主题：【文摘】巴菲特谈美国地产市场的现状 -- 吴健

http://www.howestreet.com/story.php?ArticleId=1176

May 3 2005

The Oracle of Omaha

The Daily Reckoning

London, England

Tuesday, May 03, 2005

Serious consequences for those involved in the real estate mania... coast-to-coast, the real asset-price bubble looms overhead... Eventually, no one will be able to afford the house they live in... what makes a nation rich is saving - not spending... When all is said and done, China's going to come out ahead... where's the beef?... and more!

Residential real estate is in a bubble. Warren Buffett said so.

"A lot of the psychological well-being of the American public comes from how well they've done with their house over the years," said the Sage of the Plains this weekend. "Certainly, at the high end of the real estate market in some areas, you've seen extraordinary movement...People go crazy in economics periodically, in all kinds of ways. Residential housing has different behavioral characteristics, simply because people live there. But when you get prices increasing faster than the underlying costs, sometimes there can be pretty serious consequences."

"I recently sold a house in Laguna for $3.5 million. It was on about 2,000 square feet of land, maybe a twentieth of an acre, and the house might cost about $500,000 if you wanted to replace it. So the land sold for something like $60 million an acre."

"You have a real asset-price bubble in parts of California and the suburbs of Washington, D.C.," added Charlie Munger.

"I know someone who lives next door to what you would actually call a fairly modest house that just sold for $17 million. There are some very extreme housing price bubbles going on."

Our old friend, Scott Burns, describes California as the "tulip state," where people live in "working stiff houses with fat-cat price tags." He described one modest bungalow that looked like it might be worth $150,000. Nope. Try $900,000, said a neighbor.

Few people in the state can afford to buy the houses they live in, says Scott.

But if they can't, who could? The answer: no one. One of four houses is bought as an "investment." Of course, it's not an investment at all. It's a pure speculation, a gamble that a greater fool will come along with even more money and an even bigger imagination. And maybe he will.

Even the houses bought to live in are often more than the new owners can really afford. They're gambling too...expecting that they can sell whenever they want at a profit. Hardly anyone buys a house expecting to pay for it and pass it on to his heirs. Instead, the house is actively managed - as if it were a stock portfolio...or a sailboat. When interest rates dip, new credit is unfurled...the house is refinanced at a lower rate, often "taking out" a little cash to spend. If rates seem to be going down, even more sailcloth is hoisted...an adjustable rate is selected to catch the favorable wind.

What if rates rise? What if the weather turns bad? We don't know what will happen...but we urge readers to watch from dry land.

Bill Bonner, with more opinions on various matters:

*** The price of gold fell $5.60 yesterday, to $430.50. The ratio of gold, to gold mining stock prices is unusually high. We assume it is mean reverting, like everything else on the planet. Either the price of gold will fall, or the price of gold mining stocks will go up. Our guess - for what it's worth - is that the mining stocks will move up.

*** In the United States, household consumption is 71% of GDP. People think they are getting richer because they have money to spend - borrowed money. But what makes a person (or a nation) rich is not spending - it's NOT spending. We wouldn't think it necessary to say so except that so many people still seem to believe the opposite. They see the GDP numbers as signs of a "healthy, growing" economy. But what is growing in the United States is the very thing that makes the economy unhealthy - consumption. For every dollar of product that the U.S. sells abroad, it buys $1.60 worth of imported items, almost all of it consumer goods.

China, as we all know, is on the opposite side of the planet. Over there, people make the things that we buy and don't buy the things we make. American households are rich and buy a lot. Chinese households are poor and buy little. Americans save little; the Chinese save a lot. Only 42% of Chinese GDP is domestic consumption. Another 35% is devoted to exports. And nearly half of all the money spent in China, according to Stephen Roach, is for fixed investment. (This number seems impossibly large...)

Both economies are preposterously imbalanced. Both will probably fall down and break apart. But when the pieces are picked up, the Chinese will find themselves with the ability to produce wealth - things that people are willing to buy. America will find itself with less money to buy them with...and fewer people willing to provide credit.

*** We dined at one of the great restaurants of Paris last night. We went to Lucas Carton on the Place de la Madeleine.

"Hmmm... I was looking forward to a nice piece of beef," said a colleague, studying the menu. "There doesn't seem to be any be any beef. I don't see a steak or entrecote or anything."

We put the question to the waiter:

"Can't we get an entrecote or a steak?"

"I am very sorry, Monsieur, but the chef does not work with beef."

The Daily Reckoning PRESENTS: Those who went to Berkshire Hathaway's shareholder's meeting expecting a straight-laced event full of serious people would have been in for a surprise. Read on, as Sala Kannan describes the funniest lesson in economics she has ever experienced...

THE ORACLE OF OMAHA

by Sala Kannan

Berkshire's shareholder's meeting, often called Woodstock for capitalists, was absolutely not what I expected. And I witnessed another side to Warren Buffett - his witty sense of humor was refreshingly entertaining.

I waited outside the doors of Omaha's Qwest Center, at 6.30 am, with 200 other Buffett fans. Every year, over 20,000 people from all around the world make this pilgrimage. Devoted shareholders and Buffett groupies flock to Omaha eagerly waiting to soak up everything the oracle has to say.

And why wouldn't they? The $10,000 he invested in Berkshire Hathaway in 1965 would now be worth around $51 million.

Not only is the Berkshire shareholder's meeting the most anticipated event of the year, it is a chance to see two of the funniest men in the field of investment - the wise cracking, lampooning Warren Buffett and his older, hilariously laconic Vice Chairman, Charlie Munger.

The meeting started with a corporate video - a mélange of cartoons, songs and spoofs. All this was masterfully woven into the most impressive sales campaign I've ever seen. Warren Buffett appeared on the screen to talk about the rudiments of a good corporate video. He said something along the lines of, "A good company video should be straight-forward and not full of brand name nonsense."

Then he reached over and cracked open a can of Coke. (Buffett's addiction to Coke is very justifiable. In 1988, he started buying the undervalued stock and eventually invested $1.02 billion into the stock. Within just three years, Buffett's Coca-Cola stock was worth more than the entire value of Berkshire Hathaway itself).

After various other shameless plugs and mentions of every product Buffett's companies make, the video progressed to a talking head on CNBC interviewing Buffett. It was about his decision to buy the underwear company, Fruit of the Loom.

"Mr. Buffet, why did you decide to buy an under-appreciated, under-covered, and under-bought underwear company?" asked the interviewer.

In response, Buffett quipped, "Because Berkshire shareholders won't lose their shorts." Then, Buffett mused about the possibilities of creative advertisement for this company.

"Fruit of the Loom - we cover the asses of the masses."

Buffett joked again about how his Vice Chairman encouraged him to buy the underwear company.

"Warren, we have to get into women's underwear," Buffett said, imitating Munger. He then added, "And he's 78."

With the video portion finished, Warren Buffett and Charlie Munger walked onto the stage. And the world's second-richest man introduced himself.

"I'm Warren, he's Charlie. We work together. We don't have a choice. He can see and I can hear."

The crowd laughed and applauded the introduction. Buffett and Munger have worked together since 1962.

Before taking questions for the next six hours, Buffett said he had just one more thing to say. Berkshire had arranged a shopping event for the audience. All of Buffett's companies had booths.

And Buffett encouraged everyone to shop. "It's good for your digestion." He paused for a minute and then continued:

"Even if shopping is not good for your digestion, it will be good for mine!"

Promptly at lunch break, nearly half the crowd went downstairs to the shopping areas to aid in Buffett's digestion.

At last, the oracle of Omaha was ready to take questions. One of the first questions was why Buffett bought Anheuser, brewer of Budweiser beer. Buffett was quick to joke about it.

He said, "I'm still cracking my Coca-Cola. The meeting might get a bit exciting if I opened a Bud here."

While the audience chuckled, Buffett sipped his Coke. He then pointed out that Anheuser was a business with a durable competitive advantage and that there was no generic label in the beer business.

Buffett then cited some beverage consumption statistics. "Out of the 64 ounces of liquid a person consumes, 11 will be a Coca-Cola product," he said.

Buffett turned to ask Munger, "Charlie, do you have any consumption habits - that you can talk about?"

One question was from a little girl, about ten years old. It was in the form of a poem. "To come here we had to fly, do you think Petro China is at an all-time high? For my future job can I be a taster of See's Candies? My sisters and I will work for free."

Buffett remarked that they bought Petro China at three times earnings and it was a very attractive price. He mentioned that what he liked about the company was the fact that they intend to pay out 45% of their earnings. Buffett owns 1.3% of this Chinese company, and would have bought more had the price not shot up.

Throughout the meeting, Buffett's discipline in investing was obvious. He never buys companies that have shot up in price - he does quite the opposite. To illustrate that fact, Buffett mentioned that the real estate bubble busting would be a good thing for Berkshire, because he could then pick up real estate stocks on the cheap.

He then offered to give the girl who asked the question See's Candies if she came up to him during the break. Buffett bought See's Candies in 1972 for $25 million in cash. A classic example of how Buffett made billions not by investing in technology, but in simple, easy to understand companies.

When asked about compensation committees, Buffett said that they are like Chihuahuas...meaning they are like lap dogs. Then on second thought, Buffett said, "But I don't want to insult those people."

His counterpart barked back, "You're insulting the dogs."

Later, Munger, speaking of the future of America, commented that he was repelled by the lack of virtue in the financial world.

"But what do you think the end will be?" Buffett asked Munger

"Bad."

"I knew I could count on you."

Regards,

Sala Kannan

for The Daily Reckoning

Editor's Note: From India and a graduate of the University of Cambridge, Sala Kannan boasts connections with economists and industry insiders worldwide. An expert on global economic trends, she's especially well versed in developing nations, such as India, Brazil, Argentina and China. Sala's passion for small-cap stocks employs time-tested research methods that bring the best international analysis anywhere.