No this is not a simple post on the Oracle of investing…but just clearing the air for some people.

Who is WB?

He is a brilliant investor. There is no doubt that he has created a lot of wealth for his shareholder. Does it make him the greatest. Well we will discuss that later on.

He is NOT a fund manager. Many people think of him as a fund manager. That he is not. You cannot compare a Prashant Jain, a Peter Lynch, or any other fund manager. W B can buy 76% of a company, take it private, build up strength, and then take it public again. Fund managers cannot do that. WB can change the management, change the auditor, change the banker, change the method of funding…..but fund managers cannot. P Jain can buy 4-5% and hope that the management is not bad. If he finds that the management is bad, he can sell that is all.

He is a businessman: Make no mistake. He is the CEO of Berkshire H…y. He does all that which is good for his company. He is an unabashed salesman – he sells products that is made by the companies in which he has invested. So he will talk about WSJ, Coke, Gillette, ….etc. etc. If he invests in India he will sell you Bajaj Alliance insurance. No doubt.

This is good and amazing. I know of MDs who would be ashamed to talk about their products. As a salesman WB is just on top of the world. Typical aggressive American salesman. This is how a MD should be.

Philanthropy: WB is a great philanthropist and there is no doubt about it. However his critics can find a fault here too! He started giving and distributing his wealth only after his 70th birthday (I am not a historian) – however he is asking people who are much younger to give it away NOW.

more to continue….

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  1. Just thought of adding one more point which I find as significant in the comparison between him and a fund manager.

    He can take out cash from a company which generates very good free cash flows but has less working capital needs and invest it anywhere he likes. Example he gives is See’s Candy. I think not only fund managers even a lot of businessmen will find it difficult to do this.

    Regards
    Raja

  2. He was right about one thing though: Philanthropy will be as much in ‘demand’ now as it will be 70 years later -but 70 years later the businessman can donate a very very very big amount of money thanks to compounding and the businessman’s savvy to grow their investments. So why give away your little money now rather than later when you can have a bigger impact.

    His views on taxation are hypocritical-he wants rich people to be taxed highly -but he himself gave away all his wealth to a private charity(Gates foundation).If he thought taxes given to govt babus was a good idea,perhaps he should have willed all his money to the govt.Buffet is a democrat,and a pro bailout “insider” -his folksy image notwithstanding. I’d prefer his much more sensible father -Howard Buffet who was a fine congressman for so many years and one of the most fiscally conservative politicians ever – a taxpayers true friend

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