Buffett's mea culpa and predictions for 2012; Brady bunch finances; tip-toeing into equities; psychological quirks that kill returns; nagging doubts.

Buffett's mea culpa and predictions for 2012; Brady bunch finances; tip-toeing into equities; psychological quirks that kill returns; nagging doubts.

By Amanda Morrall (email)

1) Even Buffett makes bad calls

The oracle of Omaha, in his latest newsletter to Berkshire Hathaway investors, admits he got it wrong. (See AP coverage here). The godfather of value investing predicted that by now the U.S. housing market would have recovered from its slump. Buffett told investors he's still confident the market will come right because the economy can't hold biology back.

I love this line: "People may postpone hitching up during uncertain times, but eventually hormones take over," he wrote. "And while 'doubling-up' may be the initial reaction of some during a recession, living with in-laws can quickly lose its allure."

Buffett is also confident the U.S. economy is repairing itself.

2) Brady Bunch finances

If you think your own finances are complicated as a single, or couple even, try co-mingling them in a blended family scenario.Here's Moneymax's Liz Koh with a note touching on a few of the key considerations and financial hot spots you'll want to explore.

Money Issues for Blended Families

Getting together with a new partner can have its difficulties, especially when there are children from a previous relationship involved. While there are many practical issues to resolve, often the most complex are to do with money.

Decisions need to be made on how best to pay for the household running costs and who has responsibility for expenses relating specifically to individual children. If each partner has a different number of children living in the household should they pay for household expenses such as food and power in different proportions? Should household expenses be paid from a joint account or should each bill be divided in half? Difficulties with paying or receiving child support can cause financial pressures in the relationship.

3) Tip-toeing back into equities

The latest rally in the equities market has financial advisors encouraging investors to wade back into the market.

According to this piece , carried by Reuters.com, while there is reason for optimism, there is still good reason for caution too. Where does that leave the hapless investor? Plagued with doubt I expect.

4) Psychological quirks that destroy investment returns

I'm reading an interesting book at the moment called "The Behaviour Gap" by Carl Richards. The title describes the yawning gap between how investments perform versus the returns investors actually make.

The difference, he argues, is owing to investors jump in and out of the market at all the wrong times given their predictable self-sabotaging reactionary behaviour. On that topic, here's seven psychological quirks from Monevator.com also explaining impulses that undermine returns.

5) Doubt

Doubt is a close cousin of fear. They both dwell inside the mind and pounce at the most inopportune and vulnerable moments.

As personal finance blogger MoneyCrush writes in her latest blog, both can be good, if they inspire change. Kicking doubt to the curb starts with confrontation, action and slow confidence building measures, she writes.

To read other Take Fives by Amanda Morrall click here. You can also follow Amanda on Twitter@amandamorrall

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Warren will be wrong on the recovery call as well. Post the election farce it will all turn to you know what and the deficit blowout on top of the property banking mortgage scam and the export of so many industries to Asia...and the monumental debt mountain...the clue is seeing Timmy the Rat rush off to Europe to tell them how an economy should be run...what a dag.

Supreme stupidity and arrogance to suggest that you know more than Warren Buffet.

It depends upon how much of Buffett's skill is attributable to skill and how much is luck. Probably 80:20 :-)   Successful people often don't survive paridgm shifts very well, as they are too set in the successful ways of the past. It wasn't that long ago the Alan Greenspan was hailed as the finest Fed Chairman of all time, the mighty can fall mighty fast.