He was two years early and now he might be two years late. His facts were right. His timing was off, and I think if you wait for the illustrious NYU professor Nouriel Roubini to give the "all clear sign" you will miss even more of the market upside than you have missed already.
On February 18 of this year I wrote Buffett says buy, then sells, Roubini says wait -- what's an investor to do? -- and it will make interesting reading today. After all it was about three weeks before the market really hit bottom, and I called that, too, posting on March 9: Nostradamus was a punk! Have we reached bottom? -- a lucky call for sure. However, the number of folks thinking the world was coming to an end seemed like the ultimate capitulation.
A month ago my colleague Melly Alazraki posted Roubini Sees Market Correction Ahead but last week he was softening his tune suggesting the market would still take a couple of years of healing, but that the recession might be over in as soon as five months.
Guess what? By then it will be too late. By then you will have watched the market climb back up the ridge it fell off of last year. It is not that Professor Roubini does not have a firm grasp of economics, financial management, corporate mismanagement, global markets and more -- it is that he makes his living by talking and writing while 'my pal Warren' makes his by investing -- and taking risk!
College professors often choose the life of an academic to avoid risk. All of Roubini's theories can only result in a profit if he takes a chance. I would like to know why he did not make a fortune during the past few years shorting financial institutions? The reason is his convictions only go so far.
Through the three decades that I have been investing, I have read on numerous occasions that Buffett has lost his touch. This was the case ten years ago just prior to the tech bubble bursting when Berkshire Hathaway (NYSE: BRK.A) was trading around $30,000 per share (it's $95,000 today even after a 40% drop!) and then again a few months ago when the market hit bottom.
Roubini is knowledgeable and worth listening to, but Buffett is still the man, and when he said to buy last October on people's fear and stayed the course all the way through to last week -- that would have made you money.
Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I own shares of BRK.B.