Little Guys And J.P. Morgan's 2 Billion Dollar Blunder


May 15, 2012

Written by Mary Buffett

The “little guys” have avoided the stock market like the plague since the correction in 2009.  A shame.  If they’d come back, they’d have doubled their money from the bottom.  Instead, they watch as the market creeps higher and higher, traders scream their incomprehensible double speak (see April 11 blog posting “How to Speak Financial News”) and JP Morgan loses $2 billion doing something that sounds suspiciously like what was going on when the housing bubble burst.

A little knowledge is a dangerous thing.

Yes, JP Morgan did something very stupid, but it has more than sufficient capital to withstand its colossal mistake.  This is not a good reason to stay out of the market.  Remember Warren Buffett’s sage advice “Be greedy when others are fearful; be fearful when others are greedy.”

I have spent more than a decade writing about how Warren invests his money.  The information in these eight best-selling books opened the door for those who want to sharpen their pencils and pull out their financial calculators to try to replicate the performance of Warren and his remarkable team.  But let’s face it.  If anyone actually had done as well as Warren, we’d have heard about it by now.   And few have the sheer size of Berkshire to participate in transactions like assisting Coty with the purchase of Avon.

As I’ve spoken on this subject throughout the world, I’ve met many, many people whose lives are full to the brim and can’t squeeze in a nap, much less do their own investment research.

I am now writing for you.

I’ve learned a couple of important things from listening to my readers.

Everybody isn’t a “value” investor like Warren Buffett.

Most people don’t have the time to do their own investing research.  Many want a simple approach to investing that they can understand and do quickly and effectively.

Investing isn’t the only financial issue on people’s minds.  They want a simple explanation for the things they want to know about.

They want someone they can trust to tell them what they need to know.

So, I’m taking a turn from talking exclusively about value investing.  I’m working on a book for you, who want simple answers to the issues in your lives like how to find some money to save, choose your investments, fix your credit, buy a house, pay for college, etc., etc., without paying a fortune to do it.

Here’s the lesson you should be taking from this JP Morgan thing.  Complicated, hard to understand, preposterous, circuitously explained financial blather is useless to you.  Again, remember Warren’s advice, “Invest in what you understand.”

So, now I’m writing a book filled with simple explanations for financial issues that are real, useful and can make your life better.  You can use my new book to lay the groundwork and then come here and get up to the minute research you can actually use.  Thanks to my readers for telling me what they want.

Until next time…

Mary Buffett

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