What do you think of the blog entry in the link below? I am a huge fan and follower of Warren Buffett so I find this both troubling and sort of interesting. I also see that the author attended the University of Maryland and is now an MBA candidate at the Johnson School of Business at Cornell. Very interesting mix in my opinion. Below you can see a slide from the presentation that can be found here. This slide is particularly important because it captures the major area that Raj attempts to highlight.
Should you be investing in Buffett and his companies when it's safe to say that he is at the tail end of his career? Are investors basically betting their money on hope and past performance? Has Buffett really violated some of his very own rules recently? If so, is this a signal that things are falling apart or is it an indication for just how bad things are and how bad we can expect things to get in the near future? Is anyone else will to step up and add their support to Rajagopa? Is this just some kids trying to get his name out there by doing the unthinkable (challenging the greatest investor of our time? Or should more of us begin taking a critical look at the state of the economy and reassessing the holdings and positioning of our portfolios?
I myself purchased BRK.B a few months ago, but eventually decided that I didn't want to be on board with this company that is so exposed to the US economy, so I abruptly sold it before its inclusion in the S&P 500. Clearly, a violation of Benjamin Grahams teachings in The Intelligent Investor.
Anyway, it is typical Buffetology to talk about his willingness to bet on the US economy in the long run, but does our long run suddenly look different than it did a year ago or should we stay the course and stomach the short-term volatility and ride this out in the spirit of the long-term value investing philosophy that "intelligent investors" are instructed to follow?
I don't really know the answer to all of these questions, but I will plan to provide a follow-up to this piece when I get more clarity on the direction of Berkshire (BRK.B) specifically, and the other issues that are set to come out of Washington in the very near future. Personally, I'm more comfortable owning companies like Google and Apple at this point but other the enormous growth potential and their ability to truly excite the market, but perhaps Mr. Buffet will prove some of us wrong once again with is counter cyclical/counter intuitive thinking and actions.
What is really behind the purchase of Burlington Northern? Was Buffet simply being defensive and protecting the value of this mound of cash by throwing it in a hard asset or is he 5 steps ahead of the game and in perfect position to capitalize on a federally backed, national rail system that will redefine how we transport goods or even how we travel?
Below is one of the concluding slides from Raj Rajagopa's presentation:
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