cell.

Buffett, of course, is the complete opposite of Madoff and in no way similar in investing acumen. I want to make that clear. But that doesn’t mean he is always correct in his investing advice, thinking or even company picks. While Berkshire Hathaway has made its investors more money than most of us can imagine. (FYI, currently shares of its common stock—BRK-A– are selling for around $114,569 per share. The 52-week range has been $84,600 to $$140,711.) Part of his investment philosophy, in addition to doing solid research, is to buy and hold forever.

That never sell point of view is fine if your ultimate investing goal is accumulation for accumulation’s sake. People who don’t need money probably do that more than those of us who are investing to one day sell and then use those proceeds.

So, as you’ve probably figured out by now, I’m not in agreement with Buffett and his opinion that there was no wrongdoing by Goldman Sachs with regard to the SEC allegations about Fabulous Fab’s product creation and salesmanship. There was something wrong.

As for Goldman Sachs as an investment pick goes, well, that’s another story. Before Buffett’s stand-by-the-company-and-its-CEO announcement, keep in mind that Berkshire Hathaway owns about 5 billion dollars worth of Goldman Sachs’ (GS) preferred stock, according to an online New York Times story. At about $150 a share, Goldman Sachs pays shareholders a small dividend and according to some, looks like an attractive buy because of its strong global performance. Over the past 52 weeks the stock’s price range was from about $128 per share to $193.

On the other hand, because of the concerns about possible fallout from the SECs civil fraud case against Goldman, Fitch’s Ratings Service announced today that they lowered their long-term view of Goldman’s debt ratings from stable to negative.

I’m thinking Fitch might have a point.


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