The man heralded as the “Oracle of Omaha” tells acolytes he evaluates companies based on their stability, their competitive advantage and what he thinks they’ll be worth years into the future, instead of trying to find the moment when their stocks are at their lowest. The declines in his recent equity purchases suggest he could have waited before taking the plunge.
I'll stick up for Uncle Warren. Paying a discounted price for any quality product is always a good deal. No one can ever know if something on sale will see a further price cut in the near future. My shares of FXI have declined significantly since I bought them last year and I couldn't care less. I'll probably buy more soon.
We all now know that the current crisis is a once-in-a-lifetime event. Plenty of equity bargains will be available later this year and well into 2010. Hang in there, patient buyers.
Nota bene: Anthony J. Alfidi does not hold any stake in Berkshire Hathaway. He is long FXI (with covered calls).
