Big investors eye battered US stocks as prices bottom out

18 October 2008

Big investors are sweeping down on Wall Street to prey on battered stocks as they feel prices have almost bottomed out. Legendary investor Warren Buffett joined some of the prominent investors such as Jeremy Grantham, Bill Ackman, Chris Orndorff and Bob Doll to call for a fresh look at the market as equities have fallen to levels far below their intrinsic value.

Chris Orndorff, principal manager with Payden & Rygel Investment Management in Los Angeles, helps oversee $50 billion in assets, while Grantham is chairman of GMO, an institutional money manager with $120 billion in assets under management.

Now is the time to ''buy a slice of America's future at a marked-down price,'' said Warren Buffett, sounding a vote of confidence to the US stock market.

True to his motto: to be fearful when others are greedy, and be greedy when others are fearful, the Oracle of Obama said he is now buying US stocks with his own money and predicted shares would "substantially" outperform cash over the next decade.

''Most certainly, fear is now widespread, gripping even seasoned investors,'' Buffett wrote in the New York Times.

Buffett, who five years ago said derivatives were ''financial weapons of mass destruction'' again stressed that investors were right to be wary of highly leveraged entities or businesses in weak competitive positions. But, he said, fears over the long-term prospects of sound companies make no sense.