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When you look at Warren Buffet when he started investing as a kid and the actions he took as an investor. He could never do the same today; tremendously illegal

When you look at Warren Buffet when he started investing as a kid and the actions he took as an investor. He could never do the same today; tremendously illegal. The change obviously being the politics and subsequent laws created to 'regulate' the market. But ultimately politics will taint it. Worse yet, it's clear that in the USA it has been corrupted since Clinton Era. Clinton has a lofty goal of fixing the 'inner city ghettos' and how did it he do it? He repealed glass steagal. Which resulted in the 2009 financial crisis, but that was just the surface of that bad decision. Something else rather unique to the USA is naked calls or even exercised options before strike date? Like the health of the US stock market via legislation and politics is so bad. This is in essence what the gamestop and wallstreetbets is making boatloads of money against; but is somewhat essential as the checks/balance to the US system.

n4r9 3y ago
I've seen some interesting analysis the last few years about how Buffett is a classic "monopolist" invester. He specifically targets products and companies that have large market shares and uses anti-competitive practices to keep the share large. Matt Stoller has an interesting interview about Buffett with Dave Dayen here - https://www.thebignewsletter.com/p/warren-buffett-americas-folksiest https://www.thebignewsletter.com/p/warren-buffett-americas-f... . The following quote nicely reflects what you said about regulated markets: > In a fair economy or well-run economy or political system, could Warren Buffett exist? > No, I mean, right from the outset, he couldn't exist because the way in which he created his business is through creating an insurance conglomerate and using the payments for these large investments. And now he just makes money because he has money. When Warren Buffett goes into a stock, the stock moves and, following Buffett is a legit investment strategy that other people have. Buffett is largely untaxed on a lot of this stuff because he doesn't sell very often.
- incomingpain 3y ago
  >I've seen some interesting analysis the last few years about how Buffett is a classic "monopolist" invester. I've done IT work for people who literally do the monopoly thing. Buy 4 greenhouses, growing mainly tomatos and cukes. Later buy a hotel for where they wish to retire. Ive done IT work for people who secretly own vertical businesses or for that matter an industry they've corners secretly. Even the top end managers in an individual business dont realize the owner has done this. >No, I mean, right from the outset, he couldn't exist because the way in which he created his business is through creating an insurance conglomerate and using the payments for these large investments. And now he just makes money because he has money. When Warren Buffett goes into a stock, the stock moves and, following Buffett is a legit investment strategy that other people have. Buffett is largely untaxed on a lot of this stuff because he doesn't sell very often. Like he's very public with his strategy. His big problem today is his scale. Could someone today be an investor and become a lawful billionaire? Sure, lots of examples. fundamentally the trick is not try to 'get rich quick' or bet against something. It's to be optimistic betting that your investments bring legitimate value to the economy. What buffet is essentially doing is being a high level manager of essential/important services/products. I would even go further. Poor people invest in low/no risk bonds because they have a pessimistic world view which doesnt hold up to scrutiny. Whereas the rick invest in high risk stocks because they have an optimistic view.
  - n4r9 3y ago
    > betting that your investments bring legitimate value to the economy My understanding is that this is where Buffett falls short. Or - probably a better way of putting it - this is where "value to the economy" takes on a different meaning to "for the good of society". The main reason investers like Buffett look for monopolies is that they don't have to innovate or improve efficiency. If anything, the general tendency is for prices to go up while quality goes down. This is all done in the name of "good business". The result is that consumers lose out.
    - incomingpain 3y ago
      >My understanding is that this is where Buffett falls short. Or - probably a better way of putting it - this is where "value to the economy" takes on a different meaning to "for the good of society". I guess it's pretty debatable. Insurance companies for example don't inherently do something and certainly have lots of controversy. So you could easily argue they arent good for society. But at the same time, they do exist and do very well and lots of people make use. >The main reason investers like Buffett look for monopolies is that they don't have to innovate or improve efficiency. If anything, the general tendency is for prices to go up while quality goes down. This is all done in the name of "good business". The result is that consumers lose out. https://www.cnbc.com/berkshire-hathaway-portfolio/ https://www.cnbc.com/berkshire-hathaway-portfolio/ Looking at the top 11, where he holds 10% stake or more. None of these are monopolistic. Looking at % of profile. He's obviously a huge apple fan, 40% of his portfolio, but apple isn't monopolistic. They have maybe 25% market share in any of their fields. They are very low amounts of vertical since they outsource manufacturing.
      - n4r9 3y ago
        > Insurance companies for example don't inherently do something They pay out in case of loss... > None of these are monopolistic I researched the top few. Except for liberty media - which looks like a portfolio - they have all engaged in consolidating or anti-competitive behaviours. Perhaps not actual monopolies in the strictest sense, but I never claimed that he actually owned monopolies, and imo the only thing stopping them being actual monopolies is regulation. - DaVita: "DaVita has a history of attempting to buy up competing dialysis clinics in an industry that is already highly concentrated, in large part due to the acquisition activity of DaVita and other large dialysis clinic chains" https://www.ftc.gov/news-events/news/press-releases/2021/10/ftc-imposes-strict-limits-davita-incs-future-mergers-following-proposed-acquisition-utah-dialysis - Occidental: "Nearly 50 Democratic lawmakers in the US Congress have urged the Federal Trade Commission (FTC) to launch a comprehensive investigation into recent mergers and acquisitions by major energy corporations. The call for action comes on the heels of a significant uptick in consolidation within the sector, with oil and gas companies embarking on a $250 billion buying spree in 2023 alone. Leading players such as Exxon Mobil, Chevron Corp, and Occidental Petroleum executed acquisitions totaling $135 billion during the year, leveraging high stock prices to secure access to lower-cost reserves." https://www.pymnts.com/cpi-posts/democrats-call-for-ftc-probe-into-oil-and-gas-mergers-amid-monopoly-concerns/ - Kraft Heinz: "The merger between Kraft Foods and H.G. Heinz further consolidates the global food production into the hands of about a half dozen companies. These six multinational powerhouse corporations can exert enormous power over the retail grocery channel, and by extension control the dynamics of a necessary area for all people: the access to food. These corporations represent an emerging monopoly in an area where competition is needed, arguably, more than just about any other industry in the world." https://www.upi.com/Top_News/Opinion/2015/03/26/The-Kraft-Heinz-merger-the-monopoly-on-food/4591427324041/ I stopped there because we appear to be talking past each other.

n4r9 3y ago

I've seen some interesting analysis the last few years about how Buffett is a classic "monopolist" invester. He specifically targets products and companies that have large market shares and uses anti-competitive practices to keep the share large. Matt Stoller has an interesting interview about Buffett with Dave Dayen here - https://www.thebignewsletter.com/p/warren-buffett-americas-folksiest https://www.thebignewsletter.com/p/warren-buffett-americas-f... . The following quote nicely reflects what you said about regulated markets: > In a fair economy or well-run economy or political system, could Warren Buffett exist? > No, I mean, right from the outset, he couldn't exist because the way in which he created his business is through creating an insurance conglomerate and using the payments for these large investments. And now he just makes money because he has money. When Warren Buffett goes into a stock, the stock moves and, following Buffett is a legit investment strategy that other people have. Buffett is largely untaxed on a lot of this stuff because he doesn't sell very often.

incomingpain 3y ago
>I've seen some interesting analysis the last few years about how Buffett is a classic "monopolist" invester. I've done IT work for people who literally do the monopoly thing. Buy 4 greenhouses, growing mainly tomatos and cukes. Later buy a hotel for where they wish to retire. Ive done IT work for people who secretly own vertical businesses or for that matter an industry they've corners secretly. Even the top end managers in an individual business dont realize the owner has done this. >No, I mean, right from the outset, he couldn't exist because the way in which he created his business is through creating an insurance conglomerate and using the payments for these large investments. And now he just makes money because he has money. When Warren Buffett goes into a stock, the stock moves and, following Buffett is a legit investment strategy that other people have. Buffett is largely untaxed on a lot of this stuff because he doesn't sell very often. Like he's very public with his strategy. His big problem today is his scale. Could someone today be an investor and become a lawful billionaire? Sure, lots of examples. fundamentally the trick is not try to 'get rich quick' or bet against something. It's to be optimistic betting that your investments bring legitimate value to the economy. What buffet is essentially doing is being a high level manager of essential/important services/products. I would even go further. Poor people invest in low/no risk bonds because they have a pessimistic world view which doesnt hold up to scrutiny. Whereas the rick invest in high risk stocks because they have an optimistic view.
- n4r9 3y ago
  > betting that your investments bring legitimate value to the economy My understanding is that this is where Buffett falls short. Or - probably a better way of putting it - this is where "value to the economy" takes on a different meaning to "for the good of society". The main reason investers like Buffett look for monopolies is that they don't have to innovate or improve efficiency. If anything, the general tendency is for prices to go up while quality goes down. This is all done in the name of "good business". The result is that consumers lose out.
  - incomingpain 3y ago
    >My understanding is that this is where Buffett falls short. Or - probably a better way of putting it - this is where "value to the economy" takes on a different meaning to "for the good of society". I guess it's pretty debatable. Insurance companies for example don't inherently do something and certainly have lots of controversy. So you could easily argue they arent good for society. But at the same time, they do exist and do very well and lots of people make use. >The main reason investers like Buffett look for monopolies is that they don't have to innovate or improve efficiency. If anything, the general tendency is for prices to go up while quality goes down. This is all done in the name of "good business". The result is that consumers lose out. https://www.cnbc.com/berkshire-hathaway-portfolio/ https://www.cnbc.com/berkshire-hathaway-portfolio/ Looking at the top 11, where he holds 10% stake or more. None of these are monopolistic. Looking at % of profile. He's obviously a huge apple fan, 40% of his portfolio, but apple isn't monopolistic. They have maybe 25% market share in any of their fields. They are very low amounts of vertical since they outsource manufacturing.
    - n4r9 3y ago
      > Insurance companies for example don't inherently do something They pay out in case of loss... > None of these are monopolistic I researched the top few. Except for liberty media - which looks like a portfolio - they have all engaged in consolidating or anti-competitive behaviours. Perhaps not actual monopolies in the strictest sense, but I never claimed that he actually owned monopolies, and imo the only thing stopping them being actual monopolies is regulation. - DaVita: "DaVita has a history of attempting to buy up competing dialysis clinics in an industry that is already highly concentrated, in large part due to the acquisition activity of DaVita and other large dialysis clinic chains" https://www.ftc.gov/news-events/news/press-releases/2021/10/ftc-imposes-strict-limits-davita-incs-future-mergers-following-proposed-acquisition-utah-dialysis - Occidental: "Nearly 50 Democratic lawmakers in the US Congress have urged the Federal Trade Commission (FTC) to launch a comprehensive investigation into recent mergers and acquisitions by major energy corporations. The call for action comes on the heels of a significant uptick in consolidation within the sector, with oil and gas companies embarking on a $250 billion buying spree in 2023 alone. Leading players such as Exxon Mobil, Chevron Corp, and Occidental Petroleum executed acquisitions totaling $135 billion during the year, leveraging high stock prices to secure access to lower-cost reserves." https://www.pymnts.com/cpi-posts/democrats-call-for-ftc-probe-into-oil-and-gas-mergers-amid-monopoly-concerns/ - Kraft Heinz: "The merger between Kraft Foods and H.G. Heinz further consolidates the global food production into the hands of about a half dozen companies. These six multinational powerhouse corporations can exert enormous power over the retail grocery channel, and by extension control the dynamics of a necessary area for all people: the access to food. These corporations represent an emerging monopoly in an area where competition is needed, arguably, more than just about any other industry in the world." https://www.upi.com/Top_News/Opinion/2015/03/26/The-Kraft-Heinz-merger-the-monopoly-on-food/4591427324041/ I stopped there because we appear to be talking past each other.