Yes, Warren Buffet is the smartest investor in the world in my book...
"What we see in our residential brokerage business is a slowdown everyplace, most dramatically in the formerly hottest markets.
The day traders of the Internet moved into trading condos, and that kind a speculation can produce a market that can move in a big way. You can get real discontinuities. We've had a real bubble to some degree. I would be surprised if there aren't some significant downward adjustments, especially in the higher end of the housing market."
Dumb lending always has its consequences. It's like a disease that doesn't manifest itself for a few weeks, like an epidemic that doesn't show up until it's too late to stop it
Any developer will build anything he can borrow against. If you look at the 10Ks that are getting filed [by banks] and compare them just against last year's 10Ks, and look at their balances of 'interest accrued but not paid,' you'll see some very interesting statistics [implying that many homeowners are no longer able to service their current debt]."
May 07, 2006
Warren Buffet on the housing bubble implosion, condo speculators and dumb lending
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22 comments:
Stop reading USA Today! Read the "Economist" of the Housing Bubble
See my comments on the Westchester New York real estate market:
http://westchesterny.blogspot.com
Only the clowns quote Warren Buffett.
Can't sell with logic. Thrown Warren Buffett in the mix....
He is an unethical senile old fool. Say one thing and does another.
For all you know the bastard is buying back the finance companies he was sell in 2000 to 2003 and is first creating a stir with his bashing - THIS IS THE WARREN BUFFETT STYLE - he is the master of pump and dump and bash and buy.
If you want to follow Buffett you need to follow hi Berk holdinds and move based on percent change of his holdings the second they start. If you wait for his words. You will be buying and selling to Buffett!!!!
hahaha. I love it when people are dismissive of one of the most astute investors of the 20-21st century. That's classically clueless...
You don't get what I saying.
His words and his actions are not always one in the same. Stop looking for old quotes and just look at what he is buying and selling in real time.
by the way Buffett of Omaha. Never said a word to the clown in Omaha that were buying multi-million dallar houses off the money they made from Buffett's good frien Scott. Scott's stock crashed and tanked destorying the lives of all of Omaha's Buffett quoters. Where was Buffett. He became part of Scott's scheme to give him 33% of Scott's company in exchange for Scott being able to say Buffett own's my stock. WHEN PUBLIC AND SPOKE OUT LOUD ABOUT HIS HOLDINGS. The clowns of Omaha rushed in. In the matter of months the stock triple in value. Buffett then quietly sold and waited until he was done selling to say he dumped his buddy's stock. The Buffett quoters were then ruined.
You haven't a clue my friend.
dogcrap green, Please tell us why you are so bullish on RE? None of the fundamentals are even close to making sense to be bullish. Do you have a lot of money riding on the bullish side or is it your job or what? Just curious as I've read your comments on various threads and they are all on the bullish or dismissive side.
Dogcrap
Tell us what your net worth is and if you're close to Buffet and Gates, then we'll consider your
"advice".
Otherwise, we must conclude you're a jealous, screaming wannabe who thinks CAPS and !!! exclamation points make up for lack of brains.
Now what did you say your net worth is?
My net worth is squat. And I never said anything to indicat I am bullish on real estate
Read my own blog and you will see I am bullish on home builders, but bearish on suburban real estate.
As a former employee of the company that shares an office with Warren Buffett. I am very well aware what happens to people that try to follow Buffett WORDS versus his actions - BE CAREFULL.
I don't recall Warren Buffett saying "Hey, buy what I buy, and you'll be rich!" He said "Be fearful when others are greedy, and greedy when others are fearful."
If you think he is a senile old fool...it doesn't take a brain surgeon to know that the #2 wealthiest man in the world got there by being neither senile nor a fool.
You are a bitter person.
I don't post under Anonymous,
Before Kieth even mentioned Buffet here. I've mention him on my blog.
Like I said I seen what happens to those who chase his words. I strongly suggest you study the Berk holdings, selling and buying patterns versus the words Buffett speaks. They are not always the same.
Did you know from 1997 to 1999 Buffett was buying into homebuilders, real estate, home furnitings? That was when to buy.
Did you know Buffett was reducing his bank holdings in 2001 despite falling interest rates?
In 2003 he was buying staples.
It's 2006 are you sure you know what he is doing?
You may even be one of the fools from Omaha I use to watch get slaughter. Is that why you post under "anonymous".
Here is how it worked - REMEBER? Top executives in OUR office would be given some tips. As a way to brag they were CLOSE to Buffett they would spred their tips like wild fire. Senior management would try to brag how CLOSE they were to Buffett by riding the pump. THe little man would buy on the pump to prove he was on the iside track and somebody. By this time 2 years may have pass. Buffett was selling 18 months ago.
The sales never seem to hit the street in a timely manner though. Poor poor little guy. But he doesn't have as much money as Buffett, so who is he to question this pump and dump tactic.
I know all about Kiewit Plaza and what that office has done to people's lives.
Keith,
Why didn't you post what Buffet wrote about Gold and Oil?
Buffett: "I don't think there's a bubble in agricultural commodities like wheat, corn and soybeans. But in metals and oil there's been a terrific [price] move. It's like most trends: At the beginning, it's driven by fundamentals, then speculation takes over. As the old saying goes, what the wise man does in the beginning, fools do in the end. With any asset class that has a big move, first the fundamentals attract speculation, then the speculation becomes dominant.
Once a price history develops, and people hear that their neighbor made a lot of money on something, that impulse takes over, and we're seeing that in commodities and housing...Orgies tend to be wildest toward the end. It's like being Cinderella at the ball. You know that at midnight everything's going to turn back to pumpkins & mice. But you look around and say, 'one more dance,' and so does everyone else. The party does get to be more fun -- and besides, there are no clocks on the wall. And then suddenly the clock strikes 12, and everything turns back to pumpkins and mice."
Dogcrap,
I get it. When you follow Buffet's words, it's already too late. His actions have greater value.
Unfortunately, most of us find out what Buffet is up to months afterward through proxy filings, news articles, etc. That's why the only way to practice Value Investing is to understand and adhere to the fundamentals, not blindly follow Buffet.
Here's the holy book.
Dogcrap,
This thing about being "anonymous" is laughable. Unless your real name is "dopcrap green" (in which case you should shoot your parents and claim justifiable homicide) you are anonymous as well, blog or no blog. I don't put in an ID because I just don't feel like it.
I agree with Osman's last comment. Generally, it's better to go along with Buffett's sayings than to follow what he does. Those people you are talking about are greedy fools and they are like mice following the Pied Piper. They don't understand the concept of due diligence. Buffett has developed a following, and because he is well respected, people try to imitate what he does. Will people try to buy metalworking stocks tomorrow? Perhaps. Is that Buffett's fault? No. Can Buffett sell whenever he wants to as long as it meets SEC guidelines? Absolutely.
I don't follow Buffett on a general basis, but I respect someone who buys and holds for the long term, and I also respect a man who never splits his company's stock. I also follow his general principles of buying stocks that are not popular. At least 90% of the people out there wouldn't know a good stock to buy if it slapped them in the face. Buffett does and he takes advantage of that.
The media was speculating that he buy an energy company, but I bet he's thinking that energy companies are a bit too rich right now. People think what Buffett said 6 months ago is still true. It's not necessarily true --- that's why it was 6 months ago.
Dogcrap,
This thing about being "anonymous" is laughable. Unless your real name is "dopcrap green" (in which case you should shoot your parents and claim justifiable homicide) you are anonymous as well, blog or no blog. I don't put in an ID because I just don't feel like it.
I agree with Osman's last comment. Generally, it's better to go along with Buffett's sayings than to follow what he does. Those people you are talking about are greedy fools and they are like mice following the Pied Piper. They don't understand the concept of due diligence. Buffett has developed a following, and because he is well respected, people try to imitate what he does. Will people try to buy metalworking stocks tomorrow? Perhaps. Is that Buffett's fault? No. Can Buffett sell whenever he wants to as long as it meets SEC guidelines? Absolutely.
I don't follow Buffett on a general basis, but I respect someone who buys and holds for the long term, and I also respect a man who never splits his company's stock. I also follow his general principles of buying stocks that are not popular. At least 90% of the people out there wouldn't know a good stock to buy if it slapped them in the face. Buffett does and he takes advantage of that.
The media was speculating that he buy an energy company, but I bet he's thinking that energy companies are a bit too rich right now. People think what Buffett said 6 months ago is still true. It's not necessarily true --- that's why it was 6 months ago.
I realized I should modify the following comment:
"Generally, it's better to go along with Buffett's sayings than to follow what he does."
To:
"Generally, it's better to go along with what Buffett does vs. what he says."
Ok lets talk buffett pricipals.
Do you buy home builders when they are pulling in a profit and at the same time mass hysteria says they are heading south? Or do you short them?
Back to all you Buffet quoters. On my blog there are two themes - home builders as a long term investment. And what kind of moron would buy a pinksheet company like GTXC? guess which post the are the ones the Google ads read "invest like Buffett"
Take this blog for example. Pumping oil stocks. Pumping Gold. Telling us to short Home Builders. Then latching on to Warren Buffett for support.
I use to work with nitwits that would pump their penny crap all day to other co-workers. And if he was visting from the Omaha office you can bet your life the Buffett quotes would fly every which way. It was nuts. For years was told about the connection between Buffett and our spin-off Level 3. The clowns even had photos of Bill Gates, Buffett, and Scott to back their dream. Evry Buffett quote you can imagine was used with the insinuation that people "CLOSE" to Buffett knew. I sold that POS stock at $120 when a receptionist "quoted" Buffett. I dropped down to $2.00 per share.
Now here is the real kicker for all you Buffett fans.
Level 3 was on it's death bed. Walter Scott needed to be able to raise money and fast. for 15% of the total capital funding the company has recieved 33% of the company was given to Warren Buffet and friends at a 9% LOAN. Or $500 mill was LOANED at 9% with 33% new stock being printed so that Level could say they were in partners with Buffett. The stock exploded from $2.50 to $7.10
Without saying a word to anyone Buffett dumped between $6.50 to $7.10 to $6.50. This man that pound ed the tables and told everyone he "bought" into LVLT dumped in a few months without saying a word. The stock then crashed to $1.65
His friends in Omaha and hundreds of clowns that work out of the Kiewit Plaza office in Omaha were wiped out buying on the Buffett hype.
Level 3 is rising again. there is rummor Buffett is buying back in. The stock has climb to $5.55. Go to the message board and you will see all the clowns I use to work with quoting Buffett. We will see what the quoters say tomorrow at $2.00. I know they will still be there quoting Buffett.
Enough if this Buffett nonsense. I'll give Kieth one more shot at slamming me with his anonymous tag. I will ot respond again.
By the way. My mom named me Dmitri
Wow Dogcrap green, that was one of the better posts I've read on this blog.
As an analyst, I used to help cover LVLT, among other fixed wireline telcos. LVLT didn't make much sense to me once it became evident that there was such a glut of fiber in the ground. Like buying "eyeballs", investors were rewarding LVLT, Global Crossing, Etc based on fiber miles and other non-cash metrics.
The trick seems to be finding investments that are solid, cashflowing businesses AND are currently out of favor with the market. Once the market thinks it's hot, it quickly shifts from being a good investment to being a spec play. At that point, it's castles in the air which, as we all know, eventually come crashing down.
Seems wise to avoid the herd, including a rush to oil and gold.
Do you discuss homebuilder fundamentals on your blog?
You mark my words here. Warren Buffet is buying home builders.
That last statement on developers building base on what they can borrow was his classic bash and buy prep. He nevered said he had a problem with homebuilders. Just laid out the pieces to let the clowns imaginations run wild. a classic bash and buy move by Warren Buffett.
I am convince Buffett, the low life insurance salesmean is buying on his bash.
Think about this. when the insurance salesman warren Buffett saw the plans crash into the world trade towers. He went public and told the world to expect heavy buying of his insurance policy since buildings all over America will likely be hit by terrorist. yep he was pretty excited that day. NOW WHY DON'T WE SEE THOSE WARREN BUFFET QUOTES?
We will see and you can all bust my balls if I am wrong.
Live and learn about the world of Buffett.
I also agree that Buffett is not buying homebuilders right now. Actually, doesn't his company own Clayton Homes? I thought I heard that somewhere. Anyway, he's not going to catch a falling knife. If he buys, he will wait until nobody is talking about the homebuilders anymore. I give it anywhere from 1-3 years from now.
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