The Real Warren Buffett - 巴菲特每周新闻专贴

atcoolman

来篇中文的吧，对理解最近暴露的巴老WMD - 大规模杀伤性武器（金融衍生品）可能有所帮助。

---

股神不能说的秘密

作者：英国《金融时报》专栏作家约翰?加普(John Gapper) 2008-12-01

迈克尔•金斯利(Michael Kinsley)曾将“政治乌龙”定义为“政治家讲了真话”并因此感到难为情。按照这一定义，沃伦•巴菲特(Warren Buffett)押注350亿美元股市看跌期权的交易就是一起金融乌龙。

从表面上看，巴菲特的策略既不明智，也不符合他的特点。他控股下的伯克希尔哈撒韦(Berkshire Hathaway)最近股价重挫（现已回升），原因是该公司在衍生品合约方面产生了约50亿美元的账面损失。

事实上，一位不经意的观察人士可能会犯嘀咕：一度指责衍生品是“金融大规模杀伤性武器”的巴菲特，当他押注标普500指数等四大股指在2019至2027年期间不会低于现行水平（指合约签订时的水平，译者注）时，到底想搞什么名堂。

在2006年致投资者的信中，巴菲特自己承认了这一点。他写道，此种交易“也许看上去很奇怪……你也许觉得奇怪，我们为什么要涉足这种可能出问题的东西？”

我们所了解和崇拜的伯克希尔哈撒韦是一个朴实友善的地方，巴菲特通过这家公司友好地敲定收购大型、优秀美国企业的协议，这些企业从事的业务我们全都了解，包括生产口香糖、运营百货店，以及为家庭供电供暖等，而巴菲特对经营者的诚实品质赞不绝口。

但自从1967年首次收购一家保险公司以来，销售期权实际上正是巴菲特为伯克希尔哈撒韦筹集运营资金的典型方式。他的业务模式就是为承担未来损失风险而收取费用，即保险费或期权费。巴菲特利用这些资金去收购可口可乐(Coca-Cola)和箭牌(Wrigley)等公司的股票或整家公司。

伯克希尔哈撒韦的每一个投资者都承担着一份小小的风险，一旦有朝一日巴菲特在一桩此类押注上失算，所引发的灾难性损失将把公司压垮。这种情况迄今没有发生过，但另一家美国保险集团美国国际集团(AIG)也是直到两个月前，才需要援救的。

这就是伯克希尔哈撒韦的信用违约互换(CDS)交易价格高企的原因，因为银行和投资者已习惯这家公司有可能会破产的想法。而直至不久前，这种情况还是不可想象的。该公司并无倒闭征兆，但这种想法也不完全是无稽之谈。

在巴菲特传记《雪球》(The Snowball)中，艾丽丝•施罗德(Alice Schroeder)写道，在1967年收购内布拉斯加州保险集团国民保险公司(National Indemnity)，以将伯克希尔哈撒韦的业务拓展至纺织业以外时，“巴菲特已摸索出一种全新的经营方式。如果国民保险公司赚了钱，他就可以拿那些利润去买其它企业和股票。”

此后，伯克希尔哈撒韦的资金基础稳步扩大。如今它旗下有Geico汽车保险公司和通用再保险公司(General Re)，承受风险最大的则是B-H再保险(B-H Reinsurance)??用巴菲特的话说，B-H业务覆盖着“没有其它再保险商愿意或能够承受的巨大风险”，比如飓风和地震。

巴菲特自己押注的股票期权属于保险类筹资。他得到45亿美元保费，承诺赔付其他投资者的损失??如果在2019至2027年期间，股指跌破签署合约时的水平。

这45亿美元类似于保险保费或浮存金。伯克希尔哈撒韦可用这笔钱进行再投资，最后再来看必须赔付多少。目前，该公司浮存金总额庞大??从1967年的1850万美元增至去年的580亿美元，使其得以进行如今年9月买入高盛(Goldman Sachs) 50亿美元优先股的交易。

巴菲特曾在几封致股东的信中写道：“浮存金妙不可言??如果它不是以高价获得的话。”他的意思是，只要不发生持续的承保损失，伯克希尔哈撒韦就能运转良好，因为浮存金随着时间而增长，为其它业务提供资金。

到目前为止，伯克希尔哈撒韦在承保标准和潜在损失估算方面都做得很好。在2004年的信中，巴菲特估计，如果一场灾难导致1000亿美元损失，伯克希尔哈撒韦所受的损失将占到“大概3%至5%”。次年卡特里娜飓风来袭，给伯克希尔哈撒韦造成了34亿美元的损失。

他的期权很可能也将赚钱。在历史性的严峻时期，上述账面浮亏仅略多于保费（此处不计现金的投资收益），而且，在接下来11年内不会发生实际现金损失。

这引发了一个问题：作为保险商，巴菲特有阿吉特•贾殷(Ajit Jain)精明吗？后者为他管理灾难再保险业务。伯克希尔哈撒韦在一场自然灾害上损失了34亿美元，而巴菲特将因金融动荡遭受更大损失。

这也说明伯克希尔哈撒韦存在发生“黑天鹅亏损”(black swan loss)的弱点，近期形形色色的机构都受到此类亏损的打击。巴菲特为他认为发生概率不大的事件提供保险，这种做法正是《黑天鹅》一书作者纳西姆?尼古拉斯?塔勒布(Nassim Nicholas Taleb)所批评的交易策略。

但这绝不意味着我们不应再相信巴菲特??最近市场上似乎一度表现出这种态度。巴菲特从未隐瞒获得浮存金所蕴含的风险；事实上，他在致股东信中特意解释了这一点。

巴菲特正承受巨大的金融风险，对此我们不应感到震惊。他一直以来就在冒险，而几十年来他已证明自己对此非常擅长。

因此，只要现年78岁的巴菲特仍然执掌，我信任伯克希尔哈撒韦。唯一让我担心的是：他老人家的失效日期，可能比那些期权更早。

译者/岱嵩

［此帖子已被 atcoolman 在 2008-12-2 13:46:39 编辑过］

atcoolman

巴菲特加?18?增持比?迪 http://www.wenweipo.com [2008-12-04]

【本??】比?迪(1211)宣布，已於昨日?行的股?特?大?上，通?向巴菲特旗下的巴郡附?公司中美能源，增?2.25?股H股，?行??每股8元。增?股份???比?迪??大後?股本9.89%，及已?行H股??的28.37%，涉及?金??18?元。是次增?所得?金，?用於汽?零部件及??汽?研??目、一般???金及???行?款。此外，?上同?通?委任中美能源主席?德??比?迪非?行董事。 　 ?然昨日已通?中美能源?增?比?迪股份，惟今次?未能承接10月初，首次?出巴菲特入股比?迪?令其股?急升的??。比?迪昨日先升後跌，?以接近全日低位11.02元收市，逆市跌1.61%；最高曾升至11.7元，升4.46%，低?11元，跌1.79%。 PS: 此文已经修改，删除最后一段关于第二次增发的误解。详见：http://www.xxtz.com.cn/cgi-bin/xxbbs/bbsxp/ShowPost.asp?id=6122&topage=15 No.217

［此帖子已被 atcoolman 在 2009-2-9 12:34:04 编辑过］

atcoolman

来一篇八卦的，关于巴老的姐姐 - Doris Buffett：

---

Add 'Santa' to her titles

James Monroe HS holds a holiday fête for Ms. Buffett, the 'Sunshine' Santa Claus

BY HUGH MUIR

Date published: 12/9/2008

Doris Buffett was honored by the city School Board.

After a half-hour reception in her honor at James Monroe High School last week, Doris Buffett sat in a rocking chair and deftly handled what was really the afternoon's main event: chatting for an hour with most of the some 200 guests who lined up to talk with her.

In keeping with the season and the setting, she wore a dark sweater covered with Santa Claus faces.

City public schools Superintendent David G. Melton keynoted the reception: "She understands the problems we face as educators and the challenges that are unique to Fredericksburg city schools," he said. "We want to say thank you, Ms. Buffett. Thank you for caring."

Among Buffett's numerous philanthropic gifts to Fredericksburg is her high school mentoring program, begun in 2006, for students at James Monroe. Called STARS, for Students Taking Action and Responsibility, it aims to help those struggling to graduate because of academic or disciplinary problems.

Speaking for the James Monroe students and as a beneficiary of the mentoring program, senior Travis Finney told the gathering: "The hard work with my mentor has really made a difference. Ms. Buffett has helped us all, from paying for us to go on college visits, to offering thousand-dollar scholarships for maintaining a certain GPA. We thank you."

Teachers, mentors, mentees, School Board members, community activists and student-organization leaders were invited to the reception. Representatives of each of Fredericksburg's seven public schools presented her roses (pale yellow). She also received a throw rug depicting historic sites in the Fredericksburg area, as well as three white shopping bags with gold bows containing small souvenirs from each of the schools.

"I really appreciate this," Buffett said. "You get a good view of a community by the way its schools are run. I enjoy living in Fredericksburg and I plan to stay around." In her 80s, the elder sister of Midwestern philanthropist Warren Buffett is a longtime resident of Fredericksburg. She also spent some growing-up years here while her stockbroker father, Howard, served four terms in the House of Representatives as a congressman from Nebraska during and after World War II.

She also received her early college schooling in the east, attending Mount Vernon Junior College and George Washington University before going on to Omaha University in her home state.

Buffett did not have real wealth of her own until her mother died in 1996 and she received her share of a family trust. That year she set up the Sunshine Lady Foundation. (She doesn't remember how she came up with the name; "People seem to like the idea of spreading light," she once said.)

Since then the foundation has awarded more than $50 million in philanthropic grants. And she expects a return. From her STARS students, for example, she demands good grades (at least a 2.5 grade-point average), good class attendance and no disciplinary problems. She also requires community collaboration, including matching funds from local organizations.

In a 2007 magazine interview, she said: "You can't be sappy about this. Do it as a business. I look at [philanthropy] as an investment." And, she says, don't even think about wasting money. "It's not in the Buffett DNA." Her five-member board and her six-member staff in Maine all work for free.

She receives thousands of letters a year, many of them passed on from her brother Warren, asking the family for financial help. She and her staff make an effort to reply to all of them. While "the second-richest man in America" is not involved in his sister's philanthropies, Warren did give her foundation $5 million in Berkshire Hathaway stock a year ago to pay for the staff and stamps needed to answer all that mail.

Hugh Muir: 540/735-1975
Email: hmuir@freelancestar.com

atcoolman

Buffett on 0% interest rates

Warren Buffett emailed this note to the directors of his company, Berkshire Hathaway (BRK.B), Tuesday after he heard that the U.S. Treasury sold $32 billion in 4-week bills at a yield of 0%:

“This should be bullish for Berkshire. With great foresight, I long ago entered the mattress business in a big way through our furniture operation. Now mattresses have become fully competitive as a place to put your money, and sales will soon take off.”

Source: Fortune

---

12.11.2008

Jim Rogers and Bill Gross say: Short the Bond Market

Jim Rogers has been shorting the Long Term Government Bond in the United States. Now, even Bill Gross says that the bond market has bubble characteristics. This must be a very, very good shorting opportunity.

How to do this trade:

Short the Futures on CBOT (30 year Bond)
Buy TBT ETF (inverse ETF on Long Term Government Bonds)

atcoolman

Buffett University

December 10, 2008

I watched a television special about Warren Buffett over the weekend on Fox Business called Buffett U. Warren Buffett hosted a question and answer session with business school students from all over the country. The students were allowed to ask Buffett questions about any topic that they wished. I found one of Buffett’s comments particularly interesting.

Buffett explained his investment philosophy as a young investor. He stated that he always believed in investing in great companies at discounted prices. But he was a much more active investor when he was younger. Buffett explained that he began with only $9800 so he would have to sell one investment in order to purchase a better investment. If he had invested in a company selling for 80 cents on the dollar then he would sell his investment to purchase a company trading at 60 cents on a dollar.

This is intriguing because this differs from the buy and hold forever Buffett of the latter years. I am not trying to suggest that Warren Buffett was daytrading stocks. But he was selling cheap stocks to purchase cheaper stocks. I think that this illustrates that when you are investing small amounts of capital; you have to always seek the greatest return on capital. This may mean selling a good investment idea for a great one.

For example, let’s say you had about $25,000 to invest. You bought 1000 shares of American Express(AXP) at $23 per share because you believe that AXP has an intrinsic value of $30 per share. This equates to a $7 per share potential gain and a 23% profit. A few months later when American Express is trading at $25, you notice that Best Buy is selling at $20 per share. You believe however that Best Buy has an intrinsic value of $35 per share. This represents a $15 per share gain and a 43% profit. You can see that the most profitable move is to buy Best Buy despite the fact that you didn’t receive the full value for American Express.

Buffett is now rich enough that he no longer needs to sell one opportunity to recognize another. If you are not quite as rich as Buffett (like me) and want to maximize returns with less money then consider these tips. Always set an intrinsic value for an investment and aim to realize that value. Be flexible. If a more attractive opportunity presents itself then adapt your investment strategy.

atcoolman

BYD Adds Plug-In as China Gets Edge on Toyota, GM

By Tian Ying

Dec. 15 (Bloomberg) -- BYD Co., the Chinese automaker backed by Warren Buffett, started selling the world’s first mass-produced plug-in hybrid, gaining an edge on Toyota Motor Corp. and General Motors Corp. in electric-powered vehicles.

The F3 DM can run for 100 kilometers (62 miles) using only batteries, Shenzhen-based BYD said in a statement today. Toyota plans to begin testing plug-ins, which can be recharged from household powerpoints, late next year, it said in August. GM aims to start selling the Volt plug-in in late 2010.

BYD surged the most in two months in Hong Kong trading after saying the new model and government tax breaks for small cars would help it almost double vehicle sales next year. China is encouraging automakers to develop alternative-energy vehicles to curb oil imports and to help local companies challenge GM and Toyota, the world’s biggest hybrid-car maker, overseas.

“BYD is making progress in the right direction,” said Yale Zhang, director at CSM Asia. “Still, a lack of fast recharging facilities and other infrastructure is handicapping BYD’s efforts.”

The automaker expects to boost total sales to 350,000 cars next year from an expected 180,000 this year, founder and Chairman Wang Chuanfu told reporters in Shenzhen today.

“The development of electric-powered vehicles is the best way for the Chinese auto industry to surpass other leading countries,” Wang said at an unveiling ceremony. BYD currently sells gasoline models such as the F3, F6 and F8. It plans to add at least five new models next year.

The company, also China’s biggest maker of rechargeable batteries, rose 16 percent to HK$13.32 at the close in Hong Kong. It has fallen 1.9 percent this year compared with a 46 percent plunge for the benchmark Hang Seng Index.

Rechargeable Batteries

The F3 DM’s batteries can be fully recharged from a power point in as little as seven hours and 50 percent powered via a quick charge at a specialist station in 10 minutes, BYD said. The car also has a gasoline engine as a back-up power source.

The car costs from 149,800 yuan ($22,000), said Xia Zhibing, BYD’s sales head. That compares with Toyota’s Prius, which costs from 259,800 yuan. The high price of hybrids and the lack of charging stations have damped demand in China. The Prius, the bestselling hybrid in China, racked up 748 sales nationwide in the first ten months of the year.

Still, GM started selling a Buick LacCrosse Eco-Hybrid in July and Nissan Motor Co., Japan’s third-largest automaker, intends to begin offering electric cars in China by 2012.

China Support

The Chinese government plans to support domestic automakers’ research into alternative-energy vehicles in a bid to have 60,000 on the roads of 10 cities by 2012. BYD has signed a deal for “financial cooperation” with Export-Import Bank of China, it said without elaboration.

The government may subsidize hybrid cars to cut costs for consumers, Wang said. The State Council is also set to consider a plan to scrap a sales tax on vehicles with engines of less than 1.6 liters, he added.

“It would be a very big push for car sales,” if the sales tax plan is approved, Wang said. The government has also altered fuel taxes and is mulling ways to encourage people to buy cars on credit to help revive vehicle sales, which have fallen for three out of the last four months.

BYD will initially target the F3 DM at government agencies and corporate customers, Wang said. The Shenzhen local government and China Construction Bank today signed deals to buy a total of 50 cars.

Regulatory Steps

U.S. sales of the F3 DM will likely start in 2011, Wang said. They may begin earlier if the company can complete the necessary regulatory steps more quickly than expected, he added.

Buffett’s MidAmerican Energy Holdings Co. in September bought 9.9 percent of BYD for HK$1.8 billion ($232 million). The stake sale may help the automaker boost its profile overseas and also reassure potential customers, Wang said.

“Buffett’s investment helps us enhance our brand image,” he added. “It’s a long-term investment and it will help our growth in the long run.”

BYD is working with MidAmerican to develop batteries that store power generated from wind and power sources, Wang said. The products may be commercialized in one to two years, he said.

To contact the reporter on this story: Tian Ying in Beijing on ytian@bloomberg.net

Last Updated: December 15, 2008 07:04 EST

福尔莫斯

强烈支持!谢谢atcoolman!

上面已有个置顶的关于巴菲特的专贴，置顶的数量有限。不过，这应不影响atcoolman和各位对于收集研究Buffett的积极性吧？

atcoolman

引用：

---

原文由 福尔莫斯 发表于 2008-11-28 12:38:58 :

强烈支持!谢谢atcoolman!

上面已有个置顶的关于巴菲特的专贴，置顶的数量有限。不过，这应不影响atcoolman和各位对于收集研究Buffett的积极性吧？

---

得福兄支持，已是斗志昂扬，激情万丈了，哈哈。

什么置顶不置顶，无所谓。有价值的信息，即使埋没在破纸堆里，也会有人把它捡出来的。

受益福兄教诲多年，无以回报，这个贴权作我能做的一点贡献吧，坛在贴在，如水长流。

atcoolman

其他声音：

在转上面一篇Fool关于巴老的评论同时，发现了下面这篇对Michael Lewis的采访。读过洛文斯坦1995年那本巴老传记，相信对此人不会太陌生，至少不会对他的成名作生疏 - 《Liar's Poker/撒谎者的扑克》（据wikipedia介绍，这本书和Barbarians at the Gate and The Bonfire of the Vanities构成描述80年代华尔街情形的三部曲。后二者已经给拍成电影，有兴趣的朋友不妨找来看看，权作消遣和长见识。）Michael Lewis更是在1989年宣称：“The reason [Buffett] is so rich is simply that random games produce big winners - 巴菲特变得如此富有的原因不过是随机游戏中产生的大赢家。”其对巴老的敌意和不屑，可见一斑。我再翻阅一下《The Snowball》后面的索引，发现书中出现Michael Lewis有3次，《Liar's Poker》则是6次，足见其对社会大众的影响。

介绍了这么多，且看看他怎么说：

---

Michael Lewis on Wall Street's Need for Privacy

By Mac Greer
November 28, 2008

So when did it first start to go wrong for one-time Wall Street powerhouses like Goldman Sachs (NYSE: GS), Merrill Lynch (NYSE: MER), and Morgan Stanley (NYSE: MS)? Is the stock market still the place to be for long-term investors, or is Warren Buffett's optimism misplaced? And would we be in this mess if women were calling the shots on Wall Street? In this second of three installments, I ask Liar's Poker author Michael Lewis, editor of a new anthology, Panic: The Story of Modern Financial Insanity.

For the full audio version of the interview, click here.

Mac Greer: Michael, I know your employer at one point, Salomon Brothers, was the first Wall Street firm to go public. And when Salomon Brothers goes public and other big Wall Street firms go public, the game changes?

Michael Lewis: Dramatically, because all of a sudden what happens is the employees keep a large chunk of the upside of any risky bets and none of the downside. Before they had the downside and the upside and the firms, as partnerships, took much less risk and never would take risks, single risks that would sink the whole firm because essentially all the partners' wealth was tied up in these places. Once the firms are corporations, well then the game becomes shoot the moon and just disguise the fact that you are shooting the moon because if you are right; let's say you are faced with a bet that has got a 60% chance of working out and a 40% chance of failing. A pretty good bet, right?

Greer: I like it, yeah.

Lewis: You like that bet and if they let you bet as much as you want on it and you get to keep the winnings, you would probably just bet as much as you could on it.

Greer: Sure.

Lewis: But there is still a 40% chance that it is going to fail and if it fails, the firm goes down. This was starting when I was at Salomon Brothers. John Meriwether's traders, who went on to become Long Term Capital Management and so on, were increasingly allowed to make bets, that if they had gone wrong, could have sunk the firm and they were smarter than everybody else and for a long time, they did really, really well, but it was still risky. There were still catastrophic risks being run and these firms; what happened in the minds of Wall Street people is really interesting, I think, because I think part of this story is how the normal levels of pay changed so that when I got to Wall Street, if you made a million bucks in a year, you were really happy. You were big time. Million, two million, that was pretty great.

That became chump change. The levels of compensation became just extraordinary where people were making $10, $20, $30, $40, $50, $60, $70, $80 million inside these firms. If you back away from it and ask, "How do you make that kind of money as a financial person?" Well, it is very unlikely you are making it by adding that kind of value, by you actually being that valuable. You make it by taking huge risks and the risks paying off. I think people thinking that it was normal to get paid that much helps them get their minds around taking that much risk.

Greer: In terms of taking that sort of risk, is that unique to the male persuasion? Would this whole thing have unfolded differently if women were calling the shots on Wall Street?

Lewis: Yeah, that is a really good question. It was some academic research that ... was trying to analyze performance in the stock market, according to sex, and found that the most success. If you took a single woman, did better than a married woman and a married woman did better than a married man and a single man did worst of all. The presence of women was a good thing for an investment portfolio.

I don't think men are worse than women, but they are different and they are; I do think that if you waved a wand over Wall Street and it put women in the seats of genuine power through all of this, you never would have had the risk-taking.

Greer: And it sounds like ideally we want Henry Paulson to be a single woman.

Lewis: (Laughing.) Maybe he is ... wearing an incredible wig.

Greer: (Laughing.) That is your next book. I want to talk a little more about your experience at Salomon Brothers. I believe you wrote Liar's Poker back in 1989 and reflecting back on that experience at Salomon Brothers, you had this to say. You said, "To this day, the willingness of a Wall Street investment bank to pay me hundreds of thousands of dollars to dispense investment advice to grown-ups remains a mystery to me. I was 24 years old with no experience of or particular interest in guessing which stocks and bonds would rise and which would fall. The essential function of Wall Street is to allocate capital to decide who should get it and who should not. Believe me when I tell you that I hadn't the first clue."

Now are you being a bit tough on yourself and to what extent can we basically just say that about everyone on Wall Street now?

Lewis: Well I am being completely honest. I think I described myself as an intelligent observer would have described me. The piece you are referring to is the piece that is in the current issue of Portfolio magazine, where I basically, as the author if Liar's Poker, wander back on to the Street and figure out what the hell happened here. I think that there are really smart people on Wall Street, and there are people who are suited to the job. Warren Buffett is suited to the job. But there are a lot more people doing finance than should be doing finance. The system has evolved to reward all kinds of quixotic personalities and talents that have nothing to do with actually making shrewd decisions about capital allocation.

Greer: Any thoughts on Warren Buffett's recent call that U.S. stocks are a good place to be for the next 10 years?

Lewis: Well, you really don't, and I have done it before, want to take on Warren Buffett. It is sort of a game that doesn't pay. Let me tell you what I have done. I have actually just started buying S&P index funds, just now, just in the last week or so. I had been on the sidelines for a long time, so I got a huge amount of cash and those. And I am going to average down if I have to average down, so I guess I agree with him, but I don't really know. I wouldn't want anybody to take my advice and he doesn't know, he just thinks. He doesn't know how bad it could get because how bad it gets depends in large part on investor psychology, and that is essentially unpredictable.

I think that in the long run; the problem with Warren Buffett is that in the short run he is dead. In the long run, we are all dead. If you are an older person, if you are talking to a 75-year-old person saying, "Should you get in the stock market with your retirement funds right now?" I would say it is insane. You don't know what it is going to do. God, it could go to 4,000; it could go anywhere. We are in the middle of a panic, but if you are a middle-aged person or a young person, it makes complete sense. I don't feel at all uncomfortable having my children's college funds in the stock market because they are 9 and 6 and 2 years old.

atcoolman

Does Buffett Stand By His 1999 Sun Valley Prediction?

By: Peter Cooper, Arabian Money

Posted Thursday, 11 December 2008

Readers of the new official Warren Buffett biography ‘The Snowball’ will be taken aback by the review of his presentation to the Sun Valley meeting of the US super-rich in 1999. Then he suggested that the Dow might go nowhere for 17 years, following a pattern seen in many previous epochs, most recently 1964-1981.

Remember that 1999 represented the very height of the dot-com bubble. Buffett’s statement was bursting the bubble of business success stories like Bill Gates who sat in the audience, and gasped at this prediction.

Yet how wise the Sage of Omaha has proven to be. The dot-comers have seen their fortunes shrink and not recover from the bust. And the Dow today is substantially lower than in 2000.

Why buy now?

Why then did Warren Buffett put out a buy notice on stocks last month? Is this not a contradiction of his own prediction about 1999-2016?

Well, to be fair the Dow has rallied 20 per cent since his call. But is this therefore nothing more than a bear market rally?

If we are to take the seminal 1999 statement from Warren Buffett seriously, and he has not denied it and presumably endorsed its inclusion right at the front of his new biography, then that has to be the conclusion.

However, it could be that the inflation outlook has changed so dramatically in the wake of the $8 trillion in bailouts and stimulus packages now being thrown at the US economy that Buffett is having a re-think.

Stocks could well be buoyed upwards by a hyper-inflationary economy. This has happened most recently in Zimbabwe though this is hardly an economic model worth replicating in the world’s biggest economy.

Q-theory

Russell Napier, author of the definitive book ‘Anatomy of the Bear’ reckons stocks could rise for a couple of years on the back of the money being injected into the global economy, but this will ultimately fail and lead to stocks plunging to new lows.

According to Q-theory - which values stocks by reference to replacement value of their assets - the Dow market bottom is at around the 4,000 level or another 55 per cent down.

The ride from 4,000 back to 14,000 would be a very substantial roller-coaster ride, and that might indeed take until 2016 as Warren Buffett suggested in 1999.

But in the short term a two year bull market in an inflationary environment, and presumably with a weakening dollar, would be highly positive for precious metals, and particularly their stocks.

As suggested elsewhere on this blog the Dow-to-gold ratio could well go to its historic low of one: that is to say $4,000 an ounce for gold and the DJI at 4,000 within this two-year time horizon and maybe next year.