Warren Buffett’s Investment Advice for You

March 4, 2010 by · Leave a Comment 

Buffett Says Consumer Behavior May Be Forever Changed by Recession

By Katie Escherich and Bianna Golodryga

Billionaire investor Warren Buffett believes that the U.S. will emerge from the current economic recession “stronger than ever,” but he said the behavior of the American consumer may be forever changed.

“We were on a binge before,” the CEO of Berkshire Hathaway told “Good Morning America” in an exclusive interview. “I mean, we are not saving extraordinary sums now but the savings behavior has changed. … I don’t necessarily think that we will go back to behaving the way that we were two years ago.”

The man known as the “Oracle from Omaha” because of his history of successful investments, shared his top three pieces of advice for average Americans who want to grow their savings and keep their money safe.

Number one: “If it seems too good to be true, it probably is.”

Number two: “Always look at how much the other guy is making if he is trying to sell you something.”

Number three: Don’t go into debt.

“Stay away from leverage,” he said. “Nobody ever goes broke that doesn’t owe money.”

The “binge,” he said, was fueled largely by over-borrowing by both individuals and companies.

“The U.S. public as a whole has gotten into problems from leverage, financial institutions have gotten into problems through leverage,” he said. “A long, long time ago a friend said to me about leverage, ‘If you’re smart you don’t need it, and if you’re dumb, you got no business using it.’”

At a time when many college graduates face uncertain futures and are struggling to find jobs, Buffett said he still believes that “investing in yourself is the best thing you can do. Anything that improves your own talents. And I always advise students to do that, high school students, college students and obviously investing in your children is, in some ways, investing in yourself.”

No matter what happens in the economy, “if you have true talent yourself, and you have maximized your talent, you have a terrific asset.”

Warren Buffett on Budget Deficit

Buffett showed some support for the idea of a second economic stimulus package, but cautioned that it should be handled differently to restore the American public’s confidence.

The number of earmarks included in the bill were “part of what has affected the American psyche,” he said. “When we go on and we talk about earmarks and that sort of thing, and then we get the kind of behavior we’ve got, I mean, that is not reassuring to the American public.”

He called the first stimulus “like taking half a tablet of Viagra and having also a bunch of candy mixed in, you know, as if everybody was putting in enough for their own constituents.”

He also cautioned that the American public will have to be patient and give the economy time to recover, particularly when it comes to the surplus of houses on the market that resulted from overbuilding.

“The American public will get disappointed, but it is going to take time to work through the overhang of houses, for example,” he said. “You can’t cure that in a day or a week or a month, so a stimulus doesn’t cure that.”

Buffett also expressed confidence in Federal Reserve Chairman Ben Bernanke, and dismissed rumors that the Fed chief may not return once his current term is up at the end of the year.

“Well, I think he should keep his job,” he said. “And as to what people say, well they are going to say something, they have always talked about Fed chairmen when their terms are coming up. But taking Bernanke out of the lineup would be like if you had the Ryder Cup, taking Tiger Woods out of it. It just doesn’t make any sense.”

Buffett acknowledged that the actions taken by the government will lead to an even bigger budget deficit. “It will happen and I worry about it, but I would worry more if we weren’t doing anything right now.”

He compared the current situation to “a friend that is sinking in quicksand.”

“You throw them a rope and they tie it around themselves and a car pulls them out, they may dislocate a couple of shoulders but it’s still the right thing to do. And we are doing things which will have negative consequences down the road, but they are still the right thing to do to get us out of this particular economic quicksand that we are in.”

Warren Buffett on Health Care Reform

Asked if he agreed with President Obama that passing health care reform would help limit the ballooning budget deficit, Buffett replied, “I really don’t think that I’m an expert on health care,” but said the system needs to be drastically changed.

“I think it’s a moral imperative that everybody have access to health care,” he said. “It’s a terrible problem.”

Despite the pressing economic concerns, he said he would be in favor of the government devoting resources to devising a plan for health care reform “if there’s a well-thought-out program that actually promises to bring down the cost of health care.”

“We are spending 2 trillion plus on health care a year,” he said. “If we could come up with something that even maintains the present cost and promises not to have a greater-than-inflation rate of gain in the future, and brings health care to the people that aren’t getting it now, then I think that will be a huge improvement. I don’t think that is an easy task.”

In anyone’s lifetime, “you will see many recessions, some bubbles,” he said, but he’s optimistic about the future.

“If we sat down here [at the] start of the 20th century, and I said there is going to be the panic of 1907, there is going to be a world war. It will be followed by a Great Depression with 35 percent unemployment, and then we will have another war that it looks like we are going to lose, and then we are going to have a nuclear bomb like no one has ever seen … by the time I got through, you’d be crying. But the Dow went from 66 to 11,497 during that same century, and the average person’s standard of living went up 7 to 1. We have a system that unleashes human potential like nobody has ever seen, and it has done it in the past, it will do it in the future. So I’m a huge bull on America — it does let people like you and me do far more than we could have done 200 years ago.”

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Security Without Freedoms

December 31, 2009 by · Leave a Comment 

By Paul Craig Roberts

December 22, 2009 “Information Clearing House” — Obama’s dwindling band of true believers has taken heart that their man has finally delivered on one of his many promises–the closing of the Guantanamo prison. But the prison is not being closed. It is being moved to Illinois, if the Republicans permit.

In truth, Obama has handed his supporters another defeat. Closing Guantanamo meant ceasing to hold people in violation of our legal principles of habeas corpus and due process and ceasing to torture them in violation of US and international laws.

All Obama would be doing would be moving 100 people, against whom the US government is unable to bring a case, from the prison in Guantanamo to a prison in Thomson, Illinois.

Are the residents of Thomson despondent that the US government has chosen their town as the site on which to continue its blatant violation of US legal principles? No, the residents are happy. It means jobs.

The hapless prisoners had a better chance of obtaining release from Guantanamo. Now the prisoners are up against two US senators, a US representative, a mayor, and a state governor who have a vested interest in the prisoners’ permanent detention in order to protect the new prison jobs in the hamlet devastated by unemployment.

Neither the public nor the media have ever shown any interest in how the detainees came to be incarcerated. Most of the detainees were unprotected people who were captured by Afghan war lords and sold to the Americans as “terrorists” in order to collect a proffered bounty. It was enough for the public and the media that the Defense Secretary at the time, Donald Rumsfeld, declared the Guantanamo detainees to be the “780 most dangerous people on earth.”

The vast majority have been released after years of abuse. The 100 who are slated to be removed to Illinois have apparently been so badly abused that the US government is afraid to release them because of the testimony the prisoners could give to human rights organizations and foreign media about their mistreatment.

Our British allies are showing more moral conscience than Americans are able to muster. Former PM Tony Blair, who provided cover for President Bush’s illegal invasion of Iraq, is being damned for his crimes by UK officialdom testifying before the Chilcot Inquiry.

The London Times on December 14 summed up the case against Blair in a headline: “Intoxicated by Power, Blair Tricked Us Into War.” Two days later the British First Post declared: “War Crime Case Against Tony Blair Now Rock-solid.” In an unguarded moment Blair let it slip that he favored a conspiracy for war regardless of the validity of the excuse [weapons of mass destruction] used to justify the invasion.

The movement to bring Blair to trial as a war criminal is gathering steam. Writing in the First Post Neil Clark reported: “There is widespread contempt for a man [Blair] who has made millions [his reward from the Bush regime] while Iraqis die in their hundreds of thousands due to the havoc unleashed by the illegal invasion, and who, with breathtaking arrogance, seems to regard himself as above the rules of international law.” Clark notes that the West’s practice of shipping Serbian and African leaders off to the War Crimes Tribunal, while exempting itself, is wearing thin.

In the US, of course, there is no such attempt to hold to account Bush, Cheney, Condi Rice, Rumsfeld, Wolfowitz, and the large number of war criminals that comprised the Bush Regime. Indeed, Obama, whom Republicans love to hate, has gone out of his way to protect the Bush cohort from being held accountable.

Here in Great Moral America we only hold accountable celebrities and politicians for their sexual indiscretions. Tiger Woods is paying a bigger price for his girlfriends than Bush or Cheney will ever pay for the deaths and ruined lives of millions of people. The consulting company, Accenture Plc, which based its marketing program on Tiger Woods, has removed Woods from its Web site. Gillette announced that the company is dropping Woods from its print and broadcast ads. AT&T says it is re-evaluating the company’s relationship with Woods.

Apparently, Americans regard sexual infidelity as far more serious than invading countries on the basis of false charges and deception, invasions that have caused the deaths and displacement of millions of innocent people. Remember, the House impeached President Clinton not for his war crimes in Serbia, but for lying about his affair with Monica Lewinsky.

Americans are more upset by Tiger Woods’ sexual affairs than they are by the Bush and Obama administrations’ destruction of US civil liberty. Americans don’t seem to mind that “their” government for the last 8 years has resorted to the detention practices of 1,000 years ago–simply grab a person and throw him into a dungeon forever without bringing charges and obtaining a conviction.

According to polls, Americans support torture, a violation of both US and international law, and Americans don’t mind that their government violates the Foreign Intelligence Surveillance Act and spies on them without obtaining warrants from a court. Apparently, the brave citizens of the “sole remaining superpower” are so afraid of terrorists that they are content to give up liberty for safety, an impossible feat.

With stunning insouciance, Americans have given up the rule of law that protected their liberty. The silence of law schools and bar associations indicates that the age of liberty has passed. In short, the American people support tyranny. And that’s where they are headed.

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