The man who has lost £3bn in the recession admits: 'I did some dumb things in 2008'. Warren Buffett, one of America's richest men, has lost £3bn in the recession, it emerged on the first march. Buffett, who started his working life selling fizzy drinks door-to-door, is nicknamed the Sage of Omaha for his legendary financial acumen, but even he cannot escape the carnage.

In his annual letter to shareholders Buffett says investors finished 2008 "bloodied and confused" because of the dysfunctional credit market and other financial turmoil. He says the recent credit boom made many people adopt a creed he used to see on restaurant walls years ago. It read: "In God we trust, all others pay cash." Now, Buffett is certain that "the nation's economy will be in a shambles throughout 2009, and for that matter, probably well beyond".

But he is not entirely gloomy: America has faced bigger challenges in the past, including two world wars and the Great Depression. "America's best days lie ahead," he said.

I found this video today and strongly recommend you sit through it. At 55 minutes it is long but I was so impressed with the common sense that Warren Buffett displays on this issue. Warren Buffett was recently interviewed by Charlie Rose on the current financial crisis. He mentioned that he has never seen (in his adult lifetime) such an amount of fear existing in the market as there is right now.

In this interview, Warren Buffett also shares his views on:
 1. The bailout by the US government and why it was necessary.
 2. His recent investments in Goldman Sachs and General Electric.
 3. The recession that we are currently in and how long it will last.
 4. AIG and why it was too big to be allowed to fail.
 5. The loss of confidence in the credit market and how it will affect the economy.

He is pragmatic, compassionate, decisive and easy to understand.

Just watch it!

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