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Warren Buffett's Wealth More Consistent Than Words

If it's the case that even people as smart as Sir Isaac Newton and Warren Buffett are useless to investors as market prognosticators, then why do the financial headlines scream with every minor word of confidence that Warren Buffett offers on the U.S. economy? Especially when a week later he chops those words up, and reissues them as a less enthusiastic view of a minor economy recovery.

By Buffett's own words, neither he, Isaac Newton, NBER, or anyone else can claim to see such events before they happen, so maybe we should stop following Buffett's never-ending whistle-stop tour of comments about when and where and by how many carpets the U.S. economy will recover.

It seems there are only two cases in which Buffett is showing real consistency recently, making more money than any other American and selling shares of Moody's. The Forbes 400 -- the list of the 400 Richest Americans -- was just issued for 2010, and Buffett is again No. 2 behind Bill Gates, with an estimated net worth of $45 billion.


A little bit of that wealth has come from Buffett's big stake in Moody's, and that's his other recent show of consistency. After selling 1.3 million shares of Moody's concurrent with his comments on the economy in Montana, Berkshire Hathaway has followed up on that sale by unloading another 560,000 shares of Moody's, a sale that was filed with the SEC late on Wednesday.

There is too much back-and-forth in the latest "I've got your back, U.S. economy" comments from Buffett. So if there is anything that investors should be doing based on Buffett's words, maybe it should be limited to checking to see if there is any Moody's left in the personal portfolio, and hoping some of that wealth from the Forbes 400 -- which increased 8% this year -- trickles down to those Americans still living through the recession Buffett says the country is still stuck in.

--Written by Eric Rosenbaum in New York.



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