Buffett interview in the FT
A great Warren Buffett interview is available in the FT. It mostly focuses on the difficulty of growing Berkshire Hathaway because of it's already-enormous size. He said there are only 100 companies it could buy that are big enough to make a difference.
"I think that if I was working with $1m or if Charlie [Munger, Berkshire's vice-chair] was working with $1m, we would have no trouble earning 50 per cent a year," he says.
In the meantime, the company has accumulated an astounding $112 billion in cash that it could easily lever for much more equity.
What's the plan? To wait until the market runs into trouble and investors get scared.
"People get smarter but they don't get wiser. They don't get more emotionally stable. All the conditions for extreme overvaluation or undervaluation absolutely exist, the way they did 50 years ago. You can teach all you want to the people, you can tell them to read [Buffett mentor] Ben Graham's book, you can send them to graduate school, but when they're scared, they're scared," he said.
That's truly the number one rule in investing but it's also the toughest to follow. In December as markets were falling, it was the right time to buy risk assets but everywhere you turned the vast majority of analysts were frightened and it's very tough to stand alone against a fearful crowd.
Here are: Three lessons from Warren Buffett for forex traders
