oj-

Of course 1929 was only a correction. Investors only profited by buying low AND selling high. If you were an indexer with a long term, buy and hold bias, you recouped your capital investment in 1954, 25 years later. Investing is work.

You recouped your losses from the worst cataclysm in financial history within twenty-five years even if you didn't alter your strategy at all? Why's that not remarkable?

Good thing all those people who lost money in 1929 were automatically put in stasis and thawed out in 1954. They didn't lose a single dollar then. Or survive on soup kitchens and lard sandwiches, or watch banks go under taking away all their savings, or watch those that survived take away their home. Hell, lucky them, they didn't even have to live through WWII.

As every conservative knows, that 25% unemployment rate was because those people were LAZY. Lazy, lazy, lazy.

Is that true?

I heard the 25-years thing depends a lot on survivorship bias.

9/11 was not the cause of the market meltdown, it just exacerbated a pre-existing condition which began in 2000. The underlying factors causing the market's weakness are not terrorism related, but the structural imbalances of our trade and budget deficits. Those imbalances have only grown since 2000.

If you retired in 1935 or 1940 the recovery of the market in 1954 was of no consolation.

oj-

Your "buy low, buy high" tag reminded me of an analyst with my firm whose comment during the tech bubble was "buy high, buy higher" regarding his strategy toward almost worthless businesses. The folks who followed his advice will never recoup thier losses. Money has a time value, you know. The 25 year period in question was a loser big time, plain and simple.

Robert:

No one retired voluntarily in 1935, did they?

Tom:

Yes, 16 years of it was the Great Depression. We came out of it though.

The market is cyclical in nature. If you stick to real value, and don't go after tech stocks that have never shown a real profit, or for that matter after Turkish tulips, you will make steady gains over the long-term.

That's all Warren Buffett does.

oj-

I meant a loser for most investors.

Tom:

Yes, you lost if you sold. You gained if you just kept buying.

oj-

Buying what, @#!%&.com? You're assuming there were funds available which, in general, there were not.The one exception was for those who sold near the highs and had minimal margin obligations.

Successful investors know the importance of disciplined selling.

You talk like a mutual fund salesman.

Yes, but you don't sell the dips, you buy them.

Bart, Buffett's strategy to only buy great companies at a value means that there are times when he won't buy anything. He likens it to deciding which girl in school he wants to date, then waiting for her to become available.

He's recently stated that there are no good values in the equity markets now. He has been buying silver and foreign currencies.

OJ, I'd call your strategy "faith-based investing". "Profit, I am not worthy to receive you, but only buy the stock, and I shall be wealthy".

Robert:

Of course if it's ever wrong and the market has crashed for good, it won't matter where your money had been because it will all be worthless. Until then, the market never goes down, just corrects.

Mr. Buffet wants John Kerry to win so he's trying to depress the market.

Yeah, that's how he became the most successful investor in history, by letting his politics drive his investment decisions.

No, by telling mugs to stay out of the market while he bought it up. When he tells you to buy he'll be selling.

Actually, he discovered he could buy cash at a discount from businessmen who were so terrorized by Republican policies that they were afraid to reinvest profits.

If your net worth was less than 0 in 1928 -- as it was for many millions thanks to Coolidge Prosperity -- then your net worth from investment in 1954 was probably also 0 or pretty near.

If you had anything at all in 1954, it was whatever surplus over your labor value you had chosen not to consume over the previous 22 or so years.

Orrin's happy scenario also assumes that his investor had no occasion to need to consume anything for 25 years.

That Buffett knows how to evaluate individual companies doesn't mean that he knows how to judge what is good for the country. A President who will bring the troops home and cut defense will perhaps reduce the deficit significantly, reducing interest rates, while strengthening the currency, all good results for Buffett.