Comments on: Warren Buffett Op-Ed Explains Why He Is Buying, Not Selling http://www.peridotcapitalist.com/2008/10/warren-buffett-op-ed.html Stock market and investing blog published by Chad Brand, Founder/President of Peridot Capital Sun, 05 Feb 2012 15:45:30 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Chad Brand http://www.peridotcapitalist.com/2008/10/warren-buffett-op-ed.html/comment-page-1#comment-1061 Chad Brand Sat, 18 Oct 2008 16:17:00 +0000 http://www.peridotcapitalist.com/?p=657#comment-1061 Of course cash holds up better in bear markets than stocks do. Buffett wrote that stocks would "almost certainly" outperform cash over the next decade. Thereforem, if prices remain low, he would hold no cash and put his entire personal account into stocks.<br/><br/>Asset allocation (stocks, bonds, cash, etc) depends on one's time horizon. Neither of us said how much worse it could get before it gets better because we don't know. The short-term in unknowable. <br/><br/>What we do know is that history tells us that stocks at current valuations provide returns that exceed other asset classes over a 5-10 year period of time. So, cash is a bad option for long term investors. Of course cash holds up better in bear markets than stocks do. Buffett wrote that stocks would “almost certainly” outperform cash over the next decade. Thereforem, if prices remain low, he would hold no cash and put his entire personal account into stocks.

Asset allocation (stocks, bonds, cash, etc) depends on one’s time horizon. Neither of us said how much worse it could get before it gets better because we don’t know. The short-term in unknowable.

What we do know is that history tells us that stocks at current valuations provide returns that exceed other asset classes over a 5-10 year period of time. So, cash is a bad option for long term investors.

]]> By: Anonymous http://www.peridotcapitalist.com/2008/10/warren-buffett-op-ed.html/comment-page-1#comment-1060 Anonymous Sat, 18 Oct 2008 14:32:00 +0000 http://www.peridotcapitalist.com/?p=657#comment-1060 Not to argue with Buffet...but there's something important missing in his advice...something perhaps natural to him, but not to most of us.<br/><br/>In a portfolio which was part cash equivalents and part stocks the cash apparently held up much better throughout the recent events.<br/><br/>Now you and Buffet advocate to move the cash to the stocks because we expect them to blossom.<br/><br/>Only neither of you says how much worse it could get before it gets better and - more importantly - <br/>what is the sanitary minimum for the cash pile considering the near future. <br/><br/>What's a good cash/stocks ratio in times like these? Not to argue with Buffet…but there’s something important missing in his advice…something perhaps natural to him, but not to most of us.

In a portfolio which was part cash equivalents and part stocks the cash apparently held up much better throughout the recent events.

Now you and Buffet advocate to move the cash to the stocks because we expect them to blossom.

Only neither of you says how much worse it could get before it gets better and – more importantly –
what is the sanitary minimum for the cash pile considering the near future.

What’s a good cash/stocks ratio in times like these?

]]> By: Anonymous http://www.peridotcapitalist.com/2008/10/warren-buffett-op-ed.html/comment-page-1#comment-1059 Anonymous Fri, 17 Oct 2008 18:43:00 +0000 http://www.peridotcapitalist.com/?p=657#comment-1059 Who is this guy Buffett. Is he any good? never heard of him. Who is this guy Buffett. Is he any good? never heard of him.

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