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Warren Buffett has lost his touch (:----{



March 13, 2009 – Comments (5)

Back in the Fall he said buy when everything was crashing.. He said believe in American companies. Then he went and bought , putting his money where his mouth is.

But what happened next ? His buys are now deep in the red.

In the next few months not only did his buys go deep in the red. But his precious Brk-a and Brk-b stocks started going down heavy. The Bears were smelling blood and were on the attack on even his most precious empire.

The attack of the bears became so great that it led Buffet to proclaim that the American economy has fallen off a Cliff. That comment caused panic selling last week and made the DJIA hit a new low point during this recession just this past Monday.

So is Warren Buffett the new contrarian indicator? He panics the masses by making some odd-ball statement and then as the dust settles the market goes on a 4 day upward TEARRRRR.


5 Comments – Post Your Own

#1) On March 13, 2009 at 11:08 PM, vriguy (65.22) wrote:

He has always emphasized long term investment outlook, so I would not judge his touch in the short run.  Five, or fifteen, years from now I'll know whether he made major mistakes the last 6 months.  

My money is on him - I've continued adding to my modest BRK-B stake.

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#2) On March 13, 2009 at 11:16 PM, zversyp (< 20) wrote:

He said the same thing in '74, and his holdings immediately dropped 50%.  Then he had a couple modest gains over the next couple decades.

People started saying "Buffett has lost his touch" in the dot com boom.  Who said it back then?  I don't remember either.  They didn't have the grace that Buffett does to admit when they were wrong.

If Buffett is wrong, he will tell the world in his annual letter to his shareholders.  He always does.  He won't, of course, say he's wrong about a decades-long investment a few months into it. That would make even less sense than it sounds like it would.

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#3) On March 14, 2009 at 3:26 AM, BenGriffin71 (27.53) wrote:

Whew!  Talk about confidence! 

To be able to call out Buffet and Munger on their investing prowess.  To be able to talk smack on Berkshire Hatthaways investment prospects, you must hold your own skills of analysis in very very high regard.

You are not alone however.  As ZVERSP pointed out, many have boldly claimed to know better than these two the prospects of theri investments.  Of course all were proved wrong in time.

 Remember long term investments are not about being able to predict the exact future with certainty.  It is about understanding probabilities and favorable conditions that are almost always advantageous over a long enough period of time.

For anyone who enjoys reading, Buffet and Munger are both rare intellects  It is captivating to read abotu them or what they write.  The annual letter to shareholders is always supurb.  I can also recommend 'Poor Charlie's Almanac'  Though it is out of print, you can still get used copies.  Also, The Essays of warrren buffe: Lessons for Corporate America. is excellent.

 I know you didn't specifically mention Munger.  I brought him up because he is one of my favorite polymaths.  He does not enjoy the lime light as much as Buffet, and is a man of fewer words.  At the shareholder meetings, he is famous for saying 'i have nothing to add', when a question has been well answered.  As seemingly quiet as he is, it is worth the time to take a closer look.  'Poor Charlie's Almanac' was composed and published by a group of his friend who felt compelled to share his wit and wisdom. 

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#4) On March 16, 2009 at 8:42 AM, jstegma (28.50) wrote:

Nonsense.  If you are trying to judge Warren Buffett moves less than a year later, you just don't understand Buffett.

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#5) On March 16, 2009 at 8:52 AM, rlloydevans (< 20) wrote:

Buffett and Munger are the incredibly successful investors that they are because they buy companies when they are cheap. They don't chase momentum or worry about year-over-year. It was momentum and year-over-year investors who got into this mess.

As Buffett says, be fearful when people are greedy, and greedy when there is blood in the streets. It has served him well for 60 years. What have you done in the last 20?There are gallons of blood in the street, the time to greedily buy.

For that matter, what will your investment decisions now look like in 10 years? While Buffett admittedly has the occassional stinkers (Buffett the very first to admit it) given long term investing, no one has shown the discipline he has. Before dismissing him as shopworn, you should really look at what he does and learn something.

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