C&B Notes

Is Buffett Out of Step?

Jason Zweig recaps Warren Buffett’s and Charlie Munger’s case for successful results (and for good sleep at night).  As we discussed in a recent letter to our partners/clients, the willingness to look foolish relative to the broader market for extended periods of time is a key factor in long-term investment success.

…when the market does poorly, Mr. Buffett tends to shine.  In the S&P 500’s 25 worst months since 1996, the index racked up average losses of 7.9%, according to Mr. Gambera.  Berkshire went down by an average of just 2.9%.

Mr. Buffett doesn’t like leverage, scoffs at macroeconomic forecasts and loves to keep cash sitting around.  He is the last person you should take advice from on how to thrive during market bacchanalia like this one.  But if the past is any guide, just when Mr. Buffett seems to look most like a loser, the party is about to end.

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