Now Is a Good Time to "Be Greedy"

"I will tell you how to become rich. … Be fearful when others are greedy. Be greedy when others are fearful."
-- Warren Buffett

The most common cause of low prices is pessimism -- sometimes pervasive, sometimes specific to a company or industry. We want to do business in such an environment, not because we like pessimism but because we like the prices it produces. It's optimism that is the enemy of the rational buyer.

-- Warren Buffett

What is Warren doing today?
Now with bearish sentiment again sky high, Buffett has been greedy this year. Not only has he continued to increase his position in railroad Burlington Northern (NYSE: BNI), but he's also taken a fairly sizable position in industrial-equipment maker Ingersoll-Rand (NYSE: IR). He's even bumped up his holding in health insurer UnitedHealth Group (NYSE: UNH) some 7%.

Will those picks work out for him? Given his record, probably.

However, the question you must ask yourself today isn't "What is Warren doing?"

Rather, it's "Am I going to be greedy?"