Should Buffett Stick to Investing?
Board: Berkshire Hathaway
I have been a shareholder in Berkshire Hathaway continually for decades, so I have seen how many good things that have been brought to this company by Warren Buffett. And I have also seen how good of teachers Buffett and Munger can be. But I believe that Buffett’s comments on political issues such as taxes are now hurting him, and possibly Berkshire as well.
I know that Buffett and Munger consider themselves to be teachers as well as business operators. And it is something they do well. But in the same way in which an investor should stick to his circle of competence in investing, teachers should stick to their circle of competence in instructing.
For sure, the list of topics that Buffett could discuss is very long. He has many years of experience and thinking in many business areas, and I know that there are many of us who would appreciate his insights on these topics.
How fascinating would it be to listen to Buffett give examples and explanations of how he arranges compensation packages for the operating executives of Berkshire’s subsidiaries? Not real ones with names and dates, but examples of how he would attempt to align the incentive compensation for the executive with his desires for the company.
He says that his managerial style borders on abdication, until it doesn’t. But, when is that line crossed? We know that he talks to his managers, but what kind of concerns can he discuss with them and still remain consistent with that style? Berkshire is probably the only company of this size that gives its managers such free reign, and we would all appreciate more of his thoughts on this.
I look at all the different industries in which Berkshire operates. Who would not like to read an essay by Warren Buffett on running a furniture store, railroad or brick manufacturing facility?
When it comes to Buffett and Berkshire, there is no lack of topics; no reason to stray. So I consider essays or discussions by Buffett on the political issues of Washington to, frankly, be a poor use of his time and energy. Yes, he has the right to talk or write about what he pleases. And, yes, people are interested in hearing what he has to say. But that does not mean that he should. It is like a school assigning the best musical instructor in the country to teach history and shop.
I am reminded of an episode of “West Wing” when one of the president’s top aides attempted to confront commentators on the internet that he felt were wrong or misleading. When his secretary discovered this she was aghast. She said something like, “You don’t know who those people are,” and made him stop. He had no concept of the kind of cesspool he was entering, but she did. I feel the same way the aide’s secretary felt. For a teacher who has so much to say about Main Street and Wall Street, Warren Buffett does not need to go to Washington to find something useful to discuss.