Why is Warren Buffett Getting Richer?

But one man, at least, is doing what he has always done and what he does best: being greedy when others are afraid (just as he is afraid when others are greedy). That man is none other than Warren Buffet. Check out this eye opening interview with Charlie Rose. This master of contrarian investing has just sunk billions of dollars right back into the stock market--and he expects nothing other than fantastic returns on his money in the coming months or few years. He did exactly the same thing back in 1974 when we last saw a similar market "crisis"--and he was right then and is probably right now. Warren Buffett is the wealthiest man in the United States (he and Bill Gates have been switching back and forth between first and second position for at least a decade now). His current net worth is over $60 billion. Buffett is the chairman of holding company Berkshire Hathaway, Inc. and has made most of his fortune by buying and selling in the stock market.

Buffet's contrarian attitude worksso well that one wonders why most other people don't use it. It has always been used by those who are rich. Rockefeller said the best time to buy stocks is when there is "blood in the streets" (metaphorically, of course).

The trick is to keep a cooler head and, above all, stay disciplined. Buffett has made his fortune by recognizing that most investors are wrong most of the time. This is not cynical; it is reality. Warren Buffett uses the masses' buying trend as a cue to sell; and he uses their selling trend as a cue to buy.

But what he actually buys and sells comes down to careful analysis of a company's fundamentals.

Warren Buffett has said of the current economic state that our economy is an amazing engine, but it needs serious emergency reviving because people are taking their money and metaphorically "putting it in their mattress"--something overly fearful, but something understandable. He has approved of the bailout of the large lenders on Wall Street, but not because he likes government involvement in the market, but rather that SOMETHING had to be done (because of government's interference in the first place). And, while he personally doesn't like the golden parachutes being given out to exiting CEOs, he says it's not the time to lay blame or worry about such things and if it's working to remove incompetent CEOs it's the best thing in the long run.

Buffett's championing of the government's latest involvement in the market certainly is controversial to some very intelligent people. But, he says, the U.S. Treasury is the one institution on the planet that can keep the liquidity in the market--which is the most important thing right now. This is not necessarily a promotion of government deeper into the private market. However, he has also said that the Treasury's $700 billion-plus in bailout money needs to be re-invested into the private market. If this is done, he says, the investor who buys investments like mortgage backed securities secured with the Treasury's money will make a lot of money. Why? Because the US Treasury offers such low lending rates. Again, even in this controversial way, when others are panicking, when there's "blood in the streets"...

This attitude speaks volumes on how he handles risk. I like what the people over at www.eco-focused-mlm.com say about risk. It is exactly Mr. Buffet's approach. Warren Buffett keeps on analyzing, refusing to panic, and ignoring the fears of the masses. Most of all, he keeps on making money!

Mr. Buffett is certainly worth studying. One of the best ways to understand how a man thinks is to observe what he talks about. Here are a few memorable Warren Buffett quotes. They'll help you to understand his underlying thought process.