Warren Buffett expresses support for American stocks

Billionaire investor and world's richest man (as per latest valuations) Warren Buffett has folowed his own investment philosophy: ''Be fearful when others are greedy, be greedy when others are fearful.'' Now he is demonstrating even more belief in this axiom by pouring billions of dollars into American stocks.

Buffett sent out a clear message of his intentions with an opinion piece published in the New York Times on Friday, titled "Buy American. I Am." Calling for confidence in US business, something in short supply after the credit crisis spiralled into something resembling a market crash, Buffet said he's buying American stocks and, if prices stay attractive, his personal investments, as distinct from his stake in Berkshire Hathaway Inc., will soon be wholly in American equities.

Not that Buffett needed a published article to signal his intentions. The recent past has been prime hunting season for Buffett, long famed for seeking high-quality investments at bargain prices. On 24 September he agreed to invest as much as $10 billion in Goldman Sachs as part of its capital-raising efforts. (See: Warren Buffett invests $5 billion in Goldman Sachs) a week after his MidAmerican Energy Co. decided to acquire Constellation Energy Group for $4.7 billion in cash on 18 September, a discount of nearly 60 per cent from levels at which the ailing power firm's shares were trading two days prior to the deal (See: Warren Buffett's MidAmerican Energy bids $4.7 billion for Constellation Energy)

Late last month, a Berkshire Hathaway Inc. subsidiary said it had acquired a 10-per cent stake in the firm BYD Co., a Chinese producer of rechargeable batteries, electric cars and car parts. (See: Warren Buffett moves into electric car market with $231 million investment in Chinese firm BYD)

He has also put in big money in conglomerate GE in a five-year deal, according to which his investment vehicle Berkshire Hathaway will buy $3 billion of GE's preferred stock at a guaranteed 10-per cent dividend that are callable by 2011. It further gives Berkshire warrants to purchase $3 billion of GE's common stock at a strike price of $22.25 a share. The warrants can be exercised anytime through 2013. (See: Warren Buffett invests $3 billion in GE's $15-billion capital raising)

Exaggerated concern about the long-term prosperity of financially secure US companies is foolish, and most probably will be setting profit records in years to come, Buffett said.

While short-term stock movements can't be foretold, the likelihood is that the market will recover before the economy or general investor sentiment rebound, and ``if you wait for the robins, spring will be over,'' he said.

Referring to the 1930s Depression, Buffett pointed out that the Dow Jones Industrial Average reached its lowest point on 8 July 1932; economic conditions continued to deteriorate until Franklin D Roosevelt became president in March 1933, and by that time the market had climbed 30 per cent.

Bad news, Buffett wrote, is an investor's best friend, because it enables the purchase of ''a slice of America's future at a marked-down price.''