I told the last months many time not to do what Buffett oracles. Today we have a new proof that Buffett only talks when it gives him a financial advantage or can prevent him from losing money. Buffett told the last months that it was the right moment to buy stocks. But Buffett himself is sitting on a mountain of cash exceeding 100 000 million dollars (in millions it is more impressive). This proves that he did not use "the right moment" to buy. He only wanted others to buy and prevent a decline in the stockmarket. That decline did hurt him, so he used others to save his fortune. He has no scrupules when it's about $$$$.
Good luck investing several tens of billion dollars without moving the market. Everytime Buffett tries to buy a business the shareholders get in an uproar because if they read Buffett's name they think he's bidding too little. Also about the options: they're European style. So why would he talk the market up NOW if the puts can only be exercised in about 10 years? It's very unlikely that Berkshire will lose money on this anyway... And the liabilities for these puts account for a big part of the profit decline. So they're not losing money, they're losing book value that'll come back within 10 years. And who cares if you lose some book value if you get to keep cash? And about the tool that thinks that GAAP accounting generated Buffett's profits. Look up the amount See's in Berkshires books. It's a tiny amount compared to the money it earns. You know Cash? The stuff you buy apples and bread with. He doesn't care how much the market will pay for a company, he cares about the money in generates.
Very smart observation. 90%+ of the people just buy these stories & biographies at face value, without ever applying any critical thinking.
Lot more to this story than meets the eye. Buffett is in the public spotlight for a reason. Ever since he became such a known persona, he has been pushing an agenda. I do not see why anyone would pay any serious attention to this charlatan after the way he was crying for the bailout. What happened to his supposed free market & capitalist ideals? LOL.
If you want other people to trust you, you have to give them the impression to be nice and sympathic. Once they think your are a nice guy you can accomplish your real intentions without much resistance. After all they think you are a nice guy, so you surely are very honest and only have good intentions. That's when most people become vulnerable. That's when they buy stocks because Buffett told everyone that it was the time to buy. Those who bought, lost a lot of money. Buffett never had such a cashposition as he has now. He was always able to buy for billions without moving the market, so that's a weak excuse.
In the balance sheets that were published in may 2008 Berkshire had 35.57 billion in cash. At this moment that amount is over 100 billion. As we know now Berkshire dropped 32% in 2008 and had the worst year of the last three decades. So the raise of cash cannot be explained as +60 billion cash as a result of profits. The cash came from from other actions. Probably net selling stocks instead of buying. Why is he then trying to convince everyone to buy?
Thats my point, buffett private equity holding shows almost 0 volatility in terms of book value because of GAAP, and thats why he doesnt have losing years. In his defense this also hurts his winning years as he cant mark up his holdings but I didnt say anything about that, I'm talking about the claim that buffett is all great and cant have down years
Profits for Berkshire Hathaway in 2008 went down 62%. 19 op the 20 biggest participations went down. Coca Cola lost 26%, American Express lost 64%, Conoco Phillips lost 41%. 52wk high was 147000; actual price is 78600. So down 53% from the high. The high was on september 11 2008.