Poor Warren Buffett

Quote of the day:
“My wife and I tried two or three times in the last forty years to have breakfast together, but it was so disagreeable we had to stop.”
--Winston Churchill

Quote of the day no. 2:
“I’m a mover, I’m a shaker.”
--Young MC

Poor Warren Buffett.

First of all, we’re not talking about the Buffett who is wasted away again in margaritaville. I’m sure you know who Warren Buffett is (the most successful investor of the last 50 years), but I thought I should point that out.

I say he’s “poor” in the sense that he may be more out of fashion than he’s ever been.

The heart of his investment method is quite simple. He carefully calculates what he calls the “intrinsic value” of companies, and then he buys stock in the companies that are not selling at their full intrinsic value.

And then he holds, and holds. He’s been quoted saying that the best time to sell is “never.” His fundamental-investing philosophy says that the price of the stock will rise in response to its intrinsic value. To Buffett, it doesn’t matter when. Months, years, decades. He’ll wait.

You can probably see where I’m going with this. The desire for a world quick and gratifying grows by the hour. This is not Buffett’s world.

He is very unpopular among momentum traders, especially those who measure their manhood by their ability to extract small profits from a day of putting hundreds of thousands of dollars at risk while trading ferociously.

To these people, and to many others, investing is a hip-and-happening game where the fastest and cleverest win. The more arcane and complicated the transaction, the better. The more leveraged (the more debt), the better.

Interesting that the biggest winner, by far, in the investment game remains Warren Buffett. He has made more money as an investor than anyone in our lifetimes. No one else is close.

He can buy and sell Donald Trump a hundred times. I wish he would buy him and hold him.