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Good read. Summary: 1) 2008 sucked badly, and so will 2009 2) Even Buffett makes mistakes. Last year he made moves that lost his company billions of dollars.

Good read. Summary: 1) 2008 sucked badly, and so will 2009 2) Even Buffett makes mistakes. Last year he made moves that lost his company billions of dollars. One bank stock he bought lost 90% of its value. 3) The Government has taken actions that will have many negative consequences, but swift action was necessary to avoid a giant collapse. 4) Even though the near future looks gloomy, America has been through worse. We've been involved in World Wars, had great recessions and depressions, and have emerged stronger. 5) 75% of the last 44 years have had positive gains in the S&P 500. He thinks the next 40 years will be similar, but we will have some rough years. Don't be an idiot and try to go all-in catching falling knives or timing the bottom, average in your investments slowly, buy things you can afford, work hard, invest in well-run businesses, and you'll be aiight.

numair 18y ago
A counter to #4: The point that I, and so many like me, keep coming back to is... Every man, woman, child and dog has a credit card now; a large percentage of people are carrying unbearable amounts of debt. In the past, America was a creditor nation; today, Hilary Clinton goes quietly begging in China while Obama gets on TV and tries to act as though we're so much better than China - "Can you believe that they're beating us at cleantech! Impossible!" (Disclaimer: I voted for him, and attended one of his fundraisers.) I'm not saying this because I want to be some doomsayer fuddy-duddy. I'm saying this because I like the people in this community we have here at HN, and I want to make sure people understand what we're looking at here -- years of economic contraction. You can't spend your way out of a de-leveraging economy, and it is quite dangerous to borrow money and theoretically finance "stimulus" from tax revenues dependent on future rich people who may or many not exist (see: California's economic disaster, wherein they thought the golden era of dotcom millionaires would continue ad infinitum). Thankfully, the online software industry seems to have made some enormous gains in efficiency/automation, and you can now operate enterprise-grade services at extremely low cost. This will allow many of us here to thrive, even in this contracting environment (i.e., I may have 1/3rd the customers I would in 1999, but I'm spending 5% of the money it would have cost to service them). We are in a unique and special place; unfortunately, however, the rest of the economy is in for continual hurt. Also, there are some very smart people questioning whether the golden era of equities is over. What this means is -- yeah, equities had a great run for 60 years, but what if that doesn't actually mean anything? What if the past and the future are completely disconnected? In a world in which young innovators such as ourselves can operate at such low cost, and when Sarbanes Oxley and friends lead most smart people who value their sanity to avoid the public markets, this could certainly be the case. Most equities these days are held by institutional investors, who I can tell you from personal experience tend to be quite moronic (i.e., I begged the top shareholders in Motorola to make some activist moves against the crony executive/board structure there, but they did absolutely nothing - even while watching their equity value dip by 50% or more). A democracy - whether involving citizens or shareholders - only works when people are smart enough to know what to do; if we can learn anything from the idiocy of the past several years, it is that the shareholder democracy is utterly broken, because they were the ones who kept voting in corrupt boards and awarding retarded salaries. Anyone staking their future/kids' futures/etc on these people is a fool whose money will be soon taken from him/her. If I sound slightly pissed at the state of American business/political society today, well... :)

numair 18y ago

A counter to #4: The point that I, and so many like me, keep coming back to is... Every man, woman, child and dog has a credit card now; a large percentage of people are carrying unbearable amounts of debt. In the past, America was a creditor nation; today, Hilary Clinton goes quietly begging in China while Obama gets on TV and tries to act as though we're so much better than China - "Can you believe that they're beating us at cleantech! Impossible!" (Disclaimer: I voted for him, and attended one of his fundraisers.) I'm not saying this because I want to be some doomsayer fuddy-duddy. I'm saying this because I like the people in this community we have here at HN, and I want to make sure people understand what we're looking at here -- years of economic contraction. You can't spend your way out of a de-leveraging economy, and it is quite dangerous to borrow money and theoretically finance "stimulus" from tax revenues dependent on future rich people who may or many not exist (see: California's economic disaster, wherein they thought the golden era of dotcom millionaires would continue ad infinitum). Thankfully, the online software industry seems to have made some enormous gains in efficiency/automation, and you can now operate enterprise-grade services at extremely low cost. This will allow many of us here to thrive, even in this contracting environment (i.e., I may have 1/3rd the customers I would in 1999, but I'm spending 5% of the money it would have cost to service them). We are in a unique and special place; unfortunately, however, the rest of the economy is in for continual hurt. Also, there are some very smart people questioning whether the golden era of equities is over. What this means is -- yeah, equities had a great run for 60 years, but what if that doesn't actually mean anything? What if the past and the future are completely disconnected? In a world in which young innovators such as ourselves can operate at such low cost, and when Sarbanes Oxley and friends lead most smart people who value their sanity to avoid the public markets, this could certainly be the case. Most equities these days are held by institutional investors, who I can tell you from personal experience tend to be quite moronic (i.e., I begged the top shareholders in Motorola to make some activist moves against the crony executive/board structure there, but they did absolutely nothing - even while watching their equity value dip by 50% or more). A democracy - whether involving citizens or shareholders - only works when people are smart enough to know what to do; if we can learn anything from the idiocy of the past several years, it is that the shareholder democracy is utterly broken, because they were the ones who kept voting in corrupt boards and awarding retarded salaries. Anyone staking their future/kids' futures/etc on these people is a fool whose money will be soon taken from him/her. If I sound slightly pissed at the state of American business/political society today, well... :)