I.I.I.

Buffet observes investment themes in three predictable stages:
1) Innovators
2) Imitators
3) Imbeciles

We have now gone full circle. Many of the Imbeciles have been taken out to the wood shed and shot.

When full blown panic reaches the basic money market funds parked in commercial paper and a run on the banks is the topic of the day....after all that has happened.....we are not surprised for the relief rally and government intervention. ...it was way over due....and had the SEC and Fed acted earlier they would no have to own AIG and others now in bankruptcy. But hind sight is always 20 20 especially when dealing with human emotion. This market is still dangerous with month end quarter end positioning and the demise of hedge funds as we know it.....and all things leveraged. No one will ever call the top or bottom in anything.

There are still hundreds of billions of dollars that are in need of rolling over to much higher interest rates at the Private equity shops and commercial banks in leveraged loans. The business plans will not support much higher costs of capital....especially in a slowing economy....

Energy is now under owned (never as cheap) and never more important....this remains our theme....our long term positions in emerging markets will be rewarded over time.

The currently bubble burst is now cash.....as a percent of the GDP or market capitalization has never been higher....and earning less....so it will start to seek reward with measured risk...as people will chase prices much higher after missing the first 30 to 50% moves off the lows this week.

Einstein said to his son, "Life is like riding a bicycle. To keep your balance you must keep moving."

Like investing you have to stay in the game and not get caught in the crowd mentality, dinged by the imbeciles and invest along side the Innovators....that are well capitalized....the first tier market.

Barkly seen here in a spectacular autumn evening years ago.....