Writers, analysts, pundits, and investors everywhere are sharing their thoughts on the current stock market slide. In this feature, we compile thought-provoking takes from Warren Buffett and other writers from around the Web. Take a look, then share your own ideas.
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What: "Mr. Buffett on the Stock Market," Carol Loomis & Buffett, Fortune
So What: No collection of articles on the market would be complete without the Oracle of Omaha: "Once you reach the point where everybody has made money no matter what system he or she followed, a crowd is attracted into the game that is responding not to interest rates and profits but simply to the fact that it seems a mistake to be out of stocks. In effect, these people superimpose an 'I-can't-miss-the-party factor' on top of the fundamental factors that drive the market. Like Pavlov's dog, these 'investors' learn that when the bell rings -- in this case, the one that opens the New York Stock Exchange at 9:30 a.m. -- they get fed."
Now What: Read the article.
What: "True Value?", Walter Updegrave, Money.com
So What: Value investors are snickering as many companies that built up suspect valuations have returned to Earth -- or at least Earth orbit. But will they have the last laugh? Updegrave thinks their day might not yet have fully come. "We're in the late stages of an economic expansion," he says, "a scenario that usually favors companies that can post earnings gains even in the face of a sluggish economy -- and those stocks are growth, not value stocks."
Now What: Read the article.
What: "A Great Time for Building Great Companies," Bill Gurley, CNet
So What: With the thermonuclear boom apparently over, says venture capitalist Gurley, it's a great time to build a company now that competitors are falling by the wayside, real estate is affordable, and employees are in better supply. But does that mean VCs and entrepreneurs have learned "growth at any cost" is a mantra that just doesn't work? This one thinks so. "While the future is more stable," he writes, "there is still much work to be done. Sleeve rolling and heavy lifting will encourage attrition."
Now What: Read the article.
What: "Flying Above the Bears," Cintra Scott, SmartMoney.com
So What: Though the market, as everyone knows, is down, that doesn't mean there aren't still plenty of stocks floating above the fray. In this story, Scott uses a stock screen to unearth a handful of companies that have managed to remain "priced to perfection" even as many, many others have returned to earth. The exercise reminds us of two things: First, that the stock market is better described as a market of individual stocks, and second, that no company is immune to "reality."
Now What: Read the article.
What: "These Lows Aren't Just Low -- They're Historical," Stefani Lako Baldwin, UpsideToday
So What: Baldwin's second paragraph says it all: "A number of company shares hit such personal lows on Thursday one had to dig far back into historical share data to find equivalent closing prices. In some cases, it didn't get any worse than Thursday." It's a point worth making, because examining 52-week highs and lows -- or most any historical indicator -- should be only one step in any valuation exercise or investment decision.
Now What: Read the article.
What: "All That Sidelined Cash May Stay on Strike," Pat Dorsey, Morningstar.com
So What: Some argue, according to Dorsey, that a recent rise in the cash holdings of mutual funds means the market stands to rebound when the election uncertainty comes to a close and fund managers put their money back to work. But is this true? "The problem with this theory," he says, "is that cash levels were abnormally low over the past couple of years, as managers struggled to stay fully invested during a raging bull market to prevent themselves from getting smoked by their benchmark indexes.
Now What: Read the article.
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