The market didn’t get the memo. Buffett said it’s time to buy. And yet we’re not seeing any market rally, just another ridiculous day, with the Dow oscillating in a couple-hundred point rang, mainly on the down side. Coult it be that The Oracle can’t singlehandedly spur a market rally?
The Economist’s Free Exchange blog theorizes why:
But just how big is Mr Buffett’s target audience? Many of the institutional investors currently selling are doing so to meet margin calls. Many of the hobbyist traders hiding out in cash are unlikely to stick with a plan requiring Buffett’s patience; if anything, they may buy now and sell on the first big surge, increasing volatility. And the truly risk averse out there are probably primarily invested via retirement plans, which they have strong tax incentives not to touch.
I certainly applaud Mr Buffett’s attempt to inject calm and cool into the discussion. But the reason he is able to be as successful as he has been is that so few others have the resources and patience to do as he does.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.