Discussion about this post

User's avatar
The Rational Walk's avatar

Working in software in the Silicon Valley in the late 1990s put me in the center of all the excitement. I worked at a small company in the same office park that eBay occupied and remember the day of the eBay IPO. Pretty much everyone was into tech stocks. I had little money at the time, and what I had I put into a down payment on a home, so that kept me out of trouble. But I did speculate in some Intel stock despite following Buffett’s letters starting in 1995. In early 2000, I sold out of Intel at nosebleed levels and bought shares of Berkshire with the proceeds, shares I still own today. Needless to say, Buffett saved me from much folly. Whether it is working for an understanding manager or having the right role models, listening to the right people is really important for young people.

Expand full comment
Arthur Clarke's avatar

Two comments:

Warren once said to me, in his office, “I measure my performance as manager by how few shares trade.” To which he added that that view was not shared by his fellow CEOs or on Wall Street. Morningstar once identified the number one fund over the previous 10 years. It was Ken Heebner’s CGM Fund. Indeed, it had outperformed the index by a wide margin. MS then was, somehow, able to obtain the performance records of the actual CGM investors. Shocking: they had, on average, not only underperformed CGM but the index by a wide margin. The lesson: Heebner was totally focused on beating the market and not helping investors to think like long-term, patient owners. He failed the Buffett measure.

I attended the annual meetings at the top of the dot.com bubble and the one after. The exchanges in the Q&A were enriching. At the first many of the questions began with a preamble of the like, Mr. Buffett, you are a great investor—you have made us a lot of money—, then came the however: couldn’t you buy just a few high-tech stocks? To each question he answered carefully, if you can’t reliably predict future earnings, you can’t estimate a present value. A young woman brought the house down, with Warren enjoying it, too, when she said, in her preamble, that she had bought some Berkshire shares hoping they would help her pay for college; now she was looking at junior colleges. The next annual meeting, the preambles began with, “Thank you, Mr. Buffett”. They were thankful that he had taught them a valuable lesson. I’m quite sure they are all off 25 years later.

Expand full comment
10 more comments...

No posts