Buffett/Berkshire - general news

[Sharad]

A pretty negative article on Buffett was recently published. I'm only going to read Market Watch's analysis of said publication. Here is Market Watch's take:

https://www.marketwatch.com/story/why-warren-buffett-is-a-prime-example-of-the-failure-of-american-capitalism-2018-02-15

[scorpioncapital]

"“Companies in Buffett’s portfolio have extorted windfall profits, ripped off taxpayers, and abused customers,” he says, adding that Buffett “makes no secret of his fondness for monopoly. He repeatedly highlights the key to his personal fortune: finding businesses surrounded by a monopoly moat, keeping competitors at bay.”"

Hmmm, same as governments I would say - another side of the coin. Government is the ultimate monopoly.

[gfp]

Interesting that "moat" is now equal to "monopoly"...  Apparently the United States is not supposed to allow any competitive advantage, brand name or otherwise

additionally, the author of the article in "the nation" appears to think Buffett is an investor in TransDigm.  News to me....

"Buffett takes full advantage of tax loopholes. He uses Berkshire Hathaway, a valuable tax shelter, for his investments."  We should all stash our investments in a C-corp.  Way to stick it to the government warren

[Dynamic]

The excerpts were full of non sequiturs. But the guy doesn't need sound arguments to sell books. He just has to find an appealing narrative for a receptive niche audience. His moat is in being different not in writing cogent arguments.

Buffett frequently refers to moats like Geico's made from passing on savings by being the low cost operator in a highly competitive industry thereby winning more business and restraining loyal customers.

Likewise BH Energy wins favor from customers and regulators by keeping costs low and investing in infrastructure. In return it is permitted a decent return.

He either hasn't paid attention or has conveniently ignored and misinterpreted the idea of moats.

[sleepydragon]

ever since Murdoch bought WSJ, I found the articles by WSJ (marketwatch is owned by WSJ) are very biased. Definitely very pro-trump. Sometimes you will see FT and WSj have totally opposite headline on some trump-related news on the front page.  I called WSJ and unsubscribed.

[RichardGibbons]

That article was total drivel.

Moat doesn't equal monopoly. Free competition doesn't mean no competitive advantages, it means trying to gain competitive advantages and overcome others' competitive advantages.  What does the guy envision, a USA where every product has completely generic packaging, no brand name, and the exact same ingredients and recipe as every other item?

The innovation he wants comes about because people are striving to gain competitive advantages. If you make competitive advantages illegal, you'll also eliminate most of the innovation.

I don't think I've ever seen an investment-related article that's so wrong in so many ways.

[rb]

Yea the guy who wrote that article is an idiot. But you drop some names and you get you idiot piece picked up by the likes of Marketwatch and drive traffic.

Some members made some very good points here that competitive advantages are not the same as monopoly power, etc, so I won't delve into those things. The truth is that if there's one thing that Buffett understands is competitive dynamics and he probably understands that better than anyone else. Berkshire invested in companies with monopolistic, near monopolistic, or oligopolistic attributes (I'll call them monopolistic here for short).

But what the idiot writer misses is that Berkshire didn't make money because of these monopolistic dynamics of these companies. Berkshire made money because they've bought them at a discount to intrinsic value. Furthermore they made money because some other idiot agreed to sell it to Berkshire below IV. I don't really understand what the author expected Buffett to do. Some guy comes to him and says I want to sell you this very profitable company with a great competitive position for half of what it's worth. Then Buffett should say no, I don't want that, I want to go out there and buy some piece of shit for a lot of money? That has nothing to do with capitalism, or any other economic system for that matter, it has to do with whether you're smart or stupid.

[DanielGMask]

That article was total drivel.

Moat doesn't equal monopoly. Free competition doesn't mean no competitive advantages, it means trying to gain competitive advantages and overcome others' competitive advantages.  What does the guy envision, a USA where every product has completely generic packaging, no brand name, and the exact same ingredients and recipe as every other item?

The innovation he wants comes about because people are striving to gain competitive advantages. If you make competitive advantages illegal, you'll also eliminate most of the innovation.

I don't think I've ever seen an investment-related article that's so wrong in so many ways.

Exactly! It’s incredible that this kind of article gets so much attention precisely due to the high reputation of the person which the article is clearly trying to damage.

[rb]

Exactly! It’s incredible that this kind of article gets so much attention precisely due to the high reputation of the person which the article is clearly trying to damage.

It's the world we live in... where clicks are all that matters. Some members here may hate pretty hard on the article, but they still clicked on it to read it. That's all good in the eyes of the author. Mission accomplished.

[Jurgis]

Exactly! It’s incredible that this kind of article gets so much attention precisely due to the high reputation of the person which the article is clearly trying to damage.

It's the world we live in... where clicks are all that matters. Some members here may hate pretty hard on the article, but they still clicked on it to read it. That's all good in the eyes of the author. Mission accomplished.

The funny part is that likely most of the people here (who presumably do the real-value-investing-DD (TM)) did not even bother to click another link to the real (long) article (on thenation website) and just posted their opinion based on Marketwatch summary click bait. 

Not that I endorse thenation full article.