The cooperation with Hugh Hefner made Downing very happy, so that night Downing's ** was high, holding Daniela Bianchi for a long time, but when he was lying on the big bed lazily reading the magazine while resting, an interview with a character in it immediately attracted all his attention. This is an interview with Warren Buffett by Forbes, and the title is sexy: "Look at those pretty chicks in bikinis". In fact, Buffett is not talking about "chicks", but stocks, "I came to my daughter's country like a young man, and now is a good time to invest." ”

When Warren Buffett was interviewed, the Dow Jones index was around 580 points, and I checked it, and the Dow Jones index closed at 583 points on October 4. By October 31, the day before the article was to be published, the stock market had risen to 660 points, a 15% rebound.

The reporter called Buffett and asked: Now that it has risen to 660 points, do you still think the stock market is as sexy as 580 points? Warren Buffett said: I don't know if the index will go up or down next, but the stock market is full of cheap bargains right now.

The reporter hurriedly asked: Since you are so optimistic about the future stock market, which stocks are you buying? Warren Buffett wasn't fooled: "I don't want to sell the stocks I bought. ”

"Can you give a general advice?"

"Buy stocks that are ridiculously undervalued."

"By what measure is underestimation?"

"Net capital, book assets, the intrinsic value of a company as a going concern. At some price points, you're not paying anything for the future value of the company, or even discounting it relative to its current value. If the company surprises you in the future, it will be free for you. ”

The reporter then asked: "But what if the stock market has been depressed and never recognized that a stock is a bargain?" Other words. Even if you buy cheaply, the stock market keeps falling and never goes back? ”

Warren Buffett replied, "I used to ask the same question to my teacher Graham 20 years ago when I was working for him. He just shrugged his shoulders and replied: sooner or later, the stock market will always reflect the intrinsic value of the company. My teacher was right: in the short term, the stock market is a voting machine; In the long term. The stock market is a weighing machine. Now those experts on Wall Street say: this stock is really cheap, but it is not going to rise. This is complete nonsense. The reason why investors who are very successful is because they have always held on to the companies that are very successful. ”

The reporter reminded Warren Buffett: "You are very optimistic about the future, but all the people around you are very unoptimistic, maybe, maybe they know something that you don't know." ”

Warren Buffett immediately retorted: "There is indeed a demographic crisis, a shortage of resources, and nuclear proliferation." But you can't invest based on predictions of mega-disasters. Even if you invest in gold, invest in art collections. In the event of a catastrophe of human annihilation, you are still not immune. I couldn't build a disaster-proof portfolio. But if you only care about the company's earnings, you will find that at the current price, panic, recession, these worries do not affect my investment decisions in the slightest. ”

Warren Buffett finally said, "Now is the time to invest and get rich." ”

At this time, Warren Buffett had not yet won the title of stock god, but those familiar with his legendary experience know that 1974 was the year when he created miracles. Warren Buffett was born in 1930. It was not until 1962 that a "Warren Buffett Partners Ltd." was established, which was the same size as today's small private investment firms.

1968 year. Warren Buffett's stock achieved its best result in history: it grew by 46% while the Dow. The Jones index grew by only 9%. Buffett's funds rose to $100.4 million, of which $25 million belonged to Buffett. When the stock market was triumphant, Warren Buffett informed his partners that he was retiring. Subsequently, he gradually liquidated almost all the shares of Warren Buffett's partners. In June 1969. The stock market took a sharp turn and turned into a crash, and by May 1970 each stock was down 50 percent or more from the beginning of the previous year.

In 1974. To be precise, in December 1973, one of the largest and deepest world economic crises since World War II erupted. What triggered this economic crisis was the rise in oil prices. In October 1973, after the outbreak of the Fourth Middle East War, the price of oil rose from $2.48 to $11.65 per barrel. In an international market where demand is spiraling, the crisis of overproduction erupts when the contraction in demand is suddenly exacerbated by the sharp rise in oil prices.

In fact, Japan was hit even harder by the crisis, because Japan relied on imports for almost all of its oil, and after the sharp rise in oil prices, not only did domestic demand shrink, but also the balance of payments became difficult. Japan's industrial and mining production index fell by 20.6%, far outpacing other industrial producers. Major industrial sectors such as textiles, shipbuilding, automobiles, iron and steel, and construction all saw significant declines in production. In 1974, the total number of bankruptcies in Japan reached a post-war record of 11,738, and in 1975 it exceeded 13,000.

In addition to the oil crisis, the depreciation of the dollar is not unrelated to the crisis. In 1971, due to the rising balance of payments deficit of the United States, and at the same time, the Western foreign exchange market sold a large number of dollars, rushed to buy gold and West German marks, in order to prevent the serious depletion of US gold reserves, the Nixon administration announced that it would suspend the exchange of gold into the United States at the price of $35 per ounce of gold stipulated by the Bretton Woods system; In December of that year, the dollar officially depreciated by 7.8%; In January 1973, a new dollar crisis broke out again, and on February 2, the United States announced a 10% depreciation of the dollar, and in March, Western European countries imposed floating exchange rates on the United States. At this point, the Bretton Woods monetary system, centered on the dollar, collapsed, and the economic crisis affecting the entire Western capitalist countries was about to emerge.

The most terrible thing is that this economic crisis has caused a long period of "stagflation" in the Western capitalist economy. On the one hand, after the crisis, the economic recovery was extremely slow; Inflation, on the other hand, coexists with depression. In the aftermath of the crisis, inflation remained high in developed countries and even continued to rise in the United States, where consumer prices rose by 13.2 per cent annually in 1979.

As a result of the economic crisis, the Dow Jones index plummeted, closing at 1,047 points on January 5, 1973, and reaching a low of 573 points on October 4, 1974, a 45% plunge in 22 months. It is normal for people to be very pessimistic about the future and very afraid of the stock market; Warren Buffett, on the other hand, is very optimistic and abnormal. (To be continued.) )