After the Party's Over, It's Time to Invest
Use history as your guide to profit from today's great growth companies.
After a bubble bursts, investors can sometimes behave irrationally and ignore some very attractive bargains for fear of losing their shirts again. As value investors, we like to think that we have both the temperament and good judgment to recognize and profit from these opportunities.
One of my favorite quotes from last May's Berkshire Hathaway (BRK.B) annual meeting was when a shareholder asked Warren Buffett and his partner Charlie Munger about the potential for a bubble in the commodity markets. Buffett used Cinderella to illustrate his viewpoint. While he applied this analogy to commodities and the price of copper, I think it applies to a speculative bubble in any asset class.
Justin Fuller has a position in the following securities mentioned above: DELL, MSFT, GE. Find out about Morningstar’s editorial policies.