Warren Buffett is a dinosaur who should retire

Prefacing this off by saying Warren Buffett is very wise and arguably the most successful and prolific investor of the 20th century. He's given investors so much wisdom and insight over the years and should be celebrated as the GOAT. 
 

However, his style of investing has become outdated and irrelevant, and his success could never be repeated. The main drivers of this are 1) the federal reserve and 2) the absolutely mind-blowing rate of change and innovation which we have now. 

Technology stocks are obviously the future, and we're way past the inflection point for that. Buffett missed the boat for that and does not understand technology well.

"If I taught a class, on my final exam I would take an Internet company & ask, How much is this company worth? Anyone who would answer, I would flunk." - Warren Buffett, 1998

He invested in Apple, yes, great pick obviously, but he also sold off Apple shares when he shouldn't have. His trades for the past few years have been pretty bad (ie panic selling Delta and a $15B write off of Kraft Heinz merger) and he wasted the COVID-19 dip when he could have bought an incredible amount of great companies for an unprecedentedly low price. 

ESG is the future, and we're at the inflection point for that. Buffett is on the wrong side of that (which makes sense, he's made a lot of money on oil companies). Bitcoin and digital assets are the future, and we're at the inflection point for that. Buffett is on the wrong side of that (Bitcoin is rat poison squared), and Charlie Munger is even worse.

"Of course I hate the Bitcoin success," Charlie Munger said at a Berkshire meeting yesterday. "I should say modestly that I think whole damn development is disgusting and contrary to the interests of civilization, and I'll leave the criticism to others."

Buffett is a value investor who was able to thrive in his time, but hasn't tried to leave his comfort zone, and subsequently the returns for Berkshire have gotten left behind as well. It's fine to admit what you don't know, that's wisdom, but actively insulting technology stocks and Bitcoin like Buffett has is arrogant, ignorant, and plain wrong. He's on the wrong side of history now, watching a Berkshire meeting is like watching a 45 year old quarterback struggle to throw the ball more than ten yards in the field. Buffett and Munger should retire, they've been prolific legends of investing, but it's time to pass the torch to new investors who actually understand technology. I'm sure I'll get a bunch of MS for this post, because value investors view Buffett as the Jesus Christ of their religion, but quite frankly, Warren Buffett has become irrelevant and Berkshire will never outpeform while he's still at the helm.

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Comments (125)

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May 2, 2021 - 3:11am

Just because you're worth $100B doesn't mean you shouldn't be subject to criticism. If Elon Musk, the worlds richest man, calls someone a pedophile with no justification because he's mad Thailand didn't use his submarine, or says the pandemic will be over by April 2020 and is just the flu, he can and should be subject to criticism. Buffett's net worth is indicative of his incredible wisdom and legendary performance as a value investor from 1961-2000... but he, just like anyone else, can and should be subject to criticism instead of being revered as a God because of our society's blind worship of wealth 

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May 4, 2021 - 6:25pm

Agreed with you LB, but shouldn't we still use some more deferential language towards WB? Granted you are the former or current Chairman of GS, so maybe you are above him in some ways. But still I would think we should treat every with respect and not call them an animal which is now extinct and effectively tell the guy to retire from his job. Just a thought 

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May 2, 2021 - 3:13am

See, that's flawed though. The media and everyone else treats Warren Buffett as an expert in everything, when his expertise is in value investing with blue chip stocks like Coca Cola and Wells Fargo. He doesn't know jack shit about AI, machine learning, blockchain, robotic process automation, or any of the many catalysts which will shape the future (and subsequent returns of stocks). 

May 5, 2021 - 1:31am

"He doesn't know jack shit about AI, machine learning, blockchain, robotic process automation, or any of the many catalysts which will shape the future (and subsequent returns of stocks)." 

The idea that to be a successful investor, you need to be omnipotent in the four of five hottest technological developments happening at any given time is a ludicrous idea. If anything, sticking to what you know and are comfortable with is even more critical in times of uncertainty and rapid change. You keep admonishing Buffet for missing out on big returns in tech, but the other side of that same coin is that his discipline may have preserved billions of dollars in shareholder value. 

I get that you published this thread to spice up your Sunday, but trying to bust down a dude who made $100 billion investing is an absolute clown take. The dude has no incentive to take risks in new or unproven spaces given the profile of his investors. Albert Pujols is hitting .198 this season, go get laughed out a sports bar trying to tell people he's not an absolute legendary stick.  

And one more thing while I'm here - you aren't the first or last person to jerk off each and every buzzword on p.1 of the WSJ technology section, but the idea that "Technology stocks are obviously the future" and they, along with crytocurrency and ESG, are only viable avenue in which to generate alpha going forward is false. There are plenty of shitty, hollow, debt-laden, uncompetitive, fraudulent, overvalued, moat-less companies in those sectors too. The trash will still be picked up, goods will still be moved across oceans and railroads, crops will be raised, hogs will be slaughtered, buildings will be built, gas will be pumped, ore will be smelted, and astute investors will make money from each and every one of those activities as well. 

May 26, 2021 - 12:47pm

Pizz

He's richer than all of us combined, so he must know what he's talking about imho 

So because he's rich makes him know everything, right? Lol. People say these things based on opinion, not facts. But what I don't understand is how the thread says his style of investing has become outdated and is no longer relevant. I don't even invest, what I do is forex trading, and I also use some pretty good swing trading strategies for trade. So now you're trying to tell me that if I start investing now and proceed with Buffett's method, I won't become successful? If you say yes, I'd strongly disagree. I know that it won't be possible to make that kind of money, but you won't still lose your investment.

May 2, 2021 - 3:22am

There's a difference between Amazon, Google, and pets.com. Dot-com valuations aside, the fact that it took until 2016 to invest in Apple is pretty damning and probably the biggest mistake of buffets career. AND it's been one of his best investments ever and the only reason Berkshire returns haven't been dogshit in the past few years. If he had invested in tech instead of avoiding it, he would have become a trillionaire. 

  • Investment Manager in HF - Other
May 2, 2021 - 11:27am

Or you could say he only invests in what he truly understands. Maybe it has taken him a while to get around to tech, maybe he is slow to pickup on new things in general, but he also hasn't been burned the way many others have. He has a process he trusts, adjusts it (again maybe slowly at times) and hits solid returns. The hard part (which you can point to many people on this) is having enough confidence something will work to actually change your process; get in too early and you ride the momentum but get burned (or it never picks up), too late and you miss the run up (and I'm not just talking about sectors, but fundamental vs quant, etc). At the end of the day, all great managers are wrong a lot, as others have said you need to be more right than wrong (but not by a lot).

You have to believe his whole process won't work going forward, which I don't believe. Could he have had higher returns if he invested in tech sooner? Yes. Could he have invested in crypto and made a ton? Yes. But if he went "all in" on tech in the 90s, or MBS in the housing bubble, etc he would have been wiped out (like many others were). 

May 4, 2021 - 10:15am

Wait what??  We're now criticizing Buffett for not buying and holding AAPL c. 2005?  I don't even get the seed of this argument - you could pick any number of amazing investors and they all have missed some sort of once-in-a-lifetime company.  Evaluating investors with 20/20 hindsight is a pretty fruitless activity.  

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May 2, 2021 - 5:13pm

Being incendiary and triggering outrage is what gets the clicks ;) 

i do believe some of this post but am definitely playing a little devils advocate here to see how the responses play out 

  • Intern in IB-M&A
May 2, 2021 - 7:03am

I think I've read on WSO before that most of Buffet's successful investments can actually be attributed to one of Berkshire's directors or something?

Anyway, down with this boomer.

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May 2, 2021 - 8:52am

Have you read the intelligent investor? I think his philosophy mainly comes from Ben Graham who I think passed away quite some time ago. Warren basically took that philosophy and was influenced a bit by Charlie to move up the quality scale of the business. Maybe Warren can improve a bit by trying to move up the quality scale a bit more who knows. It seems like he/BRK may be doing that. His two PMs, Todd and Ted I think, seem to be more knowledgeable / interested in investing in tech names like Snowflake and the like. It could be that Todd or Ted first got Apple on Warren's radar. Prob also Ajit is a bit more tech-friendly and knowledgeable than Warren and Charlie who basically started out with major investments in Textiles and Newspapers. World changes, they change too but it takes time. I think in 1998 if someone would have said that BRK's biggest investment in 20 years or so would have been Apple, that prob would have been a ridiculous thought. Maybe even Warren himself wouldn't have believed you. BRK and him changed. They may still come around on BTC and crypto and that stuff. Who knows. 

Funniest
  • Prospect in IB-M&A
May 2, 2021 - 9:18am

Alexa, search "signs of market top"

May 2, 2021 - 9:25am

You make some good points, but it's not fair to hold Delta against him. Yeah anybody can look back now and see that it was a bad move, but he didn't have that information when he sold. He had no way of knowing whether they would get that much money, or how long the pandemic would last. I mean you could even say now that the airlines are overvalued and highly risky investments, since it doesn't look like the powers that be will let regular people fly like they used to anymore.

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May 2, 2021 - 10:07am

I think I've heard from more than one PM or senior level guy at major hedge funds that this business is just about trying to be right 51% of the time. That's about it. Obv as long as you size appropriately too. Even if someone is right 80% of the time but if they size their bets way wrong such as going very big on the times they are wrong, they could lose plenty of money

May 2, 2021 - 11:12am

If you believe that fundamental analysis and value investing no longer work, then you are right.  Sure, grow investing has been very popular for a long time but that will change one day. Everyone thought that his style of investing was dead in 1999.  It was not.

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May 2, 2021 - 11:34am

I like the choice of a quote from 1998, when everyone was saying EXACTLY what you are saying today at the time. You've posted on this forum for a while so thought you were older than that, but then the dot com was donkey years ago, fair enough if you don't remember it. The whole point was everybody thought he was wrong and a dinosaur for not putting money in the dot com. Also you mention Amazon and co. Amazon lost 10x its price from market top in the bubble over the next few years. Let that sink in - it took 10 YEARS for Amazon to trade back at pre-dot come levels. 

A top is a top no matter how great the company you are buying. The delta trade makes sense - did you know at the time how long it would take for flying to restart? No. Hindsight is great. Regardless new paradigm bull shit etc... Let's see how it turns out. I am still long and believe this market has some leg to still go, but the reckoning will be painful when inflation kicks in and the US is forced to raise rates, let's see how that turns out, but if not controlled stocks and existing bonds will get decimated - it will be pandemonium and you'd be happy to be in a company at 15 P/E vs 100...

Yea bitcoin etc.. I was an investor in 2013, I like cryptos, but not BTC. BTC is crap - Solana all the way, and potentially ETH if they manage to fork. Warren and co probably don't understand it, correct - but they understand that BTC makes no sense, that doge is a con.

May 2, 2021 - 5:16pm

I don't think airlines are good businesses in the first place, so I wouldn't have bought but selling at a loss was understandable at the time. I think Buffett should've gone in after the crash, not necessarily buy the top of the dot com frenzy, and pick up great companies at a cheap price. Good thing his team has gotten Berkshire into Apple and Snowflake.
 

I'm mainly ETH right now (hold some BTC) and picked up a solana bag a few weeks ago. What do you think about ATOM and DOT?

May 4, 2021 - 4:02pm

I like DOT, it's the reason I got into SOL in the first place tbh. I have some Cardano as well but that's is - the Cardano I have date from 2017/18 and I never sold it. So that's about it. Funny you mention ATOM, a friend of mine recommended I get in it yesterday or two days ago. Supposedly stuck in a range and will break to the top. I lost money just listening to technical advice in the past - don't do it anymore.

However, over 50% of my position is in SOL  - my wife keeps on telling me to sell and just cash in and buy an investment flat or something - I am HODL at the moment, I think this pull back we are having on the NASDAQ is temporary as I just don't understand the trigger except Yellen who said she might raise rates one day in the future?!

Let's see - I still think we are due a major correction but there is no reason for it yet... Will HODL for now

Why did you buy ATOM? I haven't done any research on it

May 4, 2021 - 4:04pm

Bit like Nokia with Apple - the technology is ancient, the problems are rife. They are not fit for purpose any longer. Great for some dinausor money manager who doesn't understand anything, not great if you are betting on the future. It will be taken over and relegated to the manuals of history. It's not powerful and scalable to the point ETH is or new contenders such as SOL 

May 2, 2021 - 1:31pm

Dogecoin is sky-rocketing right now, and people make 10000% return on it. Should we all invest in Dogecoin?

In my opinion, market is just being stupid right now due to young people who don't understand investing, getting money and being able to influence markets. I imagine there are a lot of software engineers in their 20s from Google, Apple, etc. who have a lot of money and don't understand investing, and they probably put their money in Tesla, Bitcoin, ARKK, etc. In reality, Bitcoin is way too volatile too serve as a currency, Tesla has 1000+ P/E and their margin will only go lower due to the introduction of more affordable cars, ARKK combines many unprofitable or barely profitable companies and invests in them at incredibly high valuations, as if every single one of them will become next Apple in 10 years.

Value investing will never be outdated. If you can invest in a company at a reasonable price and the company will generate you a solid return on your investment, how can that be outdated? On the opposite, you can gamble and assume that somebody will buy your bitcoin or Tesla shares at higher prices than you paid, and maybe they will, but there are no fundamentals (i.e. no strong reasons) to believe that, so it's just pure gambling. And you shouldn't compare your casino returns to actual investing returns. Of course, sometimes you can make much more money and much faster at a casino than by investing in good companies at good valuations, but you shouldn't conclude that then you should only go to casino instead of investing.

May 2, 2021 - 2:03pm

I'm afraid that a lot of people have become attached to investing styles like "value investing" or "growth investing".  Value Investing IMO is NOT about looking for a low pe ratio, high dividend yield, and simping for Warren Buffett and following him like Jesus.  I see many people who do that even in the HF space and invest in "value stocks".  Value investing is about finding quality companies that are undervalued regardless if they are in tech or in a boring industry.  

  • Analyst 1 in IB - Ind
May 2, 2021 - 3:39pm

Wait so you are saying that selling an airline in the middle of a pandemic is a bad idea? The market has been pumping for years and we're in the craziest bull market of the era. How do you know the market will not collapse to unimaginable levels tomorrow? Have you talked with "normal" business owners, restaurants and small business owners? People are getting fucked but we're not yet seeing the effects of this pandemic because of the ridiculous liquidity in the market. I am sure that Buffett is just wisely waiting for yet an even better opportunity to buy

May 4, 2021 - 11:15pm

You joke but it's actually wild. Just 10 years ago Northwestern accepted over 21% of applicants now it's around 9%. Heck just 8 years ago UChicago was around 27% acceptance rate and that's around 9% as well. Cornell was above 30% in that same time period and Penn was just over 20% (Penn was over 70% in 1970). In 1992 just about all the Ivies had 20-30% acceptance rates.

I do know Al Gore was in the bottom 50% of his class and got into Harvard with like a 1380 SAT. Also, have you seen Kennedy's Harvard essay? (to be fair, he was a Kennedy though)

Again, I know you joke, but for Buffet to get rejected from Harvard is actually interesting. Not saying he's not a smart guy, because he's clearly doing something right.

  • Developer in RE - Res
May 2, 2021 - 5:15pm

Bitcoin can be "contrary to the interests of civilization" and a good investment at the same time. The first is a question of externalities and the second is a question of ROI to owners. Arguably the same is true of tobacco companies, arms manufacturers, Monsanto, coal-fired power plants, etc. (Choose your preferred example according to your political views.)

Bitcoin is a brilliant technological innovation, and I'm generally bullish on the overall concept of crypto. But Bitcoin specifically has some major social downsides that will persist, and get worse, as its price rises.

One issue is its ludicrous energy consumption. I think most casual crypto boosters haven't even wrapped their minds around how insane it is. According to this, Bitcoin miners currently consume 35% of the electricity consumed by the entire nation of Australia. And the miners will devote more energy to mining as the price goes up, so you're contributing to that phenomenon by buying.

Munger's comment about "extortionists" is true too. A business owner I know was just hit with a ransomware attack where the attackers demanded payment in Bitcoin. Tons of these are happening now.

And the tiny base layer transaction throughput (~5 per second) makes it incapable of being the "electronic cash" envisioned by Satoshi Nakamoto. You could increase throughput by increasing block size and/or speed of block creation, but that would centralize the system, putting control of it in the hands of a few big miners who could conduct a 51% attack. Layer 2 solutions like the Lightning Network haven't taken off, despite years of hype, and there are still fundamental security concerns there.

All that said, could you HODL and make money? Sure. But Munger could still be right.

May 2, 2021 - 5:24pm

See, I agree with you on most of those points, and I don't think Bitcoin is necessarily the future of digital assets, I think Ethereum will eventually flip it and have a much larger TAM. In regards to extortion, what percentage of that is done for USD? Bitcoin isn't even a good platform for crime, because the addresses are identifiable, and a public blockchain shows every transaction that has ever occurred. Most crime, money laundering, etc is done in cash which is a more untraceable way than BTC. Munger clearly doesn't understand that. 
 

in regards to the environmental impact, yeah, that's pretty bad. Same for the transaction speed, Bitcoin is not good for that. I think BTC continues to go up, but proof of stake cryptocurrencies like Ethereum are the future of everything.

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May 2, 2021 - 5:27pm

It terms of being a strong digital asset, Bitcoin may be the closest thing to digital gold out there. ETH is more of a new internet thing. Other tokens do their own things too. Like cardano might be a more environmentally friendly version of ETH. Tons of coins out there with all different goals and stuff

May 2, 2021 - 7:36pm

1. Can you name any other investors with a more "complicated" strategy who are outperforming over the long haul. They might do better in one year, but investing is more about getting more than one crazy pick right. Look at a guy like Bill Ackman, blows up funds sometimes, hard to keep making investments when you're out of money at points. Investing is a lot about opportune time. If you have cash when everything is on sale, its a great time to invest. 

Think about it like football. Buffet is like Brady, steadfast, doesn't have what you would call the physical gifts, but gets it done. Does he throw the most TDs every week, no, but wins games, picks his spots. Take a guy like Lamar Jackson, has all the gifts, you'd prob look at him and wonder how he loses; yet people figure him out. 

2. From the highest level of investing, just think what will be around in 50 years. Do you feel better that Bitcoin (just BTC not some other digital currency) or Coca-Cola will still be around? (its like when cars were first invented, there was ~3,000 car companies, tough to pick the right one) Just think of all the high-flying companies or stocks that crashed. Whats everyone say when it crashes, "if only I invested something more stable...". Take a company like Theranos, Im sure if you invested early you made multiples on paper, then the company wasn't worth the paper it was printed on. 

3. Remember, investing is more an attitude than anything else. Know your companies, know your attitude, know what you don't know. Have to remember, owning stock is owning a business. If all you know is how to produce and sell soda, do you say, fuck this I'm going to start selling electric cars because someone else is making more money? 

May 2, 2021 - 9:43pm

Coke will probably be banned within 50 years, although the company will probably still be around.

Array

May 2, 2021 - 7:41pm

It's totally fine to be a "losing investor" (to the S&P) so long as your customer base knows it. In the case of Warren Buffet it's becoming more and more mainstream that his big miss on tech for the past 3 decades has cost him against SPX + NDX. Interestingly enough, BRK isn't really insulated (except 2008) from larger downswings.

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He's also been quite saved by having a large minority of his portfolio in APPL. In the end its hard outperforming with his size but I suppose people still want the value from the Oracle.

Edit: This is in no way a knock on the old man, just a worthy critique that even the best get it wrong and have a hard time adapting. Everyone loses at some point, even if it's relative.

May 2, 2021 - 8:38pm

I would love to see a chart of Berkshire without Apple and see how bad it has been over the last five years. I don't think it would be realistic for Berkshire to significantly outperform given its size, but still, there are much better places to deploy capital nowadays other than BRKA. I think his investors want to not permanently lose capital and outperform inflation, which it's done, but still underperforming the S&P is a pretty embarrassing.. 

May 2, 2021 - 9:47pm

Lloyd BIankfein

I would love to see a chart of Berkshire without Apple and see how bad it has been over the last five years. 

Yea and I would love to see a chart of Elon Musk's net worth wihtout Tesla and see how bad it would have been...What about if Soros had never shorted the British Pound? Wow what a loser. You can't juste ignore one of the best investments Buffet made and then say he was bad. 

Also, how is underperforming the S&P embarrassing when he outperformed it for 50 years? Buffet has been on record multiple times saying that at this point, Berkshire enormous size makes it pretty much impossible for it to beat the market.

If the Oracle dies tomorrow morning, can you confidently say another manager would do better than him? BRK-A is literally one of the 10 biggest companies in the world, which means even if you find the next MNST or NFLX (1200 baggers over 20 years), you would make something like $100B which is not even 20% of BRK's current value.

Right now, I see Berkshire as a less volatile/safer index fund than the S&P500 (yes with less growth also), with a lottery ticket attached if the conglomerate is ever broken up in a few years/decade after Buffet passes to unlock the value of each indivual business.

May 3, 2021 - 12:04am

I agree with you both, my main gripe with BRK is that they always have an opinion and its taken like gospel. People on here defend him that he sticks to what he knows yet he goes on cnbc and as you mention gives an opinion on crypto. Further really want to dig-in into his track record last twenty years lots of BRK huge wins were "warrants or trading instruments" no other manager on the planet would get a look at.

Just like Elon can get doge to skyrocket on a tweet, BRK gets secret call to look at a one-off deal.

May 4, 2021 - 2:18pm

Tech and internet created a lot of winners. However, the initial batch of companies was huge and many have failed. This chart likely assumes that an investor would have picked the winners that rose to the top over the years

path less traveled

May 2, 2021 - 9:02pm

For the life of me, I'll never fully understand why people follow Buffett for investment advice. YOU can't invest like he does. YOU cannot purchase controlling interest in companies and change the actual direction of companies. I think he's a great investor and businessman; I have never understood why his investment PHILOSOPHY has been so worshipped and followed as it literally cannot be copied by regular people.  

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May 2, 2021 - 9:12pm

Exactly - trying to follow what worked for Buffett in the 1980s will not make you rich in 2021. That's the main problem I have with the value investors and worship of Buffett as a Jesus figure.

May 2, 2021 - 11:28pm

Value investing is still around and a profitable strategy, it just doesn't pose as great of returns or earn much praise anymore. Buffet used to invest when business was simple - all about stewardship and barriers to entry. His biggest winners (Coca-Cola, Geico, etc.) weren't innovative change-makers, they were fundamentally sound businesses with strong profit margins that will generate returns for generations, arguably long after Tesla and Bitcoin.

Tech businesses are more about innovative ideas and less fundamental strategy and operational efficiency. You love growth investing today because the economy is full of excess capital and valuations are only growing. One day, this will stop. On that day, Buffett will destroy us all.

May 3, 2021 - 12:26am

aguafuerte

You love growth investing today because the economy is full of excess capital and valuations are only growing. One day, this will stop. On that day, Buffett will destroy us all.

That is pure cope and that day is never coming, there will never be a "reversion to the mean" in any meaningful way. We live in a different world, where the federal reserve inflates asset prices, and technology disrupts at a staggeringly fast pace. Ethereum has settled $2.3 trillion dollars this year. It's six years old. 

May 2, 2021 - 11:40pm

IMO the key to Buffett's success is that he figured out he could use the float of the insurance companies he owned to buy other companies he perceived as undervalued--basically a form of leverage in the sense that he used other people's money (insurance customers) and didn't even have to pay interest or pay them back. This is why the Director of Insurance investments or whatever his title is was his right-hand man forever and the insurance heads are all likely successors to Buffett and Munger.

Apollo essentially does a very complicated form of this with Athene, except they just force Athene to invest in Apollo funds which then buy companies (that is a very dumbed down version).

May 3, 2021 - 12:46am

Exactly. While this is brilliant stuff, it's also a strategy that common investors can't pursue, which means that his approach to investing should be reviewed in its proper context and not idolized as the way to invest for most people. 

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May 2, 2021 - 11:41pm

Why are you so butt hurt about Buffett?

Who gives a shit about his performance. Clearly the times have changed. What I do find great about buffet is his ability to stick to his strategy and remain consistent and disciplined. He might get burned but most investors don't have his kind of prudence.

It bothers me how people view Buffett as a dinosaur when the way he looks at investing and personal finance is so wise and prescient in a time when people are bragging about investing in doge coin.

For me, it's less about following buffets strategy and stock picks and more about believing in the power of having a long term view and riding out compounding interest.

May 3, 2021 - 12:28am

That's a false dichotomy, it's not just investing in Coca Cola or investing in dogecoin. Clearly respect the guys wisdom and timeless advice, but people shouldn't use him as the high priest for investing advice in 2021 when his advice is... dated

May 2, 2021 - 11:59pm

Does the current rate of innovation mean Buffett is obsolete? Buffett's key value add has always been being a steady steward of capital and Buffett points out given Berkshire's size he expect the company is likely to consistently under-perform the S&P in good years (due to structural tax drags) and he argues they will out-perform in bad years. There are not many companies or peoples with Buffett's record not only of consistent gains, but consistently not losing money and having a steady hand, this is also the point where it is easy to criticize him - inaction is easy to point to as a reason for being obsolete. Perhaps Buffett isn't on the cutting edge of tech, but I don't think he needs to be, his style seems to wait until companies need a bailout or he thinks a company is intrinsically undervalued, you can argue him not getting into tech shows he is a dinosaur, however I don't think Buffett is one to pick the winner of potential disruptors and probably doesn't like the valuations in the tech space.

Expansionary MP and UMP from the fed does make Buffett style investing a lot more difficult. In 08 he was able to make some good plays when liquidity dried up and firms were unable to refinance, this is where he works best. I believe this is what Buffett was hoping to have occurred in 2020 H1, from last years AGM they stated they were starting to get calls from distressed companies, however when the fed announced the liquidity it did, these talks vanished. I don't think this means his investing style is obsolete all together in UMP, but he will have to be patient and wait for the fed to make a mistake - trying to unwind purchases or increase rates may spook the market.

Yes the airline play was a mistake. Bitcoin is contrary to the interest of civilization (the carbon emissions from virtual mining is just silly). I wouldn't expect Buffett to invest in Bitcoin and even if Bitcoin is the future, I do not think that justifies buying Bitcoin, especially not at any price. I would say crypto is a bubble, it is ridiculous right now, particularly alt coins. Once again, saying "ESG is the future" doesn't justify paying any price in the sake of ESG. Buffett's investing style very much gets governance right in my mind, his approach of not investing with a CEO/manager he wouldn't trust marrying his daughter or carrying out his will is the highest threshold. As for environmental and social impacts of companies, I don't think Buffett is a pioneer, he seems to take the safe approach of doing what the average person thinks is right, I remember a quote from Barbarians at the Gate which Buffett said although he loved tobacco companies as an investment, he was rich enough to skip the opportunity so he wouldn't have to live with the public vilification, so I would say your criticism here is partially fair, but I think Buffett is good at sitting in the middle so I don't think he will be caught "on the wrong side".

Overall I think your criticism is mostly fair but also overblown. Buffett style investing isn't dead, given Berkshire's size it is incredibly difficult to outperform the S&P and Buffett states this isn't their aim. I am excited to see what Abel and Ajit do and am not concerned about succession, but I don't think Buffett should retire because he is still a good capital allocator while he is still adapting and not making structural errors, for instance although he didn't make any great investments 2020 H1, he did repurchase shares and issue debt at near 0 rates which were both good moves. The airline play did concern me though.

May 3, 2021 - 9:59am

>ESG is the future, and we're at the inflection point for that.

No, ESG is essentially a scam set up by global technocrats to rob tax-payers to pay mega-corps 

>Bitcoin and digital assets are the future, and we're at the inflection point for that. Buffett is on the wrong side of that (Bitcoin is rat poison squared)

Yeah, sure, "digital artwork" created by a shadowy consortium (that hold most of the coins) that relies on Chinese mining is the future? Sure Jan.

but quite frankly, Warren Buffett has become irrelevant and Berkshire will never outpeform while he's still at the helm.

When you build one of the largest companies in the world, you can talk. For now, sit down son. You clearly have no idea what Berkshire Hathaway does or how it makes money. 

May 3, 2021 - 5:06pm

IMO what Buffet misses is the fact that basically every single sector of the global economy is being disrupted by tech. What is 'tech' nowadays?

Is Tesla tech? Sure, but also an automaker and autonomous tech provider.
Is Apple tech? Sure, but first and foremost a consumer brand.
Is Amazon tech? Yeah, but also a horizontal giant integrating everything from ecommerce to cloud. 

Tech stocks are flying high, but maybe they're flying high because that's what actually drives the world? Someone here said that Buffet just invests in stuff he understands. Fair enough. Then why going on TV and bashing crypto? He is not a literal oracle. He clearly doesn't get bitcoin, so how about taking your own advice here?

Buffet is an amazing investor with tons of business acumen, no doubt here. To manage (and grow) such a huge vehicle as BRKA takes a tremendous skill. Times changed though. Software is eating the world and I'd venture to say this is not a bubble - this is how the global economy functions now.

  • Associate Director in RE - Comm
May 4, 2021 - 6:06pm

Why are most people under the opinion that Warren Buffett "missed". Hindsight is 20/20 and there hasn't been a real financial crash since 2008. From a financial theory basis, high beta stocks out perform low beta stocks over time and in hotter markets. We have been steadily growing since 2008, so it makes sense that Tech stocks are outperforming. Many tech firms aren't really profitable today. You'd expect those to get hit hard by potential future recessions.

Imagine what would happen to Tesla if we hit a deep recession in 2022. Their entire "profit" comes from bitcoin appreciation and selling carbon emissions credits. Crypto is still not widely used in practical applications and is valued to the moon. Tesla's vehicles are very nice but not the cheapest in the market thus becoming discretionary. Both could come crashing down with a future recession (barring the new precedent for fiscal stimulus). 

May 4, 2021 - 6:10pm

Berkshire has a beta of 0.9 though - it's not even that safe. Costco has a beta of 0.65 and has overperformed BRK.A by 55% over the past 5 years. Profitability doesn't mean shit nowadays, the federal reserve prints unlimited money, stimulus is a guarantee for the next recession, and valuations will go up regardless. Fundamentals have never mattered less. And Tesla is more likely to go to ten million cars a year than zero at this point.

May 4, 2021 - 6:32pm

DOOOD YOU DONT HAVE YOUR PORTFOLIO IN BITCOIN OR TESLA YOURE A DINOSAUR

You clowns are the reason he keeps beating you.  Because you blindly follow trends and ignore undervalued but good companies.  Go back to Robinhood buddy

May 4, 2021 - 10:59pm

Drumpfy

he keeps beating you.  Because you blindly follow trends and ignore undervalued but good companies.  Go back to Robinhood buddy

If you own the S&P 500, you're beating Buffett. If you own the Nasdaq, you're obliterating him. Undervalued but good companies stopped existing twenty years ago, equities are almost never mispriced

May 5, 2021 - 5:05am

In the 11 years since the end of 2009 until the end of 2020, Berkshire has performed better than the S&P 500 in seven of them. Up until the end of 2018, it had marginally outperformed the index. It has only been in the past two years since tech stocks have surged in value that Berkshire has lagged.

Does your tiny brain know anything other than the recent tech boom?

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