VILLAINS-Warren Buffett

Warren Buffett is one of those villains that used to be a hero of mine. That was when I didn't know any better. When I first got into investing, I gravitated towards value investing which means worshipping at the altar of Warren Buffett, the greatest value investor of all time. Then, I read Malkiel and Bogle, and my mind changed.

I think Warren Buffett is a lucky coin flipper. I don't think he has any greater insight than anyone else. I know this because the guy owned a significant stake in Moody's that was suckered completely by the housing bubble shenanigans of the big Wall Street banks. All Buffett had to do in his infinite wisdom and Omaha common sense was to get on the phone and tell them they were wrong. He didn't. The reason was because Buffett was in the dark like everyone else. The guy who called the tech bubble couldn't see the housing bubble. I could see it, and I am a "know-nothing" investor.

Warren Buffett does not believe in efficient market theory or even the randomness theories of Nassim Taleb. He believes he knows the future for investments that are within his sphere of confidence. I know better. A lucky coin flipper looks like a genius or a magician when he flips heads ten times in a row. But it is luck. When it starts hitting tails, you know you've been fooled.

Buffett wrote a famous essay entitled "The Superinvestors of Graham-and-Doddsville" that was his rebuttal to efficient market theory. Of course, with the performance slide of Bill Miller, that essay seems really stupid now. The dirty secret is that many many many people copy Buffett, yet so few of them are able to duplicate his success. The result is that the successful ones are counted as "value investors" while the losers are dismissed. This is nothing more than a clever reworking of the fallacy of hindsight bias. It is drawing the target after the arrow has already been shot.

But being an indexer and a "know-nothing" investor is not what has pissed me off at Buffett. Unlike his father who was a true patriot of the Old Right, Warren Buffett is a rent seeking Democrat. He praises the bailouts and pushes for government regulations and gets chummy with Goldman Sachs. He is in the club of rich parasites gaining advantage from government favors. The worst of it is his endorsement of the inheritance tax. The result of that is that family businesses must sell in order to pay the tax or avoid it. They want cash for the business, and Warren is there with the cash. He gets quality businesses on the cheap because of that tax. That isn't genius. That is theft. He just has the government put their gun on the victim.

Buffett is also a hypocrite. He always had my respect for pushing for corporate transparency, slamming derivatives, and all the rest. Well, he has had a scandal on all these things he preaches about from shenanigans in his insurance business to that Moody's thing I mentioned to owning a huge portfolio of derivatives to sucking Lloyd Blankfein's dick over at Goldman Sachs.

Warren Buffett is a piece of shit in my book. I'm sorry, but my disgust with him grows every year. The reason you aren't Buffett and won't be like Buffett is because you believe the myth instead of the reality. He is as crooked as all the rest of those fuckers. He just has better PR. Don't believe the hype.

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