By Jason Simpkins
Famed investor Warren Buffett didn’t fare much better than anybody else in
2008. But the Oracle of Omaha remains optimistic, convinced that investors who
brave today’s fierce financial tempest will be rewarded in the long run.
“I’ve been buying American stocks,” Buffett said in an editorial in
The New York Times. “This is my personal account I’m
talking about, in which I previously owned nothing but United States government
bonds… If prices keep looking attractive, my non-Berkshire net worth will soon
be 100% in United States equities.”
As the world’s richest man, Buffett offers a kind of comfort that few others
can. And it couldn’t come at a better time. The fourth quarter of 2008 was the
worst quarter for the Standard & Poor’s 500
Index in more than two decades, as the closely watched stock-market
benchmark tumbled 23%.
It’s likely that even Buffett took the same bath as the average investor.
In separate filings with the U.S. Securities
and Exchange Commission (SEC), Buffett’s Berkshire Hathaway Inc. (BRK.A, BRK B) said it spent
$9.45 billion on equity securities in the first nine months of last year,
Bloomberg News reported. Among the purchases:
- Berkshire bought a majority stake in U.S. Bancorp (USB) over a period of time
that never saw the bank’s share price drop below 29.09, according to
Bloomberg News. That stock is currently trading at
less than $15 a share.
- Berkshire increased its Ingersoll-Rand Co. (IR) stake six-fold last
year when the shares never fell below $36.54. That company’s stock has lost
about half its value since Buffett made those purchases.
- And Berkshire stocked up on shares of Eaton Corp. (ETN) between July and
September - a stretch in which the stock never fell below $52.32. Eaton closed
yesterday (Wednesday) at $44.36 a share.
