Way before the financial crisis became a common knowledge, the greatest since the Great Depression, none of the mainstream economists, nor the analysts, nor the Fed actually saw it coming. Not the Chicago School, not the Keynesian, not even Warren Buffett -- I am not sure if you guys actually realise that? Though Buffett had warned us of the enormous risk associated with the securitised debt markets and correctly called it the Financial Weapon of Mass Destruction, Buffett didn't see the crisis coming. As the recession and the greatest financial crisis since 1930s began to unfold, Buffett had been a prominent supporter of bailouts. Some of my closed friends had asked me why is Buffett a proponent of bailouts while great investors such as Jim Rogers was opposing it and sometimes even went as far as calling it stupid and ridiculous on TV interviews. Great economists such as Marc Faber too is a strong opponent of Wall Street bailouts. Readers of bhc investment should have noticed that our views are now showing more and more disagreement with Buffett's. This is one topic that I have been preparing to address.... before traders and investors worldwide realise that Buffett-ism can actually be misleading, when looking through their rear-view windows years down the line. Let me warn you that this will be a radical view that has taken myself some time to develop.
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“In the business world, unfortunately, the rear-view mirror is always clearer than the windshield: A few years back no one linked to the media business -- neither lenders, owners, nor financial analysts -- saw the economic deterioration that was in store for the industry. (But give me a few years and I'll probably convince myself that I did.)”
-- Warren Buffett
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