MARKET COMMENT
Buffett Laughs Last

By Bruce Jackson (TMFGoogly)
December 19, 2000

As the technology stock carnage has gained momentum, the switch into so-called value stocks has also gained momentum. That's a symptom of the typical herd behaviour of the stock market, always chasing the latest trend.

The switch to value has been happening most of this year, slowly but surely. It was even happening prior to March, when the market was chasing anything Internet-related into the stratosphere. It's just that most investors didn't notice it, because they were too fixated on piling into the next latest e-IPO, or the next "old economy" company to rush out any old Internet strategy.

It's obvious now, but value was always going to be the winner. When you think of value investors, you think of Warren Buffett. On March 1st 2000, when Buffett's annual letter to shareholders of Berkshire Hathaway (NYSE: BRK.A) was written, people were writing his investing obituary. That was at the height of the tech boom, and because Buffett refused to invest in these companies, many thought he was too old and doomed to the investing scrap heap.

His Berkshire Hathaway shares are up over 50% since his annual letter was written. Throughout the year, Buffett has also slowly but surely acquiring cheap companies, as he's always done. As usual, Buffett is having the last laugh.

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