Wednesday, October 24, 2012

Peak Warren Buffett?

October 24, 2012
Warren Buffett says global economy slowing with problems in Europe and decline in Asia

OMAHA, Neb. — Billionaire investor Warren Buffett said Wednesday that the global economy is definitely slowing because of continued problems in Europe and the decline in Asia.

But he said that the U.S. economy is still improving modestly and business will improve regardless of who wins the presidential election.

October 24, 2012
Warren Buffett's Timeless Advice: 'Don't Make This Mistake'

So, get into a bunch of wonderful businesses and stay with them...

The following chart shows Berkshire Hathaway stock adjusted for inflation.

Click to enlarge.

This is not a prediction. As a follower of trend failures and a believer in slowing growth theories, I simply ask a serious question. Peak Warren Buffett?

See Also:
Trend Line Disclaimer

Source Data:
Yahoo: BRKA
St. Louis Fed: CPI


Stagflationary Mark said...

As a side note, be sure to only get into the wonderful businesses.

How will you know if they are wonderful? Using hindsight, the stock price will be much higher when you look to sell them, lol. Sigh.

dearieme said...

I'm assuming that things won't turn up until after unsustainable debts are cleared or defaulted upon: there's a fair chance that another plunge down might occur before then. Whether we get stagnation or depression it's not likely that price inflation will fall to zero (at least not in the UK).

I don't think that hyperinflation would be adopted as government policy, though it could happen as an unintended consequence of some other government policy. In fact, many of the greatest risks that you might foresee could come about by government cock-up.

Rob Dawg said...

EVERY investment process/scheme/formula eventually fails for three reasons.

1. It works and thus loses margin.
2. It gets copied and thus loses advantage.
3. Input conditions adjust to minimize discrepancies.

Stagflationary Mark said...


If I had to guess...

1. We'll stagnate with 2% inflation.
2. The UK will stagnate with a bit more inflation.

That seems to be the trend anyway.

Stagflationary Mark said...

Rob Dawg,

And from a mathematical point of view, every exponential trend must eventually fail too. There are no exceptions.

Stagflationary Mark said...

This was actually the premise of one of my first posts.

September 25, 2007
Exponential Growth and Immortality!

I should probably mention one thing required when it comes to exponential growth before we break out into a song of sheer ecstasy.

mab said...

I lost all respect for Buffett during the 2008 financial crisis.

Here's a guy I never had any respect for:

Hedge Fund Guru

If a coin comes up heads six times in a row, then we just know it will keep coming up heads in the future. It's so freaking obvious.

Stagflationary Mark said...


From your link...

His frustration with Paulson is such that he's pulling out of a broader fund-of-funds platform entirely just to remove his capital from Paulson - even though the platform contains other funds he likes, such as DE Shaw's Oculus Fund, which is up by double digits so far this year.

I wonder what it is about DE Shaw's Oculus Fund that he likes right now. I guess it will remain a mystery, lol.

That's what I love about the whole industry. There are always going to be winners and losers, especially when mutual funds OUTNUMBER the actual stocks in the stock racket.

Um, I meant market, not racket. No idea where that came from. ;)

As a side note, it is difficult to lose money if you only invest in the best* companies and avoid the worst* companies.

* Best being defined as the companies, in hindsight, that performed the best, and worst being defined as the companies, in hindsight, that performed the worst.

mab said...

I wonder what it is about DE Shaw's Oculus Fund that he likes right now.

Ordinarily, I'd guess he likes the past performance - it's not easy to find lucky pennies, even for financial "professionals". Maybe the fund has really high fees, that's always a good sign. Then again, maybe it's the catchy name ........... "Oculus"

From the movie Wayne's World

Tiny: Wayne. How you doin'?

Wayne: Hey, Tiny, who's playing today?

Tiny: Jolly Green Giants and the Shitty Beatles.

Wayne: Shitty Beatles? Are they any good?

Tiny: They suck.

Wayne: Then it's not just a clever name.

Stagflationary Mark said...



Your comment got me to laugh from the first sentence and continued to build until the last one, lol.

mab said...


Here's a little Wayne's World trivia. In a scene shortly following the above quote, you can see some guys dressed up as jolly green giants in the backround. No joke, they're dressed just like the jolly green giant guy on the canned food.

You just know the writers and directors had a lot of fun detailing that movie.

Stagflationary Mark said...


I'll have to look for that next time I see the movie!