Over the weekend, everyone was forced to spend their Saturday perusing grandpa Warren's annual letter which was mercifully shorter than usual.
To be clear, no one I know actually wants to read Buffett's ramblings anymore. But being the good grandchildren we are, we humor him because after all, he took the time to write to us, and the least we can do after all these years is act like we care.
And you know, Warren doesn't ask much and he doesn't ask often. Most grandparents expect you to come listen to their bullshit every weekend in person, and God forbid they figure out how to use e-mail because then you're going to be getting something in your inbox on Mondays that clearly suggests they don't remember you were just at their house the day before.
Of course Buffett being Buffett, we're expected to not only pretend like we care what he says, but also to pretend like what he says is some semblance of profound when it almost invariably is not. Take this quote from the letter for instance:
Charlie and I view the marketable common stocks that Berkshire owns as interests in businesses, not as ticker symbols to be bought or sold based on their “chart” patterns, the “target” prices of analysts or the opinions of media pundits. Instead, we simply believe that if the businesses of the investees are successful (as we believe most will be) our investments will be successful as well. Sometimes the payoffs to us will be modest; occasionally the cash register will ring loudly. And sometimes I will make expensive mistakes. Overall – and over time – we should get decent results. In America, equity investors have the wind at their back.
I'm sorry, but that is right out of one of those market-themed books of purportedly wise quotes you might find yourself thumbing through while you're waiting in line at Barnes & Noble wishing you had just ordered whatever it is you're waiting to pay for from Jeff Bezos. And now that you mention it, I wouldn't be at all surprised if the excerpted passage above ends up in the 2019 edition of a tear-off desk calendar.
Buffett did say something notable about bonds and their "proper" place in a portfolio in this year's edition, but it was only notable because of the prevailing market environment. Of course to let the financial news media tell it, Buffett's high grade bond quote was the most profound thing anyone has ever said about fixed income.
Well on Monday, CNBC aired the obligatory Buffett interview with Becky Quick, who seems to only surface when Buffett is around, almost like she's some kind of Tinker Bell that can only be summoned by Warren.
At one point, the discussion shifted to his fledging healthcare joint venture with Jamie Dimon and Jeff Bezos and that, in turn, led to a mention of Teva which recently got a boost from news that Berkshire had taken a $350 million stake. Now cue the headline of the day from Bloomberg:
- Buffett Doesn’t Know Why Berkshire Bought Teva Stake: CNBC
That's right. It turns out Warren who, in his annual letter patiently explained how "Charlie and I view the marketable common stocks that Berkshire owns as interests in businesses" hasn't the faintest fucking clue why he owns $350 million worth of shares in a struggling Israeli manufacturer of generic drugs.
Apparently, he wasn't "personally involved" in the decision to buy Teva. As CNBC notes, "he said the investment deputies didn't tell him and won't if they sell it."
So I guess we can add another quotable to the new edition of grandpa's amorphous market aphorisms. Maybe something like this:
Sometimes the payoffs to us will be modest; occasionally the cash register will ring loudly. And sometimes I will make expensive mistakes. Other times, I won't have any idea what I own or who bought it nor will I know if what I didn't know I owned gets sold or who sold it.