Buy American. I Am.
Warren Buffett · 2008
"Amid GFC panic, US stocks are cheap; be greedy when others are fearful."
At the darkest depths of the 2008 financial crisis, Warren Buffett published a New York Times op-ed declaring he was buying American stocks with his personal money. He reminded the world that 'be fearful when others are greedy, and be greedy when others are fearful.'
Buffett's thesis relied on the distinction between the real economy and the stock market. While the short-term economic outlook was terrible, the long-term productive capacity of American businesses remained intact. Market panics create a liquidity crisis where investors are forced to sell assets regardless of their intrinsic value. By stepping in when liquidity was lowest and fear was highest, Buffett bought productive assets at historically depressed multiples.
What was Warren Buffett's core argument for buying stocks in 2008?
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- How Buffett's "Buy American" call agedForbes
Reinvesting When Terrified
"In a crash the real danger is not buying too early but freezing entirely; the cure is a reinvestment plan decided in advance."