Warren Buffett’s Friend Turned Enemy
Warren Buffett is under fire! One of the millionaires he’s made now wants to bite the hand that fed him. “Thumb-sucking has not cut the Heinz mustard during the Great Bull Run!” Yikes, what’s all this about?
What on Earth could possess David Rolfe to throw all his toys out the pram, and sell a $10 million stake in Berkshire Hathaway (Buffett’s holding company)? Frustrations over a big pile of cash, funnily enough. The Oracle isn’t finding many wonderful businesses at wonderful prices right now, with over 120-billion-dollars gathering dust on the sidelines. Buffett calls it security. Rolfe calls it hoarding. With an investment in Heinz falling foul this year, Rolfe clearly feels he’s missing out on the “Great Bull Run.” He’d better throw some money at cannabis and FANG stocks before it’s too late!
Check out Berkshire Hathaway’s share price, by the way. $311,900! The Oracle of Omaha and his right-hand man Charlie Munger, know how to reward investors. At the peak of Buffett’s career (the 60s-80s), he was compounding cash at 23% annually with his value investing game plan. He makes it look easy. He buys a business for less than it’s truly worth, puts a genius in charge, and then sits back and waits for 30 years until the money starts multiplying on itself. Consistency. Patience. Prudence. A born investor, but also 88-years of experience. How will Berkshire fare after he and Munger are gone?
Not as well as it’s fared in the past, presumably. Berkshire is a different beast today, with so many broad-spanning investments already rooted down. It’s like an index fund, not a concentrated basket of royal stock picks. As such, returns have disappointed Mr. Rolfe, but what’s his next best option? His own returns have underperformed the S&P 500, so he can rule out Invstr’s fantasy league! He’d never survive!
