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Great to see Warren Buffett buying here. Fabulous. He has a lot of firepower. He is right to buy American. And I want to go with him, except, he's been buying for awhile, and, more important, he can be down 20% to 30% and it doesn't matter.

Buffett emphasizes over and over again that he can't time the market. Over and over again, he makes the point that he is in it for the long term.

So let's play it out. Buffett's like the casino. He's the house. He can take an endless beating. Endless. He is adamant that he can't predict the short term.

So, let's do the math. Let's say he is as wrong in these new buys as he was in his General Electric ( GE) buy a few weeks ago. If you use, for the sake of argument, the allegedly controversial call I made when the Dow was at 10,000 that you need to take as much money out of the market as you may need for a big purchase in the next five years, you will need to gain 37% in your stocks to get back to even. Thirty-seven percent.

Do you think that you will be able to make that back? Maybe if you are the house, like Buffett, maybe if you have a long-term time frame.

But that was never my point. My point was that, if you need that money in the short term, it is better not to have it in the market.

Most people invest in the stock market for an augmentation of their paycheck so that they can make it easier for a big purchase, a car, a house, tuition, retirement.

If you could sidestep a decline that would require your portfolio to rise 37% to get back to even, is that prudent or is that reckless? If you know that you have to put your kid through college with a 529 plan but it will require a major comeback to make it so you have the money, don't you think you need the five years to get back there? That's a big move, especially considering that the S&P 500 has made you nothing over the past 10 years.

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