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General
Mistakes of the Nineties
By Christopher Channer
Founder, Channer Investment Management, Inc.
One guy who doesn’t appear to appreciate this fundamental truth is Jon Markman, who has written highly critical articles on Warren Buffett. Over the last 16 years I have also written articles about Warren Buffett, but Jon and I have different perspectives and I suspect different motives.
My motive has been one of discovery. The discovery of character, principles, and superior investment temperament are what I have sought. My ongoing conclusion, for the last sixteen years, has been that no one excels more in these three important areas than Warren Buffett.
Mr. Markman, in an article posted on MSN, 3/08/06, offers a different view, one that could be of great disservice to readers.
Here are some observations Markman makes that are worth taking issue with:
• Buffett, once celebrated as the Oracle of Omaha, is now best described as the Natterer of Nebraska.
• Buffett is guilty of juvenile humor, unseemly criticism of rivals and self-promotion.
• BRK shares turned in a fifth-straight year of underwhelming performance in the only metric that investors care about: the advance of price.
• Berkshire Hathaway is more of a cult than a security.
Buffett, once celebrated as the Oracle of Omaha, is now best described as the Natterer of Nebraska.
I am not going to expend much energy here Jon, because while it clearly is a swipe, who really knows what you mean? Are you saying Buffett is all washed up and no longer worth listening to? I have heard that before. When the Tech Bubble was advancing daily, Warren was misquoted as saying he didn’t own technology stocks because he couldn’t understand them. If you bought into the negative Wall Street/Media wisdom back in 1999, you could have bought hot NASDAQ stocks as opposed to Buffett’s stock. For a few months you would have looked smart. For the next six years however, BRK’s stock price cleaned the clock of NASDAQ, the S&P 500, and the DJIA. Washed up then? Take a moment to study the reality in the following price chart.
Buffett is guilty of juvenile humor, unseemly criticism of rivals and self-promotion.
Make your judgments as you will Jon, but you are attacking Warren’s maturity and his character here. Ironically, these are the negative characteristics that you have portrayed. I am not going to debate whether you are being sincere here, but I can tell you that this man is honest, humble, and has a wonderful sense of humor. When I first met him in 1990 it was not I that thrust my hand toward him. It was self-made billionaire Warren who offered his hand to me. If you wander the streets of Omaha and ask the local residents what they think about Mr. Buffett (and I have repeatedly) you will discover how wrong you are. His community loves him. They say things like, “Oh Warren, we like him just fine. If he acted like he was better than us, we wouldn’t. But he behaves like he is one of us.” Juvenile, unseemly critical, self-promoting? Warren has been critical of the ways and traditions of Wall Street on occasion. But he was precisely correct. You are shoveling garbage on a man with unique and extraordinary character. Baseless Jon.
BRK shares turned in a fifth-straight year of underwhelming performance in the only metric that investors care about: the advance of price.
I refer you to the price chart again. You picked five years. Try six and suddenly your conclusion looks ridiculous. Your approach is enough to make one wonder about your motives. But I will just wonder, I won’t accuse. There is a far more important insight to be made: To challenge your statement about what investor care about. When investors surrender themselves to decision-making which is based on short-term stock price moves, they stop being investors. But you are a trader. You are the author of “Swing Trading” and “Online Investing”. On your website you say, “Trading stocks is a risky aspect to investing”. “To avoid getting burned by trading in and out of the wrong stocks, subscribe to Jon Markman’s Trader’s Advantage”. This all makes me wonder. Why are you attacking one of America’s greatest investors when your basic financial background (which you promote) is that of a trader? Traders are not investors, from a true investor’s perspective. Trading is really a zero-sum game, designed to out maneuver others. Buffett (and I) are about owning outstanding businesses that are growing, long term. Are you an apple who is telling an orange that he is not doing it right? Not very smart.
Berkshire Hathaway is more of a cult than a security.
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