This page has been archived and commenting is disabled.
Buffett's 1982 Letter To John Dingell Warns Sternly That US Market Could Become Precisely What It Is Today
In reading Buffett's nearly 30 year old letter, we can't help but be stunned by the hypocrisy in the statement made by the man whose multi-billion derivative bet on perpetual ponzi expansion almost caused a liquidity crunch at none other than Berkshire Hathaway in early 2009: "We do not need more people gambling in non-essential instruments identified with the stock market in this country, nor brokers who encourage them to do so. What we need are investors and advisors who look at the long-term prospects for an enterprise and invest accordingly. We need the intelligent commitment of investment capital, not leveraged market wagers. The propensity to operate in the intelligent, pro-social sector of capital markets is deterred, not enhanced, by an active and exciting casino operating in somewhat the same arena, utilizing somewhat similar language and serviced by the same work force. In addition, low-margined activity in stock-equivalents is inconsistent with expressed public policy as embodied in margin requirements. Although index futures have slight benefits to the investment professionals wishing to "hedge out" the market, the net effect of high-volume futures markets in stock indices is likely to be overwhelmingly detrimental to the security-buying public and, therefore, in the long run to capital markets generally." We also find it ironic that everything that Buffett warned against happening as a worst-case scenario, is precisely where the US capital markets find themselves right now. In the meantime, a month ago the NYSE introduced liquidity rebates for the 15 most actively traded contracts.
Full letter can be found at Forbes:
»
- 7528 reads
- Printer-friendly version
- Send to friend
- advertisements -
All that can be said is that Buffet realized less than 30 years ago that a successful long strategy can not beat a successful short term strategy.
And then he demonstrated that making a quick buck trumps sustainability.
It was always about getting out before the wheels came off. Always.
classic 'do as i say, not as i do' which allows for unlimited wealth in his case
Eeeeeeeeeee-yep.
Gold is the new set of rims you get when you ditch the dollar so you can keep on rolling.
I am Chumbawamba.
Ironic but did the 401k / IRA defined benefit programs not start around the same time in 1982 ?
Now he is counting on the same (and the foolishness of the sheeple) to save the "Buffett puts" !!
If you cant beat 'em - join 'em, aint that right grandpa?
Or just rotate everyone else's point of view:
http://2.bp.blogspot.com/_swI0LQlx0ig/Silozosck8I/AAAAAAAAAIs/nKvC4Zx3jx...
At some point after 2001 Buffet did a 180 spin and became a fulltime mouthpiece for corporate fascism and doomed keynesian policy.
I now "rank" Buffet at the very bottom of the scale alongside other hypocrite cockroaches like Blankfein, Geithner, Bernanke, Mozillo, Rubin, Summers, etc.
I dunno, Buffet has always been a pro-America booster.
His advice, retransmitted through "investment advisors," has bankrupted plenty of unsophisticated investors.
His suggestions that you can be a better investor merely by using "common sense" and reading the Wall Street Journal have also been highly damaging.
BRK is certainly more sophisticated than a mere "common sense" Mom & Pop operation.
Seriously... compare Buffett's opinion/actions of late with, say, those of another capitalist investor like Jim Rodgers. There is no comparison. Rodgers is a principled human being that put as much distance b/t himself and corruption as possible. Buffett, OTOH, has effectively become a complicit looter of markets and nations.
Frankly, I don't know why Buffett's reputation hasn't imploded completely given his words/actions these past 4-5 years. The guy is now a de facto criminal aligned with a fascist corporatocracy.
Ignore him. Buffett no longer deserves attention or respect.
Like with the US, his reputation rides along the momentum he picked-up during the years when he wasn't a total douchebag. Once that inertia runs out, look out below.
I am Chumbawamba.
Ask him where Galt's gulch is.
I would imagine that he thinks of himself as a sort of Francisco d'Anconia, planning to build up some great trap for the moochers to attach themselves to, and for the looters to seize, then find that it is worthless, sinking them all. They think he is one of them, but he isn't. He is only speeding their course towards self-destruction. I sometimes wonder if he and Greenspan didn't just come up with a scheme like that.
But then, maybe I just want to see some sort of genius in stupidity.
Gee, all he did was kiss a ring with his knee bent and head down and you folks act like it's a big deal. /sarcasm off/
BRK = Goldman Sachs = Federal Reserve = NWO.
There is no denying which 'side' Buffett represents...
Of course he almost folded from the liquidity trade, BRK is a big (the biggest) carry trade around, and frankly, good for him. He's talking up his book and defending it as best as he can. Bravo to him for being able to and having the chutzpah to do so.
Ding!
"Hey, if you can't beat 'em, join 'em..."
Spoken like a true patriot.
You can't change the wind, but you can adjust the sails.
Or just make the paddle bigger:
http://cheezpictureisunrelated.files.wordpress.com/2010/05/1291756352094...
Agree, he saw the writing on the wall and adjusted to it. He wasn't going to change the system. I am disappointed in his adjustment to his principles, but from a business standpoint with shareholders to answer to, its a tough fork in the road.
"what we really need is investors to consistently dump portions of their paychecks into the equities markets with the hopes that they can one day retire. Then we'll wind up an entire industry of idiots who look at short-term gains and extrapolate them decades into the future while saying "the long term is key". That way we'll be the only ones gambling and skimming off the top. If everyone is a high trading speculator, how are we supposed to make money? Oh, and while we're at it, let's get those morons in dc to make sure the only things you can put into a 401(k) are mutual funds and company stock."
+100
Hi, I'm Warren Buffett. Any trading strategy that I do not agree with 100% is wrong and should probably be banned. Unless, of course, later on I figure out how to make a buck off of it.
He is so self-serving in this letter that it only goes to show how much Buffett is just like the rest of them. He just has a slightly different agenda.
+1
Warren Buffoon is the same way about taxes. He spent his entire career employing an army of CPAs to figure out how to pay as little taxes as possible. Now, that he's 400 years old and "got his" he's whining he doesn't pay enough.
Although...it says right on the tax return that you can make a voluntary donation. Warren? You listening? Where's your check? Or maybe paying taxes is for the little people.
Eerily redacted from the letter is this post script:
I have to go now John. Somewhere out there, a young Becky Quick yearns for me.
If you don't know who the patsy is, then you are the patsy.
Warren Buffett
The more the SEC screws around with the market (they've really gone off the rails recently), the more demand there will be for derivatives - especially opaque, poorly constructed ones. The latter results from the former.
Get used to it. One day, these highly leveraged things will blow us up, but until then.....
HIPPOCRITIUM:
http://williambanzai7.blogspot.com/2010/05/introducing-banzai7-periodic-...
I don't think it's fair to claim hypocrisy.
He is arguing for policy that he thought would be in the best interests of society.
But he has to play the game under the rules that exist, not the rules that he is asking for.
He played very well.
Buffett has since moved to the dark side...i wish him luck..
I believe that the discrepancy comes not from Buffett's actions contradicting his words (that is, looking at the long-term prospects for an enterprise -the U.S.- and investing accordingly), but rather in the view of whether his derivative position should be considered an "intelligent commitment of investment capital" versus a "leveraged market wager."
Looks like somewhere down the road Uncle Warren figured out the universal rule of 'If you can't beat 'em, join 'em'.
I Love gucci and chanel. Some women do not mind buying replica handbags, while some women just love designer handbags if you can distinguish between good and bed from the replica handbag?you also can use low price get high quality enjoy?today use chanel handbag ?tomorrow carry gucci handbag?the day after tomorrow hermes handbad in your hand? this niceness all give the credit to low price?same argument you also can buy replica watches?buy DVDslouis vuitton...