Warren's Wisdoms - Thoughts on Current Events 4/5/2005
We are not overly concerned about oil prices, in light of the weak dollar (which tends to be self-correcting) and the usual cyclical fluctuations in oil prices. We are always concerned when �futurists� extrapolate into infinity from a series of recent price moves and believe we are near the peak for gasoline prices. Adjusted for inflation, they have only recently moved above the highs experienced during the oil shock of 1978/79.
We continue to be cautious about long bonds because we expect interest rates to move up � albeit slowly. We have increased our weighting in the Floating Rate bond category and have added Convertible Bonds exposure to try to participate in an upward movement in stock prices.
We are moving to reduce exposure in the Small-Cap Value area, but will increase Small-Cap Growth by a like amount, keeping our overall Small-Cap/Large-Cap ratio the same.
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