As I said before, you should not follow Mr. Market's mood, but explore it. As the market collapsed recently due to credit market crisis, many people got scared and pull market out of the market. They don't even dare to look at the market which they loved and followed everyday just a year ago. But this is the exact time that you should be greedy and look out for opportunities. And that's what Warren Buffet is doing. The news just came out today that Berkshire Hathaway paid $5 billion for a stake in Goldman Sachs. Here are some excerpts from the AP news:
Warren Buffett's Berkshire Hathaway Inc. is investing at least $5 billion in Goldman Sachs, a huge vote of confidence for one of the survivors of the credit crisis that felled two of its investment banking peers.
In addition to buying $5 billion in preferred stock, Berkshire also got warrants to buy another $5 billion in Goldman's common stock. Goldman also said late Tuesday it would raise another $2.5 billion in its own public stock offering.
"Goldman Sachs is an exceptional institution," the chairman and CEO of Berkshire Hathaway said in a news release. "It has an unrivaled global franchise, a proven and deep management team and the intellectual and financial capital to continue its track record of outperformance."
So hopefully we can learn from Warren Buffet: be greedy when others are fearful.
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