The common sense of Warren Buffet

The first quarter of 2008 has proved traumatic for investors. In January the market was rattled by the revelation that a fairly junior trader (Jerome Kerviel) had exposed his employer (Societe Generale) to billions of euros of uncovered index positions. Inflationary pressures persisted with oil rising to over $110 per barrel. Price increases were not limited to energy and hard commodities, they also applied to food, which rose 23% per annum in China driving China’s overall inflation rate to 8.7% per annum. To make matters worse an already spooked market witnessed a truly king-size failu...