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He lost a huge pile on Kraft Heinz, and that was pre-Corona. Didn't yet realize those losses AFAIK. He lost a pile on the airlines and even decided to realize

He lost a huge pile on Kraft Heinz, and that was pre-Corona. Didn't yet realize those losses AFAIK. He lost a pile on the airlines and even decided to realize those losses. He lost a pile on that petroleum company that I forgot the name of, but which crashed and burned recently due to oil prices plunging. He hesitated a long time with tech stocks and lost a lot of money in the last decade due to opportunity cost. His only good bet in that area was Apple, and admittedly that paid off nicely, but even his big stake doesn't compensate for missing out on basically all other tech stocks. Especially since the size of his Apple investment suggests that he played a significant part in raising the Apple stock value, which means that he probably can't pull that out again without depressing the stock price. Bottom line: I think Warren Buffett is overrated. He fails, just like anyone else.

ohashi 6y ago
Didn't he make that bet essentially by saying index funds would beat hedge funds?
- valuearb 6y ago
  He won that bet handily, index funds had roughly 4 times higher returns than the hedge funds.
tguedes 6y ago
Warren Buffet is currently overrated because he doesn't invest in a lot of tech stocks because he claims to not have a complete understanding of the business.If you look at his record from the 70s-90s, you will realize he is the greatest investor ever. We all have our strengths and weaknesses, don't judge a fish on its ability to fly. I think its great that he doesn't invest that much into tech and is very public about it. It influences other people to not invest in every little thing that is popular if they don't understand the business mechanics behind it.
- mrscottson 6y ago
  > Warren Buffet is currently overrated because he doesn't invest in a lot of tech stocks... He's also overrated because of all the insider trading he engages in....he would be a lot poorer if the SEC had the resources/will to investigate his moves.
  - valuearb 6y ago
    Lol, that’s clearly untrue. There is zero evidence he has done any insider trading ever.
    - mrscottson 6y ago
      >Lol, that’s clearly untrue I don't think you know Buffetts track record.
      - valuearb 6y ago
        I know more than you. Have you read both his biographies, his annual investor letters back to mid 70s, and have copies of all his Buffett Partnership letters from the 50s and 60s? His track record and methods are an open book. And have never included insider trading.
- perl4ever 6y ago
  At this point in his life, it seems meaningless to debate whether he's still a good investor. He won't have to live with the consequences of today's choices in twenty years. Neither money nor anything else can benefit him. With no incentives, it doesn't even matter if his ability is intact. In twenty years, his successors will either have run BRK into the ground or overshadowed him and nobody will look back to his final investments. Which he must know.
mxschumacher 6y ago
I believe you would do well in studying the details of the deals you have mentioned before concluding they are failures. Berkshire financed Occidental Petroleum's acquisition of Anadarco by giving $10 bn in cash. In return, BRK received: - $10bn wort of perpetual cumulative preferred shares with a coupon of 8% (e.g. $800m a year). OXY can choose to pay in common shares instead of cash, but in this case Berkshire will get a discount. They have done this for the most recent quarterly dividend payment, since OXY's share price is so depressed, the $200m add up to a sizable position in OXY. If OXY doesn't pay the dividend, the coupon rises to 9% and has to be paid latter. OXY can redeem these shares at 105% of the nominal value in about 10 years. - warrants to purchase 80m common shares until 2030, the strike price is $62.5, so this option is far out of the money. But given the extremely long duration (11 years) it is quite possible that those warrants become extremely valuable over time. Let's wait for a few years and see how Berkshire does on the OXY trade.
- Scoundreller 6y ago
  Ya, IMO, when he beats the market, it's his access to deals that the public can't get and then stamping your celebrity endorsement on it. Maybe in the past there was lots of deep-value out there, but now we have analysts working every strategy. Or squeeze a percent or two of efficiency by taking companies private under 1 umbrella. On average it works out, but it doesn't take many mistakes to sour it.
  - mxschumacher 6y ago
    When Buffett cut cheques to Goldman, GE and Bank of America in the financial crisis of 2009/2010 there were not many other players willing or able to invest billions of dollars. Berkshire might have the most solid balance sheet in the world - they are strong when others are losing their shirt. The source of Berkshire's strong performance was a combination of very good investments (buying American express in 1964) and insurance float, a great credit facility with negative interest rates. Given the size of the private businesses Berkshire owns, it is quite naive to assess the firm purely on stock-picking performance of Buffett. The operating results really matter, producing $25bn+ of operating profits per year isn't too shabby.
drumhead 6y ago
No, I dont think he's overated at all. See the article linked. https://www.barrons.com/articles/berkshire-hathaways-investing-returns-a-breakdown-by-numbers-51582633800 https://www.barrons.com/articles/berkshire-hathaways-investi...
valuearb 6y ago
During the period of all the failures you mention Berkshire is only up around 50%.

ohashi 6y ago

Didn't he make that bet essentially by saying index funds would beat hedge funds?

valuearb 6y ago
He won that bet handily, index funds had roughly 4 times higher returns than the hedge funds.

tguedes 6y ago

Warren Buffet is currently overrated because he doesn't invest in a lot of tech stocks because he claims to not have a complete understanding of the business.If you look at his record from the 70s-90s, you will realize he is the greatest investor ever. We all have our strengths and weaknesses, don't judge a fish on its ability to fly. I think its great that he doesn't invest that much into tech and is very public about it. It influences other people to not invest in every little thing that is popular if they don't understand the business mechanics behind it.

mrscottson 6y ago
> Warren Buffet is currently overrated because he doesn't invest in a lot of tech stocks... He's also overrated because of all the insider trading he engages in....he would be a lot poorer if the SEC had the resources/will to investigate his moves.
- valuearb 6y ago
  Lol, that’s clearly untrue. There is zero evidence he has done any insider trading ever.
  - mrscottson 6y ago
    >Lol, that’s clearly untrue I don't think you know Buffetts track record.
    - valuearb 6y ago
      I know more than you. Have you read both his biographies, his annual investor letters back to mid 70s, and have copies of all his Buffett Partnership letters from the 50s and 60s? His track record and methods are an open book. And have never included insider trading.
perl4ever 6y ago
At this point in his life, it seems meaningless to debate whether he's still a good investor. He won't have to live with the consequences of today's choices in twenty years. Neither money nor anything else can benefit him. With no incentives, it doesn't even matter if his ability is intact. In twenty years, his successors will either have run BRK into the ground or overshadowed him and nobody will look back to his final investments. Which he must know.

mxschumacher 6y ago

I believe you would do well in studying the details of the deals you have mentioned before concluding they are failures. Berkshire financed Occidental Petroleum's acquisition of Anadarco by giving $10 bn in cash. In return, BRK received: - $10bn wort of perpetual cumulative preferred shares with a coupon of 8% (e.g. $800m a year). OXY can choose to pay in common shares instead of cash, but in this case Berkshire will get a discount. They have done this for the most recent quarterly dividend payment, since OXY's share price is so depressed, the $200m add up to a sizable position in OXY. If OXY doesn't pay the dividend, the coupon rises to 9% and has to be paid latter. OXY can redeem these shares at 105% of the nominal value in about 10 years. - warrants to purchase 80m common shares until 2030, the strike price is $62.5, so this option is far out of the money. But given the extremely long duration (11 years) it is quite possible that those warrants become extremely valuable over time. Let's wait for a few years and see how Berkshire does on the OXY trade.

Scoundreller 6y ago
Ya, IMO, when he beats the market, it's his access to deals that the public can't get and then stamping your celebrity endorsement on it. Maybe in the past there was lots of deep-value out there, but now we have analysts working every strategy. Or squeeze a percent or two of efficiency by taking companies private under 1 umbrella. On average it works out, but it doesn't take many mistakes to sour it.
- mxschumacher 6y ago
  When Buffett cut cheques to Goldman, GE and Bank of America in the financial crisis of 2009/2010 there were not many other players willing or able to invest billions of dollars. Berkshire might have the most solid balance sheet in the world - they are strong when others are losing their shirt. The source of Berkshire's strong performance was a combination of very good investments (buying American express in 1964) and insurance float, a great credit facility with negative interest rates. Given the size of the private businesses Berkshire owns, it is quite naive to assess the firm purely on stock-picking performance of Buffett. The operating results really matter, producing $25bn+ of operating profits per year isn't too shabby.

drumhead 6y ago

No, I dont think he's overated at all. See the article linked. https://www.barrons.com/articles/berkshire-hathaways-investing-returns-a-breakdown-by-numbers-51582633800 https://www.barrons.com/articles/berkshire-hathaways-investi...

valuearb 6y ago

During the period of all the failures you mention Berkshire is only up around 50%.