I work with a bunch of dudes from M.I.T. and we will talk about politics and the economy during lunch. They have zero understanding of basic economic theory, yet are smart in their own ways. Many a time the “Warren Buffet says …” statement has been dropped by one or more of them. “Warren Buffet says rich people need to pay higher taxes…” “Warren Buffet’s secretary pays more in taxes than he does…”
So you can imagine the average person out there hears these outlandish and egregious statements and their heads begin to spin.
Even Obama has dropped the “Warren Buffet says…” statement a few times. which IMO is the ultimate in manipulation.
So that’s a reason to hate the guy? He’s obviously a well liked individual that many people feel is pro-America. By Pro-America, I mean he is always talking about the prospects of the United States and seems to be promoter of the growth potential and future success of the country. Not to mention, Buffett is a household name. He is incredibly wealthy and yet not many people see him as an egregiously greedy guy, considering… you know, he’s giving away most of his wealth.
It makes sense that people listen to what he has to say. What, do you expect Buffett to just not share his opinions because he’s such an influencial person? So what if people believe what he says, that’s their choice.
Ha ha you don’t get it. I see you are a level I candidate so your knowledge of economics is probably limited. Warren Buffet is an INVESTOR not an ECONOMIST. There is a huge difference. His opinions are 100% biased. None of anything he says should be even considered as law in this country as there is an enormous conflict of interest.
You realize that he does not pay payroll taxes and has no wage income so when he comes out and says “Taxes need to be higher” none of that will affect him. People don’t understand that. They just hear “rich people need to pay higher taxes” and run with it.
I would love to hear Warren Buffet’s opinion on getting rid of long term capital gains and taxing everything at your ordinary income level. Same thing with dividends. For some strange reason, I don’t think he would have a favorable opinion on that…
What does my standing as a candidate have anything to do with this discussion? Plus you have no idea my background with economics. I’m willing to wager you have much greater exposure, but nothing we are talking about is beyond the scope of my studies or understanding.
You clearly have some strong & weirdly oppressive opinions on the matter, so it probably isn’t worth discussing.
Also, it’s Buffett, not Buffet. Maybe that’s it… we were probably talking about two different people all along.
Dude, Berkshire hasnt paid a dividend in 40+ years and I’m not sure that buffet even realizes any capital gains. All of his money is in unrealized capital gains- he basically pays zero tax. I think he takes about $100k salary, which probably covers the cost of living for his cheap lifestyle and expenses the rest.
He disowned his grandaughter for being in a documentary about the 99%. I’m also pretty sure he had some sort of 30 year friendship/affair with another women who he married after his wife passed.
I dont hate the guy but there’s definetely some odd stuff going on there.
Wow. Just wow. To address some of the points made.
WEB is nothing like Madoff. He has compounded BRK shareholders’ money consistently at about 20% CAGR for the last 40 years (50 or more counting Buffett Partnerships) without any veil of secrecy about his investments. A lot of people have become millionaires thanks to him.
He is a super-genius at valuation and capial allocation. All his holdings are public in about 3 months when he files 13-F. In hindsight, a lot of his moves seem obvious, but when he makes them, he always gets ridiculed. To me that’s a classic sign that his brain sees connections that others can only guess at.
His views on taxes and social justice have nothing to do with his stock picks. He is the most rational investor I know. He doesn’t give a fuck about social justice when investing for BRK shareholders. He has held PTR (China Petrochemicals) when leftists made a stink about human rights record or some such crap. He has held USG with all the asbestos liabilities.
He makes a point of not meddling with the management. At all, even when he could. The most I remember was when he criticized the Kraft CEO for the Cadbury acquisition. As a so-called congolmerate, Berkshire is a complete failure as far as “harvesting synergies” goes. He doesn’t tell CEOs of acquired companies how to run their businesses. There is no centralized HR or payroll.
They way he invest is, he just sits on his ass and reads 10Ks. All day every day. He said he read IBM’s 10Ks for 50 years before he decided to buy it. He is like Bill Gates or Michael Burry (maybe a mild Asperger’s.)
He is mediocre-to-bad at a lot of things, including market timing (he came out in Oct 2008 with an Op-Ed in NYT to buy American equities) (except bridge where he almost won the world championship) . I don’t buy into the folksy wisdom crap either, it’s never actionable. He guards his valuation process zealously, unlike his mentor, Ben Graham.
I find his political views and tax policy immature. That has nothing to do with his investing genius.
The bottom line is, he is the best there is at equity valuation for the long term. So if he says buy American stocks, I’d bet that American stocks will outperform most other asset classes over the next 10-20 years.
Name one stock that Warren Buffett has pumped and dumped.
Name one stock where he took a > 5% position in the BRK portfolio and lost money. (I say >5% because the man is only human and has bought crap like Comdisco and some shoe company in the past. But he has the best insticts on the planet, so when he buys crap he keeps it at a crapshoot level.)
He is the antithesis of insider trading. He has said he would never buy Microsoft even if it offered the biggest margin of safety, because of his relationship with Bill Gates. He fired Sokol when Sokol front-ran the Lubrizol trade.
I challenge you to keep an open mind and read an annual letter from him to shareholders, posted on the Berkshire website. If you feel like name-calling, you can curse me out instead, I don’t mind
But 10Ks is only part of it. I may be wrong, but wasn’t the divergence between Buffett and Grahm the fact Buffett heavily weights management? I guarentee you Buffett gets better information on management than I could get just by the nature of who he is, who he knows, and the opportunities which result.
I honestly think Buffett’s ability comes to being not-very emotional with regards to markets. That seems to be his competitive edge, keeping a cool head and focusing on the long term. I don’t think his magic formula is the only strength he has, nor even the most important. But I could be wrong, I only have a ‘mainstream’ knowledge of the man. I’ve never really studied or read about him other than articles that come up now and then.
You are aware that a stock buyback is a non taxable way to paying a dividend? Just another way to use excess cash flow.
And because Berskshire does not pay a dividend, does not mean they do not benefit from them. A majority of the portfolio is based upon high dividend paying stocks.
Quick Google search gave me this:
"Corporations like Berkshire get to deduct the vast majority of the dividend income they receive from other companies because of something called the “dividend received deduction”, or DRD. The idea is to eliminate triple-taxation for investors and the deductible amount ranges from 70% to 100%, depending on how much of the outstanding stock is owned. Thus, Berkshire’s effective tax rate on dividend income is probably 10% or less."
Buffet isn’t the nice grandpa many people view him as. Blake is - amazingly - mostly right. Warren likes to come across as an everyday guy that just picks good companies to invest in…that anyone could do it. No, they can’t. He gets special treatment the rest of us could only dream of.
A classic example of uncle warren being a douche bag is how he held the banks hostage after the financial crisis. WB takes a huge stake in the banks then goes on TV and tell the world the global financial system will collapse unless the gov’t bails out the banks…the ones he just invested in. The gov’t does so because good ol’ Warren wouldn’t possibly steer them wrong. Buffet makes a killing.
That’s wasn’t genius investing. That was extortion.
Yeah. I’m sure everybody would have liked to be able to get companies like GS to take $5B in 10% preferred stock that Berkshire bought from them. Then get it called at 110 plus all the warrants they got. You gotta hand it to him though, he played that amazingly.
Blake, you’re confusing Warren Buffet the person with Berkshire (a corp) now. I was talking about WB, who owns Berkshire when I made that statement, you’re now talking about Berkshire, which has a portfolio of holdings. All businesses are used as a tax shelter to a certain extent.
I see WB’s investment policy and social policy statements as those of a businessman who understands that he is also a citizen. His approach is to say: “The long-term consequences of the game I play are bad for the little guy, and the system is not optimal; however, as long as it is legal, it doesn’t do anyone any good for me to concede the entire pile of winnings to those who don’t give a darn.”
It is an interesting question as to whether fiduciary duty extends to what your political beliefs are. For example, if you are a fiduciary, would it be wrong to vote for someone that would raise taxes on your clients?
I’ve never seen so much stupidity on a thread. Carry on.
Warren Buffett gets good deals because he has a reputation based on a ridiculously successful career, long before he was famous and before he could get “great deals”. He has a habit of making annoying soundbites, and has a bizarre personal life, but it’s quite irrelevant.
Unless the legendary Blake is generating 30% annual returns in his PA, I retract my statements.
It’s fair to say WB has been top of the pile for a big part of his career. However, 2013 is not the same as 1970. Today, there are more investors, more access to information, more finance literature, etc. I doubt that WB has an advantage any more in analyzing information. There are just too many people who do that today. No - his advantage today is his reputation and ability to influence the media. Is he a piece of crap for taking advantage of this? Of course not. He would be stupid to not use his greatest strength.
