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Betting against Warren Buffett? May 1, 2008

Posted by shaferfinancial in Uncategorized.
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I am always surprised at the amount of people who bet against Warren Buffett.  If you don’t know who he is, let me tell you.  He is the worlds richest man, made his money by managing a company called Berkshire Hathaway, which is a holding company for his investments.  He owns large amounts of stock in companies as well as outright owns over 60 companies.  Over the last 43 years the company he manages has returned over 21% annually for a total return of 400,863%.  That’s right a total return of 400,863%.  But people have always taken pot shots at Warren.  In 1998-1999, the voices got very loud because he wasn’t taken in by the technology stock bubble.  People said he was old school, didn’t understand the new rules of investing, etc.  Then the tech bubble burst.  Now, it is he is to old, he has lost his touch etc.  For the last 10 years he has averaged over 18% return!  Here is the last 10 years return:

1998 ……………………………………………. 48.3%

1999 ……………………………………………. .5%

2000 ……………………………………………. 6.5%

2001 ……………………………………………. (6.2)%

2002 ……………………………………………. 10.0%

2003 ……………………………………………. 21.0%

2004 ……………………………………………. 10.5%

2005 ……………………………………………. 6.4%

2006 ……………………………………………. 18.4%

2007 ……………………………………………. 11.0%

 His company is publicly traded so you can buy his stock.  He doesn’t pay dividends so there is no tax consequences of owning his stock, no dividends nor capital gains until you sell, so it really doesn’t matter if you own it inside or outside a tax deferred vehicle.  Look at the return you are getting for the last 10 years on your mutual fund.  How does it compare versus Warren?  So why are you betting against Mr. Buffett?

****As usual this is only the ranting of a clearly deranged man who doesn’t have a license to issue stock advice.  Clearly, don’t take anything he says seriously as this blog is only for amusement purposes.  Talk to a “professional” for any tax and investment advice.*******

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Comments»

1. BawldGuy Talking - May 1, 2008

Love the way you use empirical/historical evidence. This reduces those with whom you disagree to responding with the usual, ‘Oh yeah!?’.

Mr. Buffett has proven in every market we’ve seen the last 40+ years that he can weather any storm, and apply his incredible gift for vision, and ferreting out stellar management teams.

Another bulls eye David.


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