The Oracle is short large quantities of equity puts. Why would you expect him to say anything different? Not a criticism of Mr. Oracle, by the way, as he at least has skin in the game.
Where did you get that total nonsense from? Here is the correct data for multiple down years for BRKA stock: 1999 from 70,000 to 56,100 down 20% 1990 from 8675 to 6625 down 24% 1984 down 3% 1975 down 5% 1974 down 44% 1973 down 11% 1970 down 7% 1966 down 8%
he confused book value growth with the stock performance. in 73 74 buffett stock tanked because the market thought his portfolio was worth less yet GAAP made him have a 'winning' year
Who the heck buys and sells stocks by looking at "book value growth"? Only liquidators care about book value. And they only care about the real book value, not the stated book value.
couldn't agree with you more. the buffett fans tend to be focused on the system created by accountants and politicians and yet ignore what the market says, they WANT to believe buffett is untouchable and cant lose in a down year. if BRKB kept their books on a real mark to market basis, it would be trading at much lower, he would be posting 'writedowns' left and right If he had taken AXP private he would be showing almost no losses, since its a stock hes getting killed
His stock tanked then because market thought they are going to buy it cheaper later. Prices always are more volatile than fundamentals. GAAP made him have a winning year? Do you think itâs possible to make it from an initial 10 thousand dollar investment to 60 billion using GAAP to fool people for 5 decades? Why then, not everybody is doing it? Donât they have a motive to make it to forbes 400?
I'm not critizing buffett. far from it, I'm making an observation. its gaap that made buffett not have losing years. As I understand he only needs to writedown his sees candy stake(through decreasing the 'goodwill' or book value) if he and the board believes the stake is worth less so a lot of the 'book value' is at his discretion. if Sees were a public stock it would have tanked along with everything else and he would've taken writedowns.
A destruction of wealth (like in WWII) is never the cause of a bull market. Read chapters "The broken window" and "The Blessings of Destruction" from Henry Hazlitt's book to see why. http://jim.com/econ/chap02p1.html