Warren E. Buffett, the richest man in the world, has a suggestion for the investors in the encircled gloom: ‘Be fearful when others are greedy, and be greedy when others are fearful’.
Predicting the end of the present global recession he has advised us to go for a long-term profit taking advantage of the short-term turmoil.
The idea seems smart, considering you can now get blue chips dirt cheap.
And we can also believe Buffett when he says the crisis is not the end of the road and clouds will pass.
But, have we anything to learn from this bad experience?
I think it is high time for us to identify the difference between risk-taking and recklessness.
Commenting on the neo capitalism that has pulled the world economy into deep red, noted columnist Thomos L. Friedman has said: “ There is a fine line between risk-taking and recklessness. Risk-taking drives innovation; recklessness drives over a cliff. In recent years, we had way too much of the latter. We are paying a huge price for that, and we need a correction.”
Criticising the government intervention into US banking he says: “ We must not overshoot in regulating the markets just because they overshot their risk-taking. That’s what markets do. We need to fix capitalism, not install socialism. Because ultimately, we can’t bail out of this crisis.”
His advice is to install smart regulations and get the government out of the banking business so that the banks can freely and unabashedly get back to their businesses: risk-taking without recklessness.
Sounds some sense no?
