Thursday, March 7, 2013

The Odyssey of Warren Buffett

Leave it to Warren Buffett to invite his opponent to the huddle with fourth down and goal to go. It takes a certain level of confidence to tolerate criticism. It’s also smart. Knowledge is power. Better to know what you’re up against. In his recent Dealbook column (“Buffett Picks His Bear for His Annual Meeting," NYT 3/4/13) Peter Lattman describes how Warren Buffett’s annual letter to stockholders “said that he ‘wanted to spice things up’ by finding a money manager with an unfavorable view of Berkshire Hathaway to participate in the company’s annual meeting…often described as the Woodstock for capitalists.” Would there actually be over 18,000 Berkshire Hathaway investors smoking grass and rolling nude in the Omaha mud when the meeting takes place on May 4th?  Unlikely, but as Lattman reported Buffett chose Douglas A. Kass of Seabreeze Partners Management who is also a writer for The Street and commentator on CNBC to be the bear. And Kass pulled no punches according to Lattman’s account, alluding to Buffett’s “advanced age” and “Berkshires large size” as weak points. Buffett has never been afraid to call a spade a spade and these are reasonable criticisms. He once termed derivatives “financial weapons of mass destruction.” It will be curious to see how he deflects these arrows. Remember Buffett always goes against the grain. He’s still buying newspapers when everyone thinks newsprint is moribund (albeit the $344 million outlay in the past 15 months represents a relatively small portion of Berkshire’s portfolio). Will Buffett be like the wily Odysseus getting at Polyphemus aka the bear's Achilles' heel?

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