Who Thinks Warren Buffett is Full of Sh*t?
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From a blog post this morning by StockTwits founder Howard Lindzon, all you need to become the most beloved investor into your 80s is deep pockets and a sick Rolodex (Editor's note: a Rolo-what?).
Lindzon is following in the footsteps of Michael Steinhardt, who proposed that people will eventually wake-up and realize that Mr. Buffett isn't as great as everyone thinks, and is actually better at being a PR person.
From an interview on CNBC early yesterday, Steinhardt, who has been retired since 1995, commented "America seems almost as insular as it has in times past. Look at the rest of the world compared to America, look what's happening all over and then here the biggest thing we have to worry about is how long it will take Buffett to come down to earth, how long until people like you begin to realize his reality and get off some cloud."
Steinhardt continues "he has managed to achieve a snow job that has conned virtually everyone in the press to my knowledge, and its remarkable that he continues to do it."
Notably, Steinhardt, who founded hedge fund Steinhardt, Fine, Berkowitz & Co., provided his investors with an average annualized return of 24.5 percent (after taking a cut).
Lindzon contends that "Warren is not that special. He is flawed like you and me. He bought Goldman at $115 during the credit crisis. It took serious balls I guess, but maybe inside information or just luck to not implode because the stock went to $50 and could have easily been gone. I can get that 50 percent drawdown with any schmuck at Merrill." He eloquently called Buffett an "old fart with no balls or vision anymore."
That may be, but Buffett, as far as we know, bought Burlington Northern Santa Fe in 2009 for $34 billion (funded in part with $8 billion in debt). One recent Streetinsider article highlights how Burlington is now able to pay Berkshire $1.25 billion in dividends, over 60 percent better than before the acquisition. The payout came as Burlington saw its profit increase 43% to $2.46 billion in 2010.
Also on the Goldman trade, Buffett didn't technically buy the stock. He bought preferred stock with a huge 10 percent yield and got warrants to boot. He cashed out handsome recently when Goldman redeemed the preferred stock and still holds warrant to purchase 43,478,260 common shares. He has a similar thing going with GE (NYSE: GE) preferreds. Only Buffett could get sweet deals like this, as companies paid up to use the Buffett name to instill confidence in their stocks.
While Mr. Buffett is taking a beating from some for his handling of the Sokol mess, don't expect it to change most peoples view that he is the Greatest Investor of all Time.
Lindzon is following in the footsteps of Michael Steinhardt, who proposed that people will eventually wake-up and realize that Mr. Buffett isn't as great as everyone thinks, and is actually better at being a PR person.
From an interview on CNBC early yesterday, Steinhardt, who has been retired since 1995, commented "America seems almost as insular as it has in times past. Look at the rest of the world compared to America, look what's happening all over and then here the biggest thing we have to worry about is how long it will take Buffett to come down to earth, how long until people like you begin to realize his reality and get off some cloud."
Steinhardt continues "he has managed to achieve a snow job that has conned virtually everyone in the press to my knowledge, and its remarkable that he continues to do it."
Notably, Steinhardt, who founded hedge fund Steinhardt, Fine, Berkowitz & Co., provided his investors with an average annualized return of 24.5 percent (after taking a cut).
Lindzon contends that "Warren is not that special. He is flawed like you and me. He bought Goldman at $115 during the credit crisis. It took serious balls I guess, but maybe inside information or just luck to not implode because the stock went to $50 and could have easily been gone. I can get that 50 percent drawdown with any schmuck at Merrill." He eloquently called Buffett an "old fart with no balls or vision anymore."
That may be, but Buffett, as far as we know, bought Burlington Northern Santa Fe in 2009 for $34 billion (funded in part with $8 billion in debt). One recent Streetinsider article highlights how Burlington is now able to pay Berkshire $1.25 billion in dividends, over 60 percent better than before the acquisition. The payout came as Burlington saw its profit increase 43% to $2.46 billion in 2010.
Also on the Goldman trade, Buffett didn't technically buy the stock. He bought preferred stock with a huge 10 percent yield and got warrants to boot. He cashed out handsome recently when Goldman redeemed the preferred stock and still holds warrant to purchase 43,478,260 common shares. He has a similar thing going with GE (NYSE: GE) preferreds. Only Buffett could get sweet deals like this, as companies paid up to use the Buffett name to instill confidence in their stocks.
While Mr. Buffett is taking a beating from some for his handling of the Sokol mess, don't expect it to change most peoples view that he is the Greatest Investor of all Time.
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