When Buffet dies I guess we're all in trouble. Nobody can explain this stuff except him. (end sarcasm)
Warren Buffet is interviewed about the credit crisis on CNBC. You can read some excerpts here: http://mathoda.com/archives/433
One quote I'd like to point out:
Beware of geeks with clever computer models: “I mean they had all these types from Wall Street, you know, and they had advanced degrees, and they look very alert, and they came with these — they came with these things that said gamma and alpha and sigma and all that. And all I can say is beware of geeks, you know, bearing formulas.”
Computer models will be the undoing of us all. Black–Scholes keeps coming back to haunt us even after Scholes and Merton were disgraced and just about caused the collapse of the financial system themselves.
Yet, we're told the main evidence for global warming is also computer models. I've got a news flash. It's called GIGO. Garbage In, Garbage Out. Comptuers are easy to lie to. You don't have even look them in the eye.
Common sense investing should protect us from the reach of fortune as much as possible. Markets will rise and fall and rise and fall. Is your boat (money) in a safe harbor (Cd's, bonds, savings) or is it riding the waves and shaking it's fist at the gods.
Diversification is the key. Your holdings in the stock market should probably be a minority percentage of your overall wealth. Or you could believe Wall Street. They've got risk covered. Err, wait, no they don't. They don't have a f*cking clue what their doing.
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[...] don't have to be Warren Buffet. You just need common sense. Invest safely and wisely. Save as much as you can. Don't spend [...]
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