How Is Warren Buffet So Successful?
Posted on May 20th, 2008 by Steve Skojec
I ask because he evidently has no concern for what putting someone like Barack Obama in the White House will do to our already sour economy. While he’s just hit $62 billion in personal wealth - making him the richest man in the world - I just saw him say in a CNN interview that he’d be happy with either a Clinton or Obama White House.
And yet, socialism doesn’t leave much room for men to build personal wealth empires. How can this guy be so good at investing and financial management without seeing that?
Filed under: Economics, What the...?
Because we’re not moving to exactly a State Socialist model, but more of a State Capitalist/Fascism model (cue Victor Morton to correct my political categorizations here…)
So, we’ll have state control for the Little Guys, but the Big Guys like Buffet who know how to play the system will still be able to amass and keep personal fortunes.
Maybe we should just go straight to ‘kleptocracy’ like the post-Soviet Russians did and be open about it.
peace,
Zach
Good question, Steve!
Short answer: Warren Buffett likes being in a monopoly position, or at least a de facto monopoly position. One of his biggest subsidiaries is GEICO, and it is one of the cheapest forms of something you are required by law to own, if you own a car. Like I said, monopoly, and I think that a health insurance mandate would be something he’d happily make money off of.
He also plays off our tax system. He’s a fan of high estate taxes, because 1) he can swoop in and buy the family businesses it is affected by, and 2) estate taxes are often paid through life insurance trusts, and Buffett sells life insurance, owns life insurance companies (like my former employer), and reinsurance to life insurance companies. The more complex the American system is, the more things he sells to help you get around it.
Oh, and he owns Pampered Chef too. So when all your friends are out of work, they’ll all be guilting you into buying stuff from them, courtesy of Warren Buffett.
More generally, value investors like Warren Buffett love a good downturn.
Buffet is a major contributor to Catholics for a Free Choice.
The reason for his sucess is diabolical. He is so incredibly revolting that he has turned me off the peanut buster parfait (He owns DQ).
DQ is krep, anyway.
Value investing strategies aren’t evil, though.