So he didn’t get everything right, so what?
Don’t laugh at Warren Buffett because he made one or two errors. He’s still one of the richest men in the world. So he made some dumb investments in 2008. Didn’t you? Do you think he’s lost it? Think again!
Why go after Buffett?
It’s time to leave him alone. People everywhere are criticizing the guy. Much of the criticism relates to the put options Buffett wrote against four major stock indices, betting that in 15-20 years, stock markets will go up.
People have accused Buffett of hypocrisy for using derivatives, which he has called “financial weapons of mass destruction.” The main types of derivatives are forwards, futures, options, and swaps. What’s more, they think it’s a bad bet.
Let’s put it this way. Even a Quick Payday Loan won’t buy me one single Class B share in Mr. Buffett’s company. They are standing at $2,879.00 each as I write this.
Buffett is working
Warren Buffett gets up every morning and goes to work, just like any other person. He runs a company called Berkshire Hathaway. For the past 40 years this company has compounded its book value by 20% annually, with only two years in which book value declined. It has $24 billion in cash. Are you still laughing?
The thing is, Buffett is no slouch. He’s a very thoughtful guy, far more thoughtful than most of his critics. Maybe they’re harassing Buffett simply to get press, but if so, they should reconsider. Those who are inadequately equipped shouldn’t become flashers.
Buffett is one of the world’s most successful investors. He was ranked by Forbes as the richest person in the world during the first half of 2008, with an estimated net worth of $62 billion, plummeting to $37 billion in early 2009, causing him to slide from #1 to #2 in the Forbes Billionaire List behind Bill Gates, after losing $9 billion more than Gates.
In 1999, Buffett was named the top money manager of the twentieth century in a survey by the Carson Group, ahead of Peter Lynch and John Templeton. In 2007, he was listed among Time’s 100 Most Influential People in the world.
How you should treat Warren Buffett
Treat him as I do – with the utmost respect. I have a picture of him on the wall of my study. I follow everything he says. I watch to see what he buys, but unfortunately I cannot buy the same but here and there I managed a small purchase.
Besides being a great investor and the Money Man of all time, Buffett has some great human qualities. He is modest, so modest in fact that he lives in the same house that he lived in before he made his millions. He is also is a notable philanthropist, having pledged to give away 85% of his fortune, whatever it will be at the time.
The bottom line
So Buffett’s timing was poor once or twice in the past year. So was mine and so was all of ours. We were all in unknown territory. If today someone offers you a deal that will make you billions, it would be a bad strategy to hold out, hoping that they’ll come back tomorrow with a deal that will make you trillions. Buffett didn’t hesitate; he took what he could get when he could get it. I just sat here, turned to stone. How about you?
Okay, so Mr. Buffett made a wrong call – so what? People make mistakes, and always will. This man sounds like a kind, reputable man who has accomplished many things in his life. He has a colorful background. There’s obviously a reason why he’s one of the richest men alive today.
Not everyone can make a profit every year, especially when so much of your net worth is tied in the market. That said, the guy still made a profit for something like 20 years in a row? Even DiMaggio’s hit streak came to an end.