{"id":1492,"date":"2007-05-05T16:02:43","date_gmt":"2007-05-05T21:02:43","guid":{"rendered":"http:\/\/chimeraobscura.com\/vm\/he-hath-a-way\/"},"modified":"2007-05-08T06:38:26","modified_gmt":"2007-05-08T11:38:26","slug":"he-hath-a-way","status":"publish","type":"post","link":"http:\/\/chimeraobscura.com\/vm\/he-hath-a-way","title":{"rendered":"He hath a way"},"content":{"rendered":"

Berkshire Hathaway just held its annual meeting, in which Warren Buffett fields questions from shareholders. For six hours. He’s 77. I’m just sayin’.<\/p>\n

Anyway, the Wall Street Journal<\/em> had some highlights from the Q&A<\/a> (I think it’s $-to-read, but that’s probably why Rupert Murdoch bid $5 billion for it, and not the Times or the WaPost). I never really knew anything about Buffett till the dot-com boom, when he was getting lambasted in the press for not buying into internet companies. At the time, he basically responded that none of those companies had a viable business model, and he didn’t understand how any of them could make money. Since he wasn’t one to trade on volatility, he stepped aside, was regarded as a dinosaur, and is now back to being regarded as the sage of investors. Perspective’s a funny thing.<\/p>\n

I think his aversion to derivatives mirrors his dot-com experience:<\/p>\n

In fielding a question about derivatives, which he once referred to as “financial weapons of mass destruction,” Mr. Buffett told shareholders that he expects derivatives and borrowing, or leverage, would inevitably end in huge losses for many financial participants.<\/p>\n

“The introduction of derivatives has totally made any regulation of margin requirements a joke,” said Mr. Buffett, referring to the U.S. government’s rules limiting the amount of borrowed money an investor can apply to each trade. “I believe we may not know where exactly the danger begins and at what point it becomes a super danger. We don’t know when it will end precisely, but . . . at some point some very unpleasant things will happen in markets.”<\/p><\/blockquote>\n

And, in fact, he brings the derivatives issue back to the mentality that ruled the dot-com era: volatility.<\/p>\n

Exacerbating the problem of derivatives and leverage is the short-term trading mentality and high turnover in the stock and bond markets, Mr. Buffett and Mr. Munger added. “There is an electronic herd of people around the world managing an amazing amount of money” who make decisions based on minute-by-minute stimuli, said Mr. Buffett, adding, “I think it’s a fool’s game.”<\/p><\/blockquote>\n

It seems that the Q&A is also a venue for people to grill Buffett about his personal life:<\/p>\n

A shareholder from St. James, N.Y., who said he brought one of his five daughters to the meeting, asked Mr. Buffett to explain why he supports organizations such as Planned Parenthood. “It just doesn’t seem to jibe with the hero that I studied,” the shareholder told Mr. Buffett amid boos from the audience.<\/p>\n

“Men set the rules for a lot of years, and I think it’s wonderful that women can make reproductive choices,” Mr. Buffett replied, as shareholders applauded and cheered.<\/p><\/blockquote>\n

Almost makes you wanna raise $109,500 to buy a single share of Berkshire Hathaway<\/a>.<\/p>\n

(Speaking of which, here’s a link to a PDF of the tangled web of investing in PetroChina<\/a>.)<\/p>\n

(Update: more coverage from a variety of sources<\/a>.)<\/p>\n","protected":false},"excerpt":{"rendered":"

Berkshire Hathaway just held its annual meeting, in which Warren Buffett fields questions from shareholders. For six hours. He’s 77. I’m just sayin’. Anyway, the Wall Street Journal had some highlights from the Q&A (I think it’s $-to-read, but that’s probably why Rupert Murdoch bid $5 billion for it, and not the Times or the … <\/p>\n

Continue reading “He hath a way”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[27,13],"tags":[],"class_list":["post-1492","post","type-post","status-publish","format-standard","hentry","category-big-business","category-sudan"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p4C7K-o4","jetpack_likes_enabled":true,"jetpack-related-posts":[{"id":3800,"url":"http:\/\/chimeraobscura.com\/vm\/warren-buffett-was-right","url_meta":{"origin":1492,"position":0},"title":"Warren Buffett was right!","author":"Gil","date":"April 14, 2009","format":false,"excerpt":". . . Still, when he said that derivatives were WMDs, I don't think he meant this.","rel":"","context":"In "Big Business"","block_context":{"text":"Big Business","link":"http:\/\/chimeraobscura.com\/vm\/category\/big-business"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1572,"url":"http:\/\/chimeraobscura.com\/vm\/mistakes-were-made-by-me","url_meta":{"origin":1492,"position":1},"title":"Mistakes were made (by me)","author":"Gil","date":"July 2, 2007","format":false,"excerpt":"Here's a neat little article on Warren Buffett's willingness to learn from his mistakes. \u00c3\u201a\u00c2\u00a0A key to investing well is a willingness to look stupid, Buffett says. \"Most managers have very little incentive to make the intelligent-but-with-some-chance-of-looking-like-an-idiot decision,\" Buffett wrote in 1984. Most would prefer \"failing conventionally.\" He added: \"Lemmings\u2026","rel":"","context":"In "Big Business"","block_context":{"text":"Big Business","link":"http:\/\/chimeraobscura.com\/vm\/category\/big-business"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1286,"url":"http:\/\/chimeraobscura.com\/vm\/unrequired-reading-jan-12-2007","url_meta":{"origin":1492,"position":2},"title":"Unrequired Reading: Jan. 12, 2007","author":"Gil","date":"January 12, 2007","format":false,"excerpt":"It's time for some post-birthday Unrequired Reading, dear unrequired readers! Christopher Hitchens \"reviews\" Ann Coulter. * * * Idiocracy is out on DVD. * * * An even-handed take on the mystery of how much oil is really remaining in the earth. * * * The zen of Jimmy Buffett.\u2026","rel":"","context":"In "Politics (explicit)"","block_context":{"text":"Politics (explicit)","link":"http:\/\/chimeraobscura.com\/vm\/category\/politics-explicit"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":296,"url":"http:\/\/chimeraobscura.com\/vm\/but-were-still-above-child-molesters","url_meta":{"origin":1492,"position":3},"title":"But we’re still above child molesters!","author":"Gil","date":"July 8, 2004","format":false,"excerpt":"According to a Harris poll, the industry I write about--which develops drugs and vaccines to heal the sick and improve quality of life--is regarded as poorly as oil companies and tobacco marketers.","rel":"","context":"In "Pharmaceuticals"","block_context":{"text":"Pharmaceuticals","link":"http:\/\/chimeraobscura.com\/vm\/category\/big-business\/pharmaceuticals"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":955,"url":"http:\/\/chimeraobscura.com\/vm\/way-to-rule-the-21st-century","url_meta":{"origin":1492,"position":4},"title":"Way to rule the 21st century","author":"Gil","date":"May 15, 2006","format":false,"excerpt":"It's stories like this one that keep me from taking China seriously. A U.S.-educated Chinese researcher returns to his homeland to develop innovative DSP chips for China's internal market, in hopes of breaking China's stereotype of a being a great at manufacturing and crap at innovating. He 'develops' a line\u2026","rel":"","context":"With 2 comments","block_context":{"text":"With 2 comments","link":"http:\/\/chimeraobscura.com\/vm\/way-to-rule-the-21st-century#comments"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":843,"url":"http:\/\/chimeraobscura.com\/vm\/grouse","url_meta":{"origin":1492,"position":5},"title":"Grouse!","author":"Gil","date":"February 14, 2006","format":false,"excerpt":"Because I wasn't the guy who got shot, I think the Cheney hunting accident is pretty funny. Maybe not as funny as Bobby Knight plugging a buddy while grouse hunting in 1999, nor beating up his son on another hunting trip (broken nose, dislocated shoulder), but still pretty good. What\u2026","rel":"","context":"In "Politics (explicit)"","block_context":{"text":"Politics (explicit)","link":"http:\/\/chimeraobscura.com\/vm\/category\/politics-explicit"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"http:\/\/chimeraobscura.com\/vm\/wp-json\/wp\/v2\/posts\/1492","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/chimeraobscura.com\/vm\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/chimeraobscura.com\/vm\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/chimeraobscura.com\/vm\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/chimeraobscura.com\/vm\/wp-json\/wp\/v2\/comments?post=1492"}],"version-history":[{"count":0,"href":"http:\/\/chimeraobscura.com\/vm\/wp-json\/wp\/v2\/posts\/1492\/revisions"}],"wp:attachment":[{"href":"http:\/\/chimeraobscura.com\/vm\/wp-json\/wp\/v2\/media?parent=1492"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/chimeraobscura.com\/vm\/wp-json\/wp\/v2\/categories?post=1492"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/chimeraobscura.com\/vm\/wp-json\/wp\/v2\/tags?post=1492"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}