Warren Buffett Watch's 8 Predictions for '08 - And Beyond
1. Recessions can't be avoided forever. In the last few days, Buffett told our Becky Quick that if unemployment picks up significantly, the "dominoes" will fall and the U.S. economy will fall into recession in 2008. He's not sure, however, that unemployment will go up next year. In fact, he's surprised that all the weakness we're seeing in housing hasn't affected the jobs market ... yet. Here's what he is sure about: "It is the nature of capitalism to periodically have recessions. People overshoot." (He told Becky she's young enough to expect to see 6 or 7 or them.)
2. We'll survive future recessions just as we've survived past problems. As Buffett told us in August, "We've got a wonderful economy... There's never been anything like that in the history of the world. We live seven times better than the people did a century ago on average... We've had problems all along. If you look at the last century, we had that Great Depression and World War Two, we had the Cold War, we had the atomic bomb, but the country does well."
3. Recessions will create opportunities. "I made by far the best buys I've ever made in my lifetime in 1974. And that was a time of great pessimism and the oil shock and stagflation and all those sort of things. But stocks were cheap."
Full Article: CNBC.com
