I’ve been trying to make sense of all the pundits and prognostications about our economy lately. Mostly I’ve suspected two things, which might seem contradictory. First, this is all worse than we might want it to be. We’re only getting started in financial woes. Second, this too shall pass. In another post, I’ll weigh in with my $.02 on the moral implications of all this (short version: our culture is getting a badly needed correction that will ultimately be good for us). Anyway, back to my current topic.
I ran across Warren Buffett’s annual letter to his shareholders today. This is a man I’d listen to over 5 Wall Street Journal columnists, 10 CNN talking heads, or 600 Fox News yappers. The letter, running to 22 pages, is well worth reading. For one thing, it’s funny. Financial wizards are not known for their humor, which makes that all the more delightful. For another thing, Buffett shows a remarkable transparency and honesty about his mistakes. One imagines that if there were more business leaders like him, we might not be in this mess. The letter is also clearly written, shuc that a finance novice like myself can understand it. Mostly though, I think this letter is helpful in terms of its analysis of our present situation and our prognosis.
Amid this bad news, however, never forget that our country has faced far worse travails in the past. In the 20th Century alone, we dealt with two great wars (one of which we initially appeared to be losing); a dozen or so panics and recessions; virulent inflation that led to a 21 1⁄ 2% prime rate in 1980; and the Great Depression of the 1930s, when unemployment ranged between 15% and 25% for many years. America has had no shortage of challenges. Read more »
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