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One of the wisest and most successful investors in the world is betting on recovery for the American property market.
Overseas media have been frequently speaking with, and writing about, Warren Buffett over the last six months. The UK Telegraph released an article in early November saying that Buffett was putting his money where his mouth was, and doing investing of his own. “While Mr. Buffett is not infallible,” they wrote, “he clearly knows that the first step towards making a profit is to buy low.”
Just a month prior, Buffett gave a talk on value investing to MBA students at the Richard Ivey School of Business in Ontario, Canada. He spoke about how he couldn’t understand why more people didn’t adopt his investment strategy, noting that, “value investors are not concerned with getting rich tomorrow. People who want to get rich quickly will not get rich at all. There is nothing wrong with getting rich slowly.”
Time and time again, Buffett has proven this sentiment, taking risks and reaping exceptional rewards; now is not expected to be any different. In an interview with CNBC, he said that he “sees clear signs that the global economy is slowing, although the U.S. economy is inching ahead as others decline.” He continued by explaining that while the American economy will not truly start to turn around until the housing market improves, things had certainly started to shift. “I’m salivating,” he told CNBC, referring to his desire to spend some of Berkshire Hathaway’s money on a deal.
The result of this was a joint venture with Brookfield Asset Management, whereby Buffett purchased a majority stake in a U.S. estate agent, as well as other property related ventures. He’s ‘leading the way back into property investment’, wrote one UK journalist. Berkshire Hathaway Home Services is expected to be in full swing early this year.
Fortunately, many opportunities still exist for overseas investors too. However, just after the New Year one American Chief Economist commented, “With home price indices hitting bottom in 2012 and pointing to higher property values, the regime of affordable housing is about to end.” How quickly that will come about cannot be guaranteed, but for those interested in property investment, waiting might not be the best option.