You've probably heard that Warren Buffett has purchased a couple of shares of Goldman Sachs this week. I saw a quote of his that says "Be fearful when others are greedy, and greedy only when others are fearful".
Part of me wants to believe that Mr. Buffett is being patriotic and trying to save our country from an economic mess. Part of me thinks he's doing this because he knows a bargain when he sees one. The truth is probably somewhere in the middle.
I had two thoughts about this:
1) Mr. Buffett has put up $5BILLION (you have to use bold letters for that word) and may put up another $5BILLION. The total bail-out is estimated at $700BILLION. If we can get Mr. Buffet to call 69 of his friends and they all step up to the plate, we'll have this thing licked quickly.
2) Like Mr. Buffett, I recently invested a small amount in a couple of companies. I followed his mentality, I chose companies that I believe are undervalued, companies that I understand the product and companies that I think will be around a while. I don't intend to strike it rich overnight, but won't complain if I do. Like Mr. Buffett, I invested money that I can afford to lose. If he or I either one lose, I don't think we'll go hungry.
Just like Mr. Buffett, if I called all my friends and they invested like me, we'd have this problem licked. I'd have to call a few more friends than Mr. Buffett though.
In fact, if I started calling right now and spoke for only 3 minutes per call, never slept, never stopped calling; If each person that I called then invested the same amount as I did, how long would it take for me to raise the $5BILLION that Mr. Buffett has already raised?
Well, I'd be finished sometime in the year 2027. And that's not including the additional part that Mr. Buffett might invest or his 69 friends.
I'm not sure I have that many friends. If I called them asking them to invest, I don't think I'd keep them for long. But this shows the magnitude of Buffett's Big Bet.