Investing

Yellen, Warren Buffett , Bill Gates: Low rates pose leverage, bubble risks

  • Last Updated:
  • May 9th, 2015 12:34 am
Tags:
None
[OP]
Deal Fanatic
User avatar
Jul 19, 2003
8133 posts
759 upvotes

Yellen, Warren Buffett , Bill Gates: Low rates pose leverage, bubble risks

credits to jeenyus1 for finding:
http://www.cnbc.com/id/102644941

I'll just buy the dip, not worried.

But, how much weight do you put behind this video? I see worship of Buffett across stock talk forums.
Low interest rates are affecting real estate in a big way, Buffett said. "And you can understand why—you can borrow your money cheaper if you want to finance the thing."

He added, "It's changed the value of real estate dramatically in this country. and it's probably changed stocks pretty dramatically."

Munger said, "I'm deeply suspicious about printing money and throwing it around instead of printing money and building infrastructure and so on."

"Everybody is relying too much on these monetary tricks," he said.

Yellen is now chiming in with a similar tone:
https://finance.yahoo.com/news/feds-yel ... 14995.html
"Federal Reserve Chair Janet Yellen on Wednesday pointed to high valuations in the stock market and said the central bank needs to keep close tabs on the non-bank lending sector."
10 replies
Deal Expert
User avatar
Jun 9, 2003
25154 posts
2330 upvotes
Markham, ON
omg that's genius....this is the first time I've heard of this since 2008.
Penalty Box
Dec 27, 2013
8003 posts
4031 upvotes
Toronto
oh, Gates is a financial guru to now!
Deal Addict
Apr 21, 2012
1276 posts
484 upvotes
Markham
Well, you don't needs to be a financial gurU to be a savvy investor.
with years of experience and read a book per week, you too will become as knowledgeable as William Gates.

Also, these people have been through tons of things and they live to learn. Learning new things each day.

That is why they are there and we are here.
Deal Addict
Apr 21, 2012
1276 posts
484 upvotes
Markham
Jon Lai wrote: Am I the only one who is surprised hearing Bill Gates talk finance?
well, he did started investing in his teens. and he has appeared on TV along with Warren Buffett for the past couple of years talking about economics and investing
Deal Addict
Sep 20, 2014
1180 posts
406 upvotes
Calgary, AB
Well, it is a credible point - cheap money increases the risk of a bubble because it changes the perception of how much someone is actually leveraged. I'd argue the same about real estate here but at the end of the day, it is just an opinion piece. Macroeconomics (or any other financial field) has lots of variables and is hard to predict...Gates and Buffet are just issuing a warning. They aren't saying anything new - just re-issuing a common sense statement.

As for buying the dips - instead of looking at "dips" and "peaks", I prefer looking at things with value. Anything can be a bargain at the right price; you just have to decide what that price is. Once you narrow down on that, dips/peaks don't matter too much. If you think there is more value in a security than what you are paying for, a dip can be a good opportunity but on the flip side, a dip in the market price doesn't necessarily equate to that security being undervalued. Suppose we know the fair price of stock A to be $100. The market price is $250, making the stock overvalued. Next, you have a dip in the market price and it is now trading at $150. Even with a dip in the market price, the stock remains overvalued.

TL;DR: instead of asking the question "will it come back from this dip?", I prefer posing the question "does the dip make the security a better value?"
Banned
Dec 5, 2014
123 posts
58 upvotes
Canada
I just follow one rule of them, Do not pull all the eggs in one Basket.. :)
Member
Aug 13, 2013
218 posts
22 upvotes
Yellen is a fool. The drug dealer worried that there are too many users.
Deal Fanatic
User avatar
Dec 8, 2007
5390 posts
1958 upvotes
kype75 wrote: Yellen is a fool. The drug dealer worried that there are too many users.
"I kill myself while the dealer is eating Japanese food"


Hydropwnics wrote:"TodayHello is a certified hustler and original gangster."

Top