Buffett would be “surprised a lot” if stock prices around the world fell 50% in the near future…
As CEO and Chairman of Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B), Buffett not only steers the wheel of a $151 billion company, but has ownership and voting rights in companies linked to everything from beverages to banking to railroads...
And he has levered up on the U.S. Economy - big time.
So if Warren Buffett told you he didn't think the market was going to drop any time soon, would you bet against him?
I certainly wouldn't!
Let's look at some of the facts:
In November of 1999, moments before the stock market crashed, Buffett said, “you have to be wildly optimistic to believe that corporate profits as a percentage of GDP can, for any sustained period, hold much above 6%...”
He made the case that stocks would ultimately disappoint investors over the coming decade.
And of course we all know how that unfolded.
During the financial crisis of 2008, when investors were in a complete panic, Buffett calmly readied himself to make billions. He invested in Goldman Sachs (NYSE: GS), Bank of America (NYSE: BAC), Dow Chemical (NYSE: DOW) and helped finance private deals such as the Mars and Wrigley merger.
It seems that he was right on all of those calls as well.
So, a few months ago, when Buffett was being interviewed on CNBC, I listened closely to the way he steered us away from fearing another financial crisis.
To be exact, Buffett said that another financial crisis would happen “someday,” but that he didn't think it would happen anytime soon.
In his own words:
“Humans will behave in crazy ways, both on the upside and the downside in the next 50 years...because of something like 2008...they’re a little more careful for a while.”
Yet, he went even further into specifics, telling CNBC commentator Joe Kernen that he would live to see the Dow rise to 100,000: “I won’t, but you will,” said 83-year-old Buffett.
So if he’s this bullish…where is he investing now and how can YOU follow his lead?
Buffett just announced a 41% increase in profits for his billion-dollar company -- the highest increase in profits in the company's history...a stunning new record by any stretch of the imagination.
For investors, there is a lot to learn from the Berkshire portfolio if you’re willing to take a look:
- Investments range from American building and industrials to American technology to American healthcare.
- The top 10 holdings are all American Companies. The largest positions are in Wells Fargo (NYSE: WFC), Coca-Cola (NYSE: KO), and American Express (NYSE: AXP).
- Buffett and team have added American energy companies to their list of investments – from ExxonMobil (NYSE: XOM) to National OilWell Varco (NYSE: NOV) within the last year.
Buffett’s real secret has always been to “be fearful when others are greedy and greedy when others are fearful.”
And right now -- he’s levered to the tilt on the American Economy, from Coca-Cola to ice-cream to credit cards.
Greedy? I'd certainly say so.
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