Greed may be good, but excess is best

I get the feeling that the more people (and Guambats) talk in exasperated and awed terms of this remorseful rise in commodities, the more likely it is to keep on going higher. The more it is said that it is due for a correction, the more the excess begets more excess. It is not momentum anymore; it is a game of chicken.

And while no one has ever dared call him a chicken, Warren Buffett is the epitome of a careful if conservative approach to matters market. He is having none of this dot-commodity boom, the same way he stayed out of the tech boom.

Commenting on the commodities market in general, Buffett said: "What the wise man does at beginning, the fool does in the end... any asset that has a big move based on fundamentals will attract speculators..."

He said his guess was that a lot of activity in "something like copper is speculative on both sides of the market -- you are looking at a market that's responding more to speculative than fundamental forces." (Reuters)

He was also quoted in the London Telegraph with like thoughts:

Mr Buffett also had harsh words for speculators who, like Lord Browne of BP, he blamed for driving up the price of everything from housing to oil and metals.

The commodities bubble in particular, he said, could end badly for investors. "At the start of the party, the punch is flowing, everything's going well, but you know at midnight it's all going to turn into pumpkins and mice," he said.

And the Dow Jones' Marketwatch noted these comments from the Oracle:

"The problem is that, in commodities there are no clocks on the wall," he added.
Berkshire mostly avoids commodity speculation because Buffett said he's "not good at the game of figuring out how far the speculative gains will go."
That means Berkshire won't make as much money as other investors who stay on until "the final 30 days or weeks of a wild orgy," he said, recalling a big investment Berkshire made in silver.
Buffett said Berkshire didn't make any money on his silver investment because he "bought it very early and sold it very early. Other than that, everything I did was perfect."