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Buffet: "A century from now the 400 million acres of farmland will have produced staggering amounts of corn, wheat, cotton, and other crops -- and will continue

Buffet: "A century from now the 400 million acres of farmland will have produced staggering amounts of corn, wheat, cotton, and other crops -- and will continue to produce that valuable bounty, whatever the currency may be." Buffet implicitly rejects global warming here, specifically the latest projections on drought: http://earlywarn.blogspot.com/2012/01/another-terrifying-drought-paper.html http://earlywarn.blogspot.com/2012/01/another-terrifying-dro... and others.

MikeCapone 15y ago
I don't think he's rejecting anything, just making a general point about investing in something with cashflow (a business, farmland) vs speculating in something that is only worth what others will pay for it (gold, commodities)
- spenrose 15y ago
  Did you follow the link? Buffet's recommendation comes with a long time horizon, and the asserion that he can predict stability: "Whether the currency a century from now is based on gold, seashells, shark teeth, or a piece of paper (as today), people will be willing to exchange a couple of minutes of their daily labor for a Coca-Cola or some See's peanut brittle." I think he's right about people, but in the statement he is also implicitly asserting that peanuts will be a cheap commodity in 100 years. That rejects our best projections regarding climate change. The much more important implicit assertion I quoted in the downvoted post (thanks guys) is that you can buy productive farmland now that will be productive in a century. That will only be generally true if climate change does not happen.
  - Czarnian 15y ago
    I'd be willing to bet that when he wrote that sentence, global warming was one of the furthest things from his mind. Even so, I'm pretty sure Warren Buffett is a businessman, not a climate scientist. It's called the Appeal to False Authority, look it up.
  - MikeCapone 15y ago
    I've been following Buffett for a long time. I've read all of the BErkshire letters and most of the partnership letters. I've read 2 biographies of him and watched and read dozens of interviews. He was making a general abstract point, not a specific prediction. That's just the way he talks, and maybe it could be confusing if you are not used to it, but that still what it is. And btw, MidAmerican Energy, a Berkshire owned utility, is the biggest investor in wind power in the US and just bought huge solar power projects.
delinka 15y ago
You seem to implicitly reject the human ability to adapt. We'll find a way to adapt to the changing environment. Hell, we might even adapt our habits (ha!) and allow the environment to correct itself. Regardless of the plausibility of global warming, 400 million acres of farmland will still produce more value in crops than you could shake your investment stick at.
- spenrose 15y ago
  No, I read very smart people who try to analyze what it would take to adapt, and they range from deeply concerned to terrified. Start here: http://physics.ucsd.edu/do-the-math/2011/10/the-energy-trap/ or here: http://earlywarn.blogspot.com/
tomjen3 15y ago
Honestly (and regardless of the actual value of global warming) the projections have changed so much and are so impossible to nail down exactly that they might as well be read in tea leafs. And if we get draught, what do you think the farmers will do? irregate their fields.
- spenrose 15y ago
  For "changed" please substitute "have gotten more specific, more grim, and better corroborated." WRT irrigation, we lack enough water now on a global scale.
  - tsotha 15y ago
    >For "changed" please substitute "have gotten more specific, more grim, and better corroborated." That's not true at all. If anything the last decade has shown the data and models are woefully inadequate for prediction.
argv_empty 15y ago
Global warming is a red herring here. No matter how hard food production gets, it will remain a value-creating activity as long as there are people (if you don't believe me, then stop eating).
hnal943 15y ago
So you believe global warming is going to end life as we know it. How does that change your investment strategy?

MikeCapone 15y ago

I don't think he's rejecting anything, just making a general point about investing in something with cashflow (a business, farmland) vs speculating in something that is only worth what others will pay for it (gold, commodities)

spenrose 15y ago
Did you follow the link? Buffet's recommendation comes with a long time horizon, and the asserion that he can predict stability: "Whether the currency a century from now is based on gold, seashells, shark teeth, or a piece of paper (as today), people will be willing to exchange a couple of minutes of their daily labor for a Coca-Cola or some See's peanut brittle." I think he's right about people, but in the statement he is also implicitly asserting that peanuts will be a cheap commodity in 100 years. That rejects our best projections regarding climate change. The much more important implicit assertion I quoted in the downvoted post (thanks guys) is that you can buy productive farmland now that will be productive in a century. That will only be generally true if climate change does not happen.
- Czarnian 15y ago
  I'd be willing to bet that when he wrote that sentence, global warming was one of the furthest things from his mind. Even so, I'm pretty sure Warren Buffett is a businessman, not a climate scientist. It's called the Appeal to False Authority, look it up.
- MikeCapone 15y ago
  I've been following Buffett for a long time. I've read all of the BErkshire letters and most of the partnership letters. I've read 2 biographies of him and watched and read dozens of interviews. He was making a general abstract point, not a specific prediction. That's just the way he talks, and maybe it could be confusing if you are not used to it, but that still what it is. And btw, MidAmerican Energy, a Berkshire owned utility, is the biggest investor in wind power in the US and just bought huge solar power projects.

delinka 15y ago

You seem to implicitly reject the human ability to adapt. We'll find a way to adapt to the changing environment. Hell, we might even adapt our habits (ha!) and allow the environment to correct itself. Regardless of the plausibility of global warming, 400 million acres of farmland will still produce more value in crops than you could shake your investment stick at.

spenrose 15y ago
No, I read very smart people who try to analyze what it would take to adapt, and they range from deeply concerned to terrified. Start here: http://physics.ucsd.edu/do-the-math/2011/10/the-energy-trap/ or here: http://earlywarn.blogspot.com/

tomjen3 15y ago

Honestly (and regardless of the actual value of global warming) the projections have changed so much and are so impossible to nail down exactly that they might as well be read in tea leafs. And if we get draught, what do you think the farmers will do? irregate their fields.

spenrose 15y ago
For "changed" please substitute "have gotten more specific, more grim, and better corroborated." WRT irrigation, we lack enough water now on a global scale.
- tsotha 15y ago
  >For "changed" please substitute "have gotten more specific, more grim, and better corroborated." That's not true at all. If anything the last decade has shown the data and models are woefully inadequate for prediction.

argv_empty 15y ago

Global warming is a red herring here. No matter how hard food production gets, it will remain a value-creating activity as long as there are people (if you don't believe me, then stop eating).

hnal943 15y ago

So you believe global warming is going to end life as we know it. How does that change your investment strategy?