Well no sooner did I write the last blog titled “Time to Invest,” the mavens came out of the woodwork to confirm my notes. One guru on CNBC even pointed to the portfolio I have built up over the last few months - Bank of America, Citibank, Freddie Mac, and Fannie Mae, as well as the most dead of the “Zombie” Banks, Allied Irish. For spice I also bought The Las Vegas Sands casinos. And they are rocking and rolling.

But none was as impressive as the coments from Jimmy Buffet’s dad Warren at his annual meeting of his investment firm. He too spoke about investing in financial stocks, specifically big banks.

However, Buffet’s most telling comment was, “if it takes a computer or calculator to determine how good a stock is, then I don’t buy it.”

Buffet’s comment speaks to what I have been hammering at since last summer, the “wunderkind” with their “electronic Ouija boards” first built the enormous credit structure that no one fully understood and then tore it down by devaluing the assets they created. They did this under the guise of marking the assets to the “market.” The “mark-to-market” rules were lifted April 2 and we have been steadily improving since then.

People kept telling me, ” Leo how can these sharp young investors be wrong and you be right.” Well Buffet has called them out and they are now exposed as glib charlatans hiding behind the “smoke and mirrors” of their trade. Time to let the old boys use their knowledge of intrinsic value to guide investments.

Leo Cecchini
May 2009