Warren Buffett says now is the time to get into American equities:
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.
But one of my new favorite blogs, aptly titled “DOW WTF?!,” said a few weeks ago that there might be a ticking time bomb waiting for the market next April, citing a Business Week article from June:
…the next wave of foreclosures will begin accelerating in April, 2009. What that means is that hundreds of thousands of borrowers who took out so-called option adjustable-rate mortgages (ARMs) will begin to see their monthly payments skyrocket as they reset. About a million borrowers have option ARMs, but only a fraction have already fallen due.
But today, DOW WTF?! says:
But if Buffet moves in, and does so publicly, and everyone else does too, then screw April, this could be the bottom.