What would Warren Buffett say?

Well, Warren Buffett had plenty to say in an op-ed article in The New York Times Friday, “Buy American. I am.” I was thinking about what he had to say while running over the weekend and again on this chilly fall morning. I also read over the weekend Words That Work, a best-selling book by Dr. Frank Luntz.

Luntz’s book won’t change your life. But for communications professionals it contains some points that most of us know but that our clients and employers rarely let us apply in practice: simplicity matters, use short sentences, credibility is as important as philosophy, consistency matters, on and on. And for those not toiling in the communications vineyard, Luntz shows up regularly these days on talk shows, explaining how important it is to use words to frame political issues. Say international trade, not foreign trade. Say exploring for oil. Not drilling for oil. You get the idea.

Anyway, that’s a gross oversimplification of a thoughtful and insightful book. And his point is this. “It’s not what you say, it’s what other people here.”

That gets me back to Warren Buffett. And George Bush. And Colin Powell.

Buffett may be the world’s most successful investor and business manager. He talks and writes simply and with a considerable measure of common sense. At the same time he has credibility. When he says something, people listen. Here’s what he has to say about the current financial debacle.

The financial world is a mess, both in the United States and abroad. Its problems, moreover, have been leaking into the general economy, and the leaks are now turning into a gusher. In the near term, unemployment will rise, business activity will falter and headlines will continue to be scary.

So … I’ve been buying American stocks. This is my personal account I’m talking about, in which I previously owned nothing but United States government bonds. (This description leaves aside my Berkshire Hathaway holdings, which are all committed to philanthropy.) If prices keep looking attractive, my non-Berkshire net worth will soon be 100 percent in United States equities.

Why?

A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors. To be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions. But fears regarding the long-term prosperity of the nation’s many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now.

A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors. To be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions. But fears regarding the long-term prosperity of the nation’s many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now.

I have no idea whether Buffett is right or wrong. Time will tell. But it is certainly the most positive and reassuring statement that I have heard in a month. And we’ve had plenty of others attempt to be reassuring, including members of Congress, Henry Paulson, Ben Bernanke and George Bush.  Without credibility and believability, Luntz has it right: “It’s now what you say, it’s what people hear.”

Take George Bush.

Just about every time he talks about the economy or the stock market things get worse. Here’s from an article by Richard Wolf in USA Today.

WASHINGTON — President Bush cautioned business leaders Friday not to expect instant results from the government’s “extraordinary response” to the worst financial crisis in more than a half century.

“It took a while for the credit system to freeze up,” Bush told about 300 business representatives at the U.S. Chamber of Commerce headquarters. “It’s going to take a while for the credit system to thaw.”

That was apparent soon after Bush finished his remarks, as the Dow Jones industrial average took another sharp nosedive in early trading. The dip followed by two days a staggering 733-point drop, wedged between equally volatile gains.

Bush spoke as the financial meltdown on Wall Street threatened to envelop Main Street with rising unemployment and declining consumer spending. Most economists now expect a full-fledged recession carrying into next year. The president’s remarks, as always, were intended to help restore confidence in a gradual recovery.

Bush has given pep talks about the economy almost daily since mid-September, when his administration first warned Congress about its imminent collapse. On most days, his words have done little to calm the markets, and Friday was no exception.

I heard the Prez today, oh boy. Sell. Sell. Wait, I digress.

And just so you don’t think it is just me, here’s Gail Collins writing in The New York Times Saturday.

Now is the October of our discontent.

First of all, George W. Bush showed up on TV Friday morning to reassure the nation. What could possibly be worse?

Everybody knows that anything our president says is very likely wrong, and certainly won’t happen. If he announced: “I’m sending government agents to Spokane to arrest the looters,” we would expect that the officials would get lost, nobody would be arrested, and the looters probably never existed in the first place.

So hearts sunk throughout the nation when Bush appeared at a Chamber of Commerce gathering to say that the economy would recover.

“America is the most attractive destination for investors around the globe. America is the home of the most talented and enterprising and creative workers in the world,” said the president, who also insisted that “democratic capitalism remains the greatest system ever devised.”

Which translates into: all the money is going to Asia, nobody will ever get a job again and Karl Marx was right after all.

Bummer.

Bummer — to say the least. Note to W. Give us a break and just go mountain biking until Jan. 20. Our economy — and retirements — may depend on it. Luntz again: “It’s not what you say, it’s what people hear.”

And then there is Colin Powell. His endorsement of Barack Obama yesterday was dramatic enough (apparently) to push Joe the Plumber off the front page and airwaves. For me, Powell used to have a lot of credibility. Once upon a time, in 2003, he went before the United Nations as our Secretary of State. He indicated the world was at risk because Iraq had weapons of mass destruction. And I thought wow. Bush, Cheney and the other neocoms, nah. But Powell. Must be true. Go get ’em guys.

So either Powell was duped — or he was complicit. Either way, what he says now about Obama or anything else doesn’t have quite the luster.

As Frank Luntz might put it: “It’s not what you say, it’s what people hear.”

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s