The Sellout Oracle of Omaha defended Goldman Sachs against fraud charges over the weekend during his annual investor conference. The reaction of the 37,000 in attendance? Crickets. Buffett (conveniently) took a $5 billion stake in Goldman days before the government stepped in to save the firm. Lest we forget, he also owns a large stake in Moodys, the company that made the market meltdown possible in the first place. Does Buffett have any credibility any more?
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Do you expect him to call for GS to be punished? he's a shareholder, and a large one too. Not to mention he has warrants to buy GS stock at 115 bucks a year for the next few years. His support is probably quite motivated by his desire to reap the lucrative benefits his investment in GS was structured to deliver.
Plus, I dont really see GS as being in the wrong here. At the end of the day their a market participant with principle investments like everyone else, I'm more than sure ACA and the German bank atleast knew what they were investing in.
I completely agree on both counts. The SEC isn't going to get a conviction on the current fraud charge. But Buffett has gone from being a respected voice in the market to something more akin to a pump-and-dump huckster, in my opinion.
His investment in Goldman Sachs from the very beginning was predicated by his belief that the government would step in to save them, by his own admission. So much for value investing.
Once again, Charlie Munger is the brains of the outfit.
Did you see the CNN special, Blanfein with Fareek Zakaria? (i dont care if you like CNN or not) but when asked about "Market Making" and conflicts of interest, he choked for a good minute, I couldn't believe I was seeing that... seriously... find it online and see how high the BS reeks, it even made GS' CEO choke...
As for Buffet, the guy has lost it... he buys a stock files a 13-F and the market swings to buying it up as well, of course as long as he holds it prices will be inflated... his actions move the market, that's not necessarily value investing...
I know exactly which part you're talking about. I had the same reaction, but on the other hand he knew the question would be asked. I suspect he legitimately needed to have a glass of water. I mean, he must have rehearsed this answer a bunch of times so it's not as if he wasn't expecting it.
Buffet's real successes have come from more mundane matters, and have accrued over many years. The media has built him up as a financial celebrity amongst the subprime fallout, and the public - desperate for a view of what will happen in the short-term - has invested him with too much confidence. People are yearning for a savior or a voice of clarity; there is none.
The point of value investing is that you take an opinion and weather the storm. Ironic that opinion of Buffet - the greatest value investor of all time - should waver based on the events of a few weeks.
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