That is an enormous understatement. At 94, Buffet has witnessed history and has represented a vision of betterment, a just society, and sound economic stewardship. These things were not and are not hallucinations.
But for many, it seems, the lessons about co-operation, stable economic growth. the sane application of democratic principles, and the rule of law must be learned again.
It's the end of an era bona fides and respect for truth and accountability as the structural integrity of democratic society.
I will say that his pragmatism seemed to fall apart pretty quickly when the rubber met the road - unless I’m misinformed (which I may be).
Berkshire was a key player in the rail workers strike of 2022 and Warren didn’t seem to want to give an inch to the working man when given the opportunity to do so.
IIRC they had PTO days which were apportioned pretty generously, but they didn't have sick days broken out separately. This doesn't mean they had less time off in general than the prevailing compensation packages. It was a great talking point for the media. However, TBH having a 'here's a bunch of time off, do what you need to with it' is kinda better than 'here's some time off for you to vacation, but then this other amount is only usable if you're sick, and if you're not sick it's money left on the table.'
Nothing crazy about that. It's mostly European countries that have mandatory paid sick leave by law for everyone, as they fought for that right in the post-war times when the economy was booming and the world outside the west less safe from outsourcing, and importing cheap labor less easy, so the perfect storm giving labor most power over employers, something that's not gonna repeat again in the globalized world of today.
It was the temporal global exception, not the rule, as the worldwide norm was working people to death for most of history. Companies would gladly give their workers zero benefits if they could get away with it.
Compensation packages are just that - a package. Complaining about one individual component in isolation is disingenuous.
Unions sent a couple of the big car makers into bankruptcy. They've sent all kinds of companies into bankruptcy - the idea that anything they are suggesting is good by nature is about the same as suggesting communism is good by nature. Sounds pleasant, doesn't work.
> Unions sent a couple of the big car makers into bankruptcy.
It goes both ways, unfortunately. Industry in general couldn't exist without laborers, and it has a long history of brutal abuse and horrific, dangerous working conditions that killed and maimed many.
I think it's a cultural problem. We aren't far removed from a time when the general business model was to coercively work people to death to extract every penny of value from them, and that mindset hasn't completely been lost. Workers are callously discarded, not at the doorstep of bankruptcy, but at the first hint that profits might not grow as fast as they could.
Yup, it goes both ways. It's not a given that what a company is proposing is good or bad, and it's not a given that what a union is proposing is good or bad. And they negotiate and it is what it is.
Businesses that can't stay afloat without underpaying workers have a failing business model. Blaming unions for their eventual demise is foolish.
Communism and Capitalism are actually quite similar in a sense. Neither of them works well in their purest form, both lead to formation of an oligarchy (party elite,billionaires). Most livable countries in the world mix them in form of free market social democracy.
>Businesses that can't stay afloat without underpaying workers have a failing business model.
Yet companies have flourished under that model for decades/centuries. Employers and governments have plenty of levers to make sure workers have no choice but to work while being underpaid.
The idea that profits are more important than basic humanity is preposterous.
The unions wanted sick leave, because under the current system, employees were scheduled weeks in advance with zero margin. If the employee was sick, they had to ask for PTO which would get denied because of lack of notice and any margin (other employees to cover the job)
When a company loses money year after year it goes bankrupt. The company disappears. The workers lose their jobs.
It is important for a company to earn a profit. You'll find companies like google and facebook, who are making fat profits.... pay fat salaries to their workers.
They pay fat salaries because the talent they need is in high demand, not because they have fat profits. In any industry where that is not the case, a union is a must.
> When a company loses money year after year it goes bankrupt. The company disappears. The workers lose their jobs.
If the company operates in such razor thin margins that it can't provide for sick leave for employees, something is terribly wrong.
> It is important for a company to earn a profit. You'll find companies like google and facebook, who are making fat profits.... pay fat salaries to their workers
And you'll find that most companies pay as little as they can get away with. Google and Meta need to compete to get a limited (until recently) amounts of top talent.
It's called competition - it's the reason you get to sit there and type away on an incredible machine at a very low cost and eat food at a very low cost... The vast majority of businesses are operating on thin margins. Get in the real world, not some fantasy land.
Competition is not the reason. The reason is workers choosing to improve things, invent things and make things more efficient. Competition is a way to incentivize people to do that, but it's not the only way.
The evidence for (price) competition improving production efficiency and product fit is overwhelming, examples abound in everyday life, it's hardly worth mentioning.
What are some notable examples "workers choosing to improve things"?
Most innovation is done by workers working for some company, no? Product development, research, etc is usually done by workers for a salary, not because they're competing against someone. Competition is not needed for paying people to improve things.
Competition has a lot of negative effects as well. Competition by definition has losers. Competition leads to resentment and conflict. Competition forces people to do things they might not want to to survive, because the moment someone is willing to do something to get an edge, everyone is forced to.
Workers don't get to do that without some capital allocated. Rowing is one thing, deciding direction is just as important - and you'll find that the people deciding which way to row are largely trying to win.
Deciding direction is also just work. Why does the reward for that kind of work have to be ownership over the work other people do? An architect makes decisions about a building, a doctor makes decisions about treatments, a developer makes decisions about software architecture without needing to own the resulting building, patient or software, and they usually try to do their best.
As long as there is some link between the quality of work you do and the rewards you get, people will in most cases try their best. Allocation of capital is no different, and in my opinion should not be treated differently. Giving capital allocators ownership/percentage of the work others do is too much, and leads to unnecessary centralization of power.
Because everyone involved agrees to it. If you want to be a dictator and decide what others can and cannot agree to, go try. I'm an employee, I agree to do certain things and the company agrees to certain things. No one is forcing either side.
Everyone "agrees" to it because there's no other choice, it's the system we have. Everyone agrees to it the same way people in communist countries agree to do what the state tells them to do. Most people have to agree, or the whole system will collapse.
Even if you could say that people truly choose to give a piece of their paycheck to someone simply for being named the owner, it's not a reason not to consider limiting that right to choose. We limit many things that we consider harmful. This system is producing ever increasing inequality of wealth and power. There are now people so wealthy that they're able to break democracies. This will only get worse and worse.
It's not remotely close to a communist country - folks have many choices as to who to work for and on what terms. Employers have all many choices as to who to hire on what terms. Both sides have to agree. Employees jump around from company to company all the time.
Someone can decide to start a company tomorrow and keep 100% of the outcome (less taxes) if they want to do that instead - it's trivially easy to be 100% owner of a business - a couple hundred bucks online and you can set the legal entity up in minutes. Now, you then have to provide sufficient value to customers so that they make the choice to part with their hard earned dollars - and that's where it all falls down for many. But it has nothing to do with power or lack of it.
I'm typing this on a Macbook Pro, which is made by Apple with their net profit margin of 24.3% for Q4 2024. BNSF, one of the companies which is the topic of this conversation, has an operating ratio of 68% for 2024 (how much of their revenue goes towards operational costs). Their net income was $5 billion. They can afford to have a little extra employees to cover fucking sick leave.
> Get in the real world, not some fantasy land
Get out of a libertrarian's wet dream and look around you, read up a little bit on various companies financials.
>I'm typing this on a Macbook Pro, which is made by Apple with their net profit margin of 24.3% for Q4 2024.
Apple's margins are so high because the margins of their suppliers are so low (used to work for one of them) with some used to have suicide nets at their factories. Apple is an exception worldwide when it comes to HW margins, not the norm.
>They can afford to have a little extra employees to cover fucking sick leave.
Shareholders care more about line going up then about the welfare of the workers.
Apple barely make the product. Look at the margins of all their suppliers. That fat line showing about $200b of cogs is filled with low margin businesses - the vast majority of the world is not some outlier like Apple.
Gotta look more than one layer deep financial statement guy. People who actually read a lot of financial statements have looked at a looooot more than the ones of the names on TV.
The topic of this conversation is BNSF and their ilk, I just threw Apple as a fun "you're even more wrong with your anecdote than with your main statement".
What's your excuse for them abusing their employees? Why can't they afford to provide sick leave for their employees when not only do they have billions of net profit every year, many other railways around the world in the same type of business manage to do that and be profitable.
That link mentions a dispute between 12 unions and 6 rail companies one of which is amongst the dozens of companies owned by Berkshire, run by Buffett. I see no mention of Buffett personally getting involved?
...more personally involved than owning a large part of the company and directly running it? How much more personally involved can you get? Otherwise corporations would be above accountability. The whole system falls apart if executives and the board (and ideally, shareholders) can't be considered personally responsible.
> and directly running it? How much more personally involved can you get?
Ms. Farmer is the CEO of BNSF Railway[1], she is the one “directly running it”.
Moreover, Berkshire/Buffet is notorious for _not_ micro-managing, for letting its subsidiaires enjoy greater autonomy than they would in an usual conglomerate.
Right, but what is the point of letting companies own other companies if this also doesn't imply transitive accountibility? It's hard to imagine we can't find reasons to imprison the board of blackrock, for instance. Such a massive company has disproportionately small social responsibility.
We should extend this logic of accountability. If your kid does something wrong every living parent and grandparent should be held accountable. The world would instantly be better.
Deteriorating conditions for the working class are the main driver of our push toward authoritarian government. A pragmatist would have been more sympathetic for reasons beyond pure capitalist economics.
> I just don’t buy this argument. By global standards, even the poorest Americans (with obvious exceptions like the homeless) are relatively wealthy. Comparison is the theft of joy.
Define wealth. The cheapest option for many foods in other countries is often not only much cheaper, but also of much higher quality than the cheapest option for the same type of item in the US (bread, rice, etc..) in fact their cheap version could easily be pass for the US premium grocery version.
Bad education system and social media contribute too. Manipulating the masses has never been as easy and cheap as it is now. Russia in particular knows how to do it in scale.
I just don’t buy this argument. By global standards, even the poorest Americans (with obvious exceptions like the homeless) are relatively wealthy. Comparison is the theft of joy.
You say comparison is the theft of joy, and then ask us to compare to an irrelevant metric.
If living standards are falling, grocery prices have increased, rents have gone up, wages have stagnated, what does the price of eggs in China have to do with my assessment of the local conditions.
Over what period of time have prices at grocery stores and rents not increased? Food and clothes are cheap by historical standards as a percentage of income.
Well it would be one thing if it were an inevitable natural conclusion. But working people are getting poorer because the owner class is hoarding wealth. It’s simply unjust. It’s the difference between losing your house to a hurricane and having someone burn it down.
> Deteriorating conditions for the working class are the main driver of our push toward authoritarian government
I don’t buy this anymore. The evidence is for a simpler hypothesis: 20 to 30% of Americans are stupid. They vote against their own economic interests, which doesn’t make sense if wealth is the problem. My personal hypothesis is lead exposure. But further empowering that segment with wealth strikes me as counterproductive.
Doesn't explain it at all. The biggest swing from 2020 to 2024 was people under 45 voting for Trump at a much higher rate, mostly driven by men. Anyone under 45 was born at least 5 years after lead gas was banned in cars. They're mad because they don’t see a path to the future they were promised. Calling them stupid is patronizing and counterproductive, even if true.
I’m not saying all Trump voters are stupid. Just that there is a stupid subset that are not rationally motivated. It’s productive to call this out, because I think it requires reworking our political system to deal with their threat. Fortunately, MAGA seems eager to set the precedents we’ll need in the future. (It’s also not patronising because I don’t care what they do as much as that they don’t cause problems for other people. That’s defensive more than patronising.)
Are you using rationally motivated synonymously with economically motivated?
There there's a lot more that motivates voters besides economics.
My hypothesis is that it is simply broad spectrum culture war. Mass communication and global human mobility have simply raised the stakes or control over social Commons. The same time due to related factors, there is low agreement on shared social rules, vales, and priorities.
In the sense that good fences make good neighbors, there is no clear fence today.
There is no trust in institutional norms to provide protection, so every battle for power seems existential.
I find it hard to argue with this. Real politik and the rule of the jungle have always been in effect. It is just less dramatic when there is consensus on the rules and limitations.
I propose another hypothesis, those that haven’t learned of the desire for real change instead of stagnant leadership will continue to make the same mistake each election cycle.
Learn to read the signs instead of calling people stupid for not agreeing with you, and then following it up with an attempt to force their alignment.
You are speaking as if there is a single objective agreement between people on what constitutes the most pragmatic answer. There is no such agreement. The foundation of liberalism is that we can not agree on first principles. An authoritarian crackdown is just as much an expression of pragmatism if the actor believes they can win.
> Deteriorating conditions for the working class are the main driver of our push toward authoritarian government.
No, they aren't. It's dubious that even the widening relative gap between the working class and the capitalist class plays a major role, though that at least has the virtue of being a real condition and not a fantasy.
If you have an alternative hypothesis, I’m all ears. The lack of good paying jobs and the knock on effects of expanding wealth disparity seems to be underlying most of the issues driving radicalism, left and right, up and down.
In America, at least, workers think tomorrow will be worse than today and they are resorting to populism to try and reverse the trend.
I don’t think it’s accurate to say that the working class is “resorting to populism to reverse the trend.” If anything, the fact that so many working-class voters support a wealthy oligarchy—one that consistently advances policies benefiting the super-rich at the expense of ordinary people—suggests that a significant portion of the population is being swayed by misinformation and manipulation, not that they’re successfully advocating for their own interests.
Ironically, it’s often the opposite party that actually pushes for policies that would materially benefit the working class. The real fallacy is equating the current wave of so-called “populism” with a genuine effort to improve conditions for workers. In practice, what’s being called “populism” is frequently just another vehicle for entrenched elites to consolidate power, not a movement to empower ordinary people.
All the Democrat led states have paid leave and higher minimum wages/overtime exempt laws. And higher unemployment benefits. And longer leave times for new moms. It’s also the Dem states that have free school lunches for kids and more robust Medicaid funding.
Democrats passed ACA, which made insurance even possible to purchase if you weren’t offered it by employer, and the annual out of pocket maximum, ban on pre existing conditions as a criteria for calculating premiums, and ACA premium credits made it more attainable than it was before ACA.
Build Back Better bill a couple years ago would have made paid leave policies nationwide and provided more assistance with childcare.
> Democrats passed ACA, which made insurance even possible to purchase if you weren’t offered it by employer, and the annual out of pocket maximum, ban on pre existing conditions as a criteria for calculating premiums, and ACA premium credits made it more attainable than it was before ACA.
Have you actually ever purchased a plan from the website? The last time I checked, the costs were the same as if I had a plan on my own. Also you could get policies prior to ACA, but were subject to health exams and non-coverage of preexisting conditions. In fact, one could argue that all ACA accomplished of benefit was forcing coverage of preexisting conditions. But let's also not forget the fine, which was applied to people who did not have health insurance under the assumption that it was a choice. In reality, people don't have health insurance if they can't afford it which made the penalty functionally a tax on the poor.
You speak of ACA like everybody will agree with you. A decade later I'm still mad at Obama and want my $4k back.
>In fact, one could argue that all ACA accomplished of benefit was forcing coverage of preexisting conditions.
Aka giving people access to healthcare.
Health insurance is not real insurance, it’s a facade where we pretend premiums are not taxes.
99% of people could never afford the healthcare they get, they would just die. Which is fine, but there is no situation where healthcare + low taxes (wealth redistribution) exists.
So it’s high taxes + healthcare, but with a flattening and top heavy population age histogram, even that doesn’t work.
The worst is when old people only get healthcare (Medicare, which is all there was before ACA). A country is doomed if it’s just sacrificing the future to eke out a few years its oldest.
> If you have an alternative hypothesis, I’m all ears.
How about if I let you do that:
> In America, at least, workers think tomorrow will be worse than today and they are resorting to populism to try and reverse the trend.
See, belief about likely future conditions is a very different hypothesis than factually-existing current conditions, and a better one. To the extent that, IMO, its at least part of the actual explanation.
It sounds like you think material conditions haven’t gotten worse? Cost of housing, food and healthcare, plus flat wages seem to disagree. I think in this case people’s perception matches reality.
I’ve noticed you refuse to put forward your own reasons, why is that?
> It's dubious that even the widening relative gap between the working class and the capitalist class plays a major role
This description could apply to the French Revolution, Tsarist Russia, the fall of the Weimar Republic, and the Colombian Civil War. Why do you think it is dubious?
They stood clearly and simply for good moral judgment, fair systems and looked at the bigger picture to carry most people forward. They also based all their decision in facts, truth and science. They learn't their trades (economics & politics) over time and weren't afraid to adapt as times changed.
Their slow and steady presence did more for equality and fairness than many others. We will need to find these values again after the current times have played out.
I cannot believe that there are people praising Merkel with a straight face. She is literally a laughing stock in Europe, I put her as the poster boy for immigration crisis together with the energy crisis. The only thing she did was shove problems further in the future not caring about the consequences.
I think you have a strange definition of "laughingstock". Germany went from an economic powerhouse of Europe to factory shutdowns and a bunch of bumbling sniveling elites who are afraid of the people they are leading and want to ban them from having a say.
> They stood clearly and simply for good moral judgment
Merkel has severely underestimated Putin. She played a role in the continuous betting on Russian oil. Merkel has called the internet “neuland” and wasn’t her government also the one starting with hydrogen subsidies. I donno about you but to this day I only hear lots of talk about hydrogen but near zero results. So all the wrong bets.
Also I don’t know whether you noticed but Germany is expected to be in a recession for three years in a row now.
About equity and fairness okay I guess you are right. Everybody in Germany will be poor if things continue like this.
Buffet was "carrying most people forward" how exactly? Squeezing companies he had shares in to be as efficient as possible, leading to poorer quality and outright dangerous working conditions isn't bettering anyone other than shareholders, which aren't most people.
She shut down nuclear power because of extreme pressure from the population. Tens of thousands protested around her office. Nuclear is complicated (and mostly fear driven) in Germany. Oddly enough the first exit was done under Schröder who is a russian asset. Makes you think.
Germany has a population of 84 million people. 10,000 should not be able to dictate a policy decision of this magnitude, regardless of how loud they are.
> Nuclear is complicated (and mostly fear driven)
The politics of nuclear are complicated, the science (more engineering) of nuclear are complicated, the imperative is clear and simple. You are correct that it's mostly fear driven, but stoked by "green" advocacy organizations and/or manipulated by people with a stake in the continued use of fossil fuels (and largely the latter funding the former).
True leadership would stand up to both of these pressures, making people understand that the voice of 10,000 (or even 100,000) people can not dictate policy alone and educating people on the reality of nuclear power, while also fixing some of the real issues with nuclear power (an aging power plant fleet and an inability economically build better replacements).
The protestors were not a very vocal minority, but representative of the majority opinion. At the time well over 80% of Germans wanted an end to nuclear power. (Although now following the Ukraine invasion and rising energy costs the opposition has significantly softened.)
In a democratic system it is simply difficult to maintain such extremely unpopular positions. Governments which do so don't last long. Merkel flip-flopped and maintained her Chancellorship.
Sure, NRX and NRU were research rigs running experiments far outside normal reactor envelopes. And I think it's amusing that it's considered INES-5 when very little actually happened and there was...no..wider...events... literally. If the worst we can cite is a 70 year old research accident that killed no one and ultimately produced design fixes we still use, you have a the strong case for nuclear safety...Anyway: The Walrus needs to find some new civic interest story around Barrie to write about or something, it's an awful rag. We could decarbonize our grid completely with 15 new reactors, if I was PM we'd be popping them up like it was CANDU Christmas.
She finally agreed to shut down nuclear because Fukushima happened just a few days before the state elections of Baden-Württemberg. She was afraid of a rout so she agreed to do the above, and her party lost to the Greens anyway.
Measured governance. I feel the same, although I'm sure the Europeans and Germans not at all, but they also talked Angela out of nuclear, so one might argue the Germans are a bit too measured compared to their Chancellor.
Don't forget the climate-change-decision-accelerating decision to mothball all their nuclear reactors. This was a monumentally poor strategic decision from multiple angles.
"The current times" are a direct result of decisions like that of Merkel to throw open the borders of Germany to a million unchecked foreign men. If there's one reason that the AfD is the largest party in Germany today, it's because of that decision Merkel made a whole decade ago. How was that "based in facts, truth and science", or "slow and steady"?
The million unchecked foreign men (and women) are presumably propping up the German economy as we speak.
There will always be people that dislike change, but it may ultimately be better to start integrating them earlier rather than later. If you make it through the bad times (e.g. now), at the other end is the outcome you desire.
> The million unchecked foreign men (and women) are presumably propping up the German economy as we speak.
The refugee crisis didn't appear to have a significant impact (positive or negative) on the labor market based on a recent study by the IZA and ZEW [0] - "Our estimates suggest that those migrants have not displaced native workers but have themselves struggled to find gainful employment. We find moderate increases in crime, and our analysis further indicates that while at the macro level increased migration was accompanied by increased support for anti-immigrant parties, exposure to asylum seekers at the micro level had a small negative effect." [0]
There are systemic issues with the German economy that aren't related to immigration. A lot of the current malaise can be attributed to the economic slowdowns in Russia (with the Russian Invasion of Ukraine) [1] and China (due to Zero COVID and the subsequent indigenization) [2], due to how tied German industry was with both markets [3].
>The million unchecked foreign men (and women) are presumably propping up the German economy as we speak.
How many of those unchecked are women? What's the point of having borders then? Or law enforcement putting criminals in jails, when they could be out there propping up the economy. As long as your illegal activities are putting money into the state coffers, you should be allowed to continue unchecked, screw the laws.
Yeah sure, they might cause some trouble for the lower and middle class living amongst them, but think of the economic gains for the top 1%! Their real estate and stock portfolios have never looked so good. And if people vocally disagree with this you call them fascist and put them in jail for threatening your "democracy".
How does Poland's economy manage to grow faster than Germany's without illegal immigration? Maybe they can send some researchers there to find out.
> a vision of betterment, a just society, and sound economic stewardship
Please point out one case in which he wasn’t firmly on the side of capital over societal advancement. As far as I can tell he is deeply invested in oil and keeps shilling Coca Cola (and that’s probably only the surface).
> At 94, Buffet has witnessed history and has represented a vision of betterment, a just society, and sound economic stewardship
How exactly did he "represented a vision of betterment, a just society, and sound economic stewardship"?
> But for many, it seems, the lessons about co-operation, stable economic growth. the sane application of democratic principles, and the rule of law must be learned again.
Who are these "many" that need to be taught about those "democratic principles" and the "rule of law". How are these related to Buffett?
> It's the end of an era bona fides and respect for truth and accountability as the structural integrity of democratic society.
I met a lady in her 90s who looks and acts the same age as her daughter, who is in her 60s. She lives independently, talks quickly, walks without a cane, and has a generally youthful appearance and demeanor.
I asked what her secret is to aging so well. "I don't know, just don't have any health issues, I guess", she said.
Maybe if you can make it that long without encountering Alzheimer's, Parkinson's, cancer, heart disease, osteoporosis, arthritis, or various other major issues... then you basically have a decent shot at still being fine and healthy at 94.
Maybe. But I often think about my grandparents. Both lived to be 96. Neither had significant health issues until the day they died.
My grandmother was extremely active throughout her life. She worked out. She was active at church. She volunteered throughout her 70's and 80's. She was always happy to go out to dinner with anyone that wanted.
Most of my memories of my grandfather (her husband) where him sitting on a recliner watching TV. He rarely left the house.
Their quality of life in the last 15 years of their lives was so different. Grandma died on her feet. She had a heart attack in the middle of the night and that was it. The day before she had been out with friends and had dinner with the family. My grandfather just sort of wasted away. He was weak, frail, and kind of miserable.
All I'm saying is there sure seemed to be a lot more than dodging all of those diseases and issues with those two. My grandmother invested in herself. She worked really hard to maintain that quality of life.
And no amount of good doctors can make you change your lifestyle. At the end of the day, a ton of doctor advise is ways to change your lifestyle, and that takes personal effort.
My father is 98. His health has declined gradually but visibly over the last 10 years. He's taking a mouthful of pills each day to keep himself alive. However, he's able to get up, walk, use the bathroom, feed himself etc. He can remember things that happened 5 minutes ago, last week and in his childhood. He keeps up to date with all the family affairs, and watches the news. Also my mother (his wife) is still alive and healthy, and they don't hate each other.
That's more than most people can expect if they even make it to their late 80s.
Frankly I'm astonished at people like Warren Buffet and David Attenborough (a hero of mine).
Generally I'm really glad that HN has resisted the social media brain-rot trends, but sometimes the ability to react to a comment with a heart emoji would be cool.
I think for the upvoter, sending an upvote can trigger that same feel-good, "I agree to this!" dopamine hit as an emoji reaction would.
For the upvoted, seing their magical internet points go up can also feel the same as the notification that they received your heart emoji.
BUT - for the network, having scores be hidden and not displaying a loot of emoji reactions on each post makes a huge difference - it changes the incentives.
You don't get socially rewarded for engagement, because the loot is invisible in the thread (aside from being shown higher on the page). This disincentivizes Reddit-style snark, Twitter-style dunks, etc.
This probably disproportionally tends to attract the kind of people who like discreet positive reinforcement for smart well thought-out comments.
I’m not sure if it’s originally his but a small talk by him about getting a car made an impression on me and since watching it it’s become a good motivator to stay in shape.
The interesting thing about this is that Buffett himself has never really had a reputation for taking care of his body in terms of getting exercise or eating well.
At 94, there have probably been a dozen contradictory versions of what "eating well" meant to a large consensus of people. There should be a lot of skepticism for any particular version of "healthy" is when it comes to diet.
"Variety and moderation" is probably good enough advice for most people without specific health conditions.
Yes, but Buffett’s diet has been famously bad and well documented in the media. Cookies and ice cream for breakfast according to one article on LinkedIn by Bill Gates. Daily McDonalds, hamburgers, and a lifelong love of (addiction to?) Coca Cola.
So while the definition of eating well has always changed, I’m not sure it was ever what Buffett reportedly does. And if Buffett’s diet is actually as reported, he is likely an outlier in terms of typical effects of such a diet into old age.
“If I eat 2,700 calories a day, a quarter of that is Coca-Cola. I do it every day.”
I saw him at the Berkshire meeting about 25 years ago and he did walk very briskly. He probably figured he could exercise that way and get places quicker. He was always good at thinking that sort of stuff out.
> “It’s a big mistake, in my view, when you have seven and a half billion people that don’t like you very well, and you got 300 million that are crowing in some way about how well they’ve done - I don’t think it’s right, and I don’t think it’s wise,” Buffett said. “The United States won. I mean, we have become an incredibly important country, starting from nothing 250 years ago. There’s not been anything like it.”
I’m a bit slow in this field. Could someone explain how this quote relates to tariffs? I’ve re-read it three times now, looking for the connection to a tax on imported goods, but I just can’t see it.
I think it’s saying that the US population is crowing about how well we’ve done, and so we should be able to tax whatever imports we want? But what an odd way to say that if so. How well we’ve done seems completely unrelated to tariffs.
Then the quote caps off with some back-patting about how we’ve only been around 250 years, and that our rise is unprecedented. Again seemingly unrelated to tariffs.
Part of the justification for tarriffs is that America is somehow being 'taken advantage' of by the rest of the world and the tarriffs are the rest of the world finally paying their fair share. The reality is that (until now) America has had a uniquely privileged position in the world economy that got America, in general, very beneficial trade deals.
He's commenting on the attitude driving the tariffs.
The only unique thing about America is free markets. Any country can become highly successful by enacting free markets. The only thing in the way is their disbelief that they work.
There's a common thread across the world and history. The more free market a country is, the more it prospers.
This is only true if you ignore the important material and historical factors that go into the success of a country. Like for example, the immense wealth of natural resources and variation in climates that the US has. Or how about escaping much of the devastation that Europe faced in WW2 and benefiting immensely from helping them rebuild. Or having (for the most part) incredibly safe and stable relationships with neighbors to the north and south. Free markets have certainly contributed to success, but to say it's the only unique thing about America is just wrong.
The Sovied Union and Communist China all had vast natural resources. But a third world economy.
Japan, S Korea and Hong Kong have next to no natural resources. Great prosperity.
Germany turned to free markets after WW2 and enjoyed the "German Miracle". (Germany has since turned to socialism, with predictable results.) Germany received far, far less Marshall Plan money than Britain and France, who had no miracle.
> but to say it's the only unique thing about America is just wrong
Consider, for a moment, the state that China was in at the conclusion of WW2. It hadn't even industrialized yet. The British and the Japanese absolutely trashed China for over a hundred years!
Russia was also not industrialized until after their revolution in ~1920, and suffered horrific losses in the homeland during WW2.
The US emerged from WW2 fully industrialized and nearly unscathed. The US mainland remained untouched throughout both world wars.
The starting positions were far from equal. You attribute too much to free markets.
China didn't industrialize until after 1978, when they gave up on communism and began a transition to capitalism. Over 30 years after WW2 concluded.
Russia did not industrialize in the 1920s. They did collectivize agriculture, famine ensued. They turned back to free market farming, famine went away. They turned again to collectivization, and farming collapsed again. Eventually, the Soviets allowed farmers to farm small plots and sell what they could raise. These small free market plots kept the country from starving.
Russia did work hard at industrializing during WW2, but it was propped up by the US, who heavily supplied the Soviets. The US actually built factories in the US, dismantled them, and shipped them to the Soviet Union during the war. US engineers and craftsmen taught them.
When WW2 ended, the Soviets looted everything industrial they could find from the Soviet sector. Whole factories were moved east. Soviet industrial output grew during the war.
British industry was also untouched, because the German bomber fleet did not have the range to cover much of Britain, and because Hitler stupidly decided to bomb houses instead of factories. Britain had a pretty anemic recovery from the war - despite getting far more Marshall Plan money than Germany.
Japan did not have a free market before the war, and not much of an industrial economy. Curtis LeMay had a hard time finding industrial targets to bomb, as Japanese industry was characterized as "a drill press in every home". Japan turned to free markets after the war, and we know what happened next. Recall that Japan was burned into ash in WW2. They went from utter defeat to economic superpower, despite not having any natural resources, in just 30 years.
How much more of an "unequal" starting point could there possibly be?
The only common characteristic of prosperity is free markets. And the more free market an economy is, the more prosperous it is. Over and over. It goes back to the middle ages.
The other common characteristic is when countries turn towards socialism, things just get worse and worse for them.
Before opening up in 70s, China had acquired the ability to build by itself: huge numbers of machine guns and grenades, tanks, fighter planes, rockets and satellites (aka missiles), nukes.
These minus nukes and missiles plus battleships is pre-WWII Japan.
This may be helpful if you're curious why so many countries that choose free market instead of Communism after WWII are still not industrialized today.
The difference between the US and smaller countries is that the US government is powerful enough to stop powerful corporations from destroying it by enacting labor laws, environmental protection laws, and anti-monopoly laws with teeth. No other country is advocating for a Soviet style economy. You're fighting a strawman.
Simple, obvious contradiction: can every country enjoy the benefits of issuing the de facto reserve currency for the world? Just by having free markets?
The US has been incredibly privileged. I’d argue that was earned in some ways and lucky in others. But it’s undeniably true.
Free markets are a choice the US made. Any country can choose to have a free market, and some have. The reserve currency thing has nothing to do with it.
And pray tell, how did it become the de facto global trade currency? You believe the massive development of internal markets, free trade and relatively stable legal system that largely respects private property had little or nothing to do with this?
>And why do you think the dollar is dominant in international trade?
The dollar isn't dominant in international trade because the domestic market is free, like the above user was referencing. The dollar has been the dominant reserve currency and currency for international trade since it overtook the pound for both of those functions in the mid 20th century, which didn't coincide with the US having a free market.
Also, I wasn't make any causal relationship in my comment, like you seem to be implying. The fact that USD is the dominant reserve currency and dominant trade currency is unquestionably more unique than having free markets, considering that the US is truly completely unique in both of these regards, while it is not nearly as unique in having a free market.
Once again, regardless of how free the US market was in the mid-20th century, this is not the most unique privilege about the US today, as you put it in your previous comment. Any country could institute the same market regulations and degrees of freedom as the US, but only one country can have the position of having the dominant reserve currency and dominant trade currency.
The little "thing" or status of having reserve currency has allowed the US to enjoy lower international borrowing costs than anywhere else in the world. This has immensely benefited the US, in facilitating ease of borrowing with relatively low interest rates and by facilitating lower exchange rate risk in borrowing than any other nation.
One of the biggest “services” expenses, i think maybe the biggest, comes in the form of employees.
Afaik the EU is regulated much more heavily in that area than the US, like here in Australia.
It makes sense to me that some amount of the US’ economic advantage comes from their ability to more efficiently match employees with the work currently demanded by the market.
I'm aware, and I'm not contesting this, but this is besides the point. What I'm getting at is that Walter seems to think that prosperity has a 1 to 1 correlation to market freedom. If the GDP of the US started diverging farther away from the EU at a greater rate than prior to the GFC, then to his way of thinking, this must have something to do with how the EU limited market freedom following the GFC.
There are barriers to trade besides tarriffs. That's literally the only sensible part of the nonsense justification for the initial values of Liberation Day tarriffs. The E.U., for example, has barriers to trade like food regulations and PDO and such. Protectionism takes forms besides tarriffs. Tarriffs are probably among the least useful, most damaging, most blunt protectionist tools.
They created one kind of prosperity early on by protecting their markets and letting industries develop. Many other countries have done the same thing.
The unique thing was that they then created another, less broadly shared, kind of prosperity by eliminating those protections and offshoring those industries, and focusing instead on dollar diplomacy.
Real life is rarely as simple as discrete causes and effects. The dollar being a reserve currency is the result of both advantaged position America was in at the end of WWII combined with subsequent economic policy. Economic policy alone would not have resulted in the powerhouse America became, and it certainly could have squandered its post-WWII position with bad policy.
The dollar becoming the reserve currency has given America a lot of power, however. It certainly is a factor in the way America is able to run a trade deficit and yet still benefit.
> Economic policy alone would not have resulted in the powerhouse America became
During WW2, the US was the most powerful economy in the world. It fought WW2 in both hemispheres (which required two navies), and supplied all the allies.
Japan was well aware they could never win a sustained war with the US, and hoped that the attack on Pearl Harbor would get them a negotiated settlement. Hitler, in probably the stupidest miscalculation in history, declared war on the US.
You are getting two things confused here. The original question was what privileges the US had that others do not. The USD being the reserve currency is unquestionably a privilege. That it is not the original cause of American prosperity is completely besides the point.
> Any country can become highly successful by enacting free markets.
And the existence proof for that assertion is which country, exactly? Lots of nations lack regulation of some form or another, many of them are "freer" than the US. The US isn't entirely "free" of trade barriers either (c.f. tariffpocalype).
Basically this sounds like a no-true-scotsman in the making. No, it's not that simple.
Worse for who? The US outcomes have been very good for the wealthy, especially the ultra-wealthy, but less good for other people than outcomes in many other wealthy countries.
During the 19th century, the US elevated scores of millions of immigrants from poverty to the middle class and beyond. The newly wealthy "aristocracy" sprang from the poor, much to the disdain of European royalty.
Poverty in the US continued going down until 1968, when it began edging up again. 1968 was the advent of the "Great Society" programs.
> Poverty in the US continued going down until 1968, when it began edging up again. 1968 was the advent of the "Great Society" programs.
Poverty rates are significantly lower in the industrial world outside the US, even (especially!) in the "socialist" countries you seem to liken to LBJ policies. Seems like the same data you're referring to above cuts directly and strongly against this point.
The current wealth disparity, at historic levels, began growing mostly in the 1980s.
> 1968 was the advent of the "Great Society" programs.
1968 was when Nixon was elected.
> During the 19th century, the US elevated scores of millions of immigrants from poverty to the middle class and beyond. The newly wealthy "aristocracy" sprang from the poor
I don't grasp the relevance of these 19th century events to today. How does it address the fact that today, for most of the population, US outcomes are worse than many peer countries?
Who are you quoting with "aristocracy" and did they really come from poor people or from the middle class?
The US was not settled by wealthy people, or even middle class people. The poor people came by the scores of millions. Many came as indentured servants. The Irish came here because of the potato famine. And so on.
If you like, name a wealthy American who came from royalty. I can't think of any.
Fun fact: the Titanic was not built to transport rich people to the US. Quite the contrary, the bulk of it was for poor people immigrating to the US. The first class section was for status and marketing. The money came from the rest of the human cargo.
> If you like, name a wealthy American who came from royalty. I can't think of any.
You can play the opposite game too: name a wealthy American who did not come from a multigenerational-upper-middle-class background (i.e. someone who's parents and grandparents were all well above median income).
Of the big names, the only one I can think of is Bezos (his adoptive father was an engineer, but a first generation immigrant with no established wealth). Everyone else, all of them AFAICT, came from backgrounds where they never had to worry about money or support through the early parts of their careers.
That doesn't matter anymore. The wealthy class might not be called "royalty" (yet?), but they effectively are. The chances today for someone who starts in a poor family to reach middle class, let alone become rich, are very slim. Pretending that the current system in the US is catering to anyone else except the rich is disingenuous.
That said, I agree that the economy of such a society has a better chance of succeeding, but it's at the cost of suffering of lots of people. Actually both extremes are bad - socialism has its problems, but so does the unchecked capitalism.
Besides the many factors (e.g. reserve currency) others have already mentioned, here's another one:
Digital services not being taxed/tariffed when exported whereas physical goods are, is purely a historical artifact. The US has managed to get the whole world addicted to their doomscrolling dopamine algorithms, raking in trillions of dollars. If these were physical goods, this would've been entirely different.
The heroine dealer of the world. So far they've been allowed this position, which is incredibly privileged. And now that the EU sometimes takes a (paltry) step towards slightly taxing the drugs, the dealer screams and kicks, "it's unfair! They're targeting just me!".
America was uniquely positioned due to the dollar being the world's most desired reserve currency. This enabled the USA to spend far beyond what it produced.
Good question, and I think the misunderstanding is Buffett is speaking against, not for, tariffs here. I’m surprised none of the responses have spelled that out clearly yet.
He’s saying tariffs are making 7.5 billion people dislike us even more, and that jeopardizes our unique position in the world.
Buffett actually does share a fear of trade deficits, though. His proposed solution, as an alternative to tariffs, were "import certificates"-essentially a marketable credit required to import goods. These would be earned via exports by exporters, be freely priced and traded, and would essentially bind import levels to export levels.
That sounds awful a lot like we had it back in the Yugoslavia days. It wasn't exactly free market, as you might know. Companies that exported stuff had credits attached to them and with that quota they could then import goods. They couldn't trade those credits. You then had absurd situations like a company that sells agricultural stuff and has stores for those was also selling, for example, commodore 64 in their stores since that's what they imported.
Net capital inflows into the U.S. = U.S. trade deficit.
The balance of payments is simply: Sales of assets – Purchases of assets = Purchases of goods – Sales of goods
If you balance the trade, it means foreigners must stop investing into the US.
If you balance the trade, it means reduced foreign ownership of U.S. assets, yes, which means ownership of U.S. assets by domestic citizens will increase. One of the primary problems with an unbalanced trade deficit is that your own inhabitants are left with less wealth over time, as assets are sold off to fund consumption.
That’s zero-sum thinking. Increases demand for US assets can make americans wealthier in many ways (e.g. providing more capital to american businesses).
You, a single actor, probably wouldn't be a significant factor. However, an international government or corporate entity owning hundreds of thousands of acres and exploiting resources on the land and routing them back to their home country can be problematic. It places additional strain on limited resources and the profits are not spent in the local economy...just sent overseas. Absentee ownership of non-productive real estate can also drive up the costs of housing for citizens, making homeownership more difficult and driving down wealth in the middle class.
1) The foreign entity is investing where Americans aren't.
2) There is a very huge risk for the foreign entity to own such an operation because of political changes. By law or decree the US or the state can always nationalize these lands.
1. Foreign entities are also investing in land that is strategically or tactically important -- agricultural land is a good example of the former; land near military bases an example of the latter. China has demonstrated a willingness to do both.
2. I think this represents a misunderstanding of the U.S. Constitution and U.S. law. The Constitution provides no power for the federal government to acquire land without just compensation, which courts have regularly held to mean fair market value. Put another way: The feds can likely devise a path for buying your land, but can't outright nationalize it. Changing that is not a matter of presidential decree or even a law by Congress; it would require an amendment to the Constitution itself, which is an extraordinarily heavy political and policy lift.
I still see no issue, the government can always buy it out at fair price, whatever it is, and it can just print money or easily issue debt to fund that.
> If you balance the trade, it means reduced foreign ownership of U.S. assets, yes, which means ownership of U.S. assets by domestic citizens will increase.
Proportionately, perhaps, but that doesn't mean by value of assets owned. It just means the aggregate value of assets in the US will be less.
They money coming is invested for opportunities. There will be less opportunities for startups, less VC money. Less affordable loans for corporations to expand and invest.
> I would love more foreign ownership of Italian businesses, that would not only bring capital
Capital investments are like credit card spending, feels good for a while, but ultimately outwards-capital value should always exceed inwards-capital value (that's why somebody makes an investment).
Sometimes everybody is better off (the ideal founder story with VC investment) but all too often the investment money is stolen or misused (but the debt remains for the country to repay).
The 1MDB investments didn't help Malaysia:
US investment bank Goldman Sachs helps 1MDB sell bonds worth $3.5bn... Goldman Sachs helps 1MDB raise a further $3bn in an additional bond sale, this time to cover “new strategic economic initiatives” between Malaysia and Abu Dhabi
On one side it could mean that less money leaves. That is no dividends are paid to outside the country. All profits stay in.
On other hand the economy overall and stock market especially have enormously increased due to outside investments. As injection of money in later one directly pushes valuations up. And the borrowing is only possible when someone loans money...
The extreme opposite of zero foreign ownership would be full foreign ownerhship, ie. colonization. All your resources and wealth belong to a foreign nation.
If we agree that that's a bad thing, then it stands to reason that there's a certain point where foreign ownership becomes a bad thing.
I think China has done an excellent job of bringing in foreign investment while keeping those foreign investors from running amok.
If the foreign entities are not aligned with your country's values, what good is it? For example, Putin is arguably one of the wealthiest individuals in the world. Would you be bothered if he scooped up a controlling share in Italy's defense contractors or machining manufacturers?
>which means ownership of U.S. assets by domestic citizens will increase
Which to be clear will be largely domestic oligarchs and other whales since the vast majority of domestic citizens in the US don't have enough capital to own any significant amount of assets, US or otherwise.
It was a problem to Warren Buffet and he used a parable in the past to explain the issue:
A perpetuation of this transfer will lead to major trouble. To understand why, take a wildly fanciful trip with me to two isolated, side-by-side islands of equal size, Squanderville and Thriftville. Land is the only capital asset on these islands, and their communities are primitive, needing only food and producing only food. Working eight hours a day, in fact, each inhabitant can produce enough food to sustain himself or herself. And for a long time that’s how things go along. On each island everybody works the prescribed eight hours a day, which means that each society is self-sufficient.
Eventually, though, the industrious citizens of Thriftville decide to do some serious saving and investing, and they start to work 16 hours a day. In this mode they continue to live off the food they produce in eight hours of work but begin exporting an equal amount to their one and only trading outlet, Squanderville.
The citizens of Squanderville are ecstatic about this turn of events, since they can now live their lives free from toil but eat as well as ever. Oh, yes, there’s a quid pro quo–but to the Squanders, it seems harmless: All that the Thrifts want in exchange for their food is Squanderbonds (which are denominated, naturally, in Squanderbucks).
Over time Thriftville accumulates an enormous amount of these bonds, which at their core represent claim checks on the future output of Squanderville. A few pundits in Squanderville smell trouble coming. They foresee that for the Squanders both to eat and to pay off–or simply service–the debt they’re piling up will eventually require them to work more than eight hours a day. But the residents of Squanderville are in no mood to listen to such doomsaying.
Meanwhile, the citizens of Thriftville begin to get nervous. Just how good, they ask, are the IOUs of a shiftless island? So the Thrifts change strategy: Though they continue to hold some bonds, they sell most of them to Squanderville residents for Squanderbucks and use the proceeds to buy Squanderville land. And eventually the Thrifts own all of Squanderville.
At that point, the Squanders are forced to deal with an ugly equation: They must now not only return to working eight hours a day in order to eat–they have nothing left to trade–but must also work additional hours to service their debt and pay Thriftville rent on the land so imprudently sold. In effect, Squanderville has been colonized by purchase rather than conquest.
It can be argued, of course, that the present value of the future production that Squanderville must forever ship to Thriftville only equates to the production Thriftville initially gave up and that therefore both have received a fair deal. But since one generation of Squanders gets the free ride and future generations pay in perpetuity for it, there are–in economist talk–some pretty dramatic “intergenerational inequities.”
The failure of this parable is the assuming that money that comes in to Squanderville is spent on consumption.
In reality people in Thriftville invest money in Squanderville and that money grows new sectors other than manufacturing while the share of manufacturing as GDP declines everywhere.
If they're the "investors" then aren't they also the equity owners? Yes they're growing new sectors, but they own the profits of those sectors, not the people in Squanderville, who have no capital left to invest. Hence the "colonization" analogy in the parable.
By this definition "investing in" includes people overspending and getting themselves in a huge hole with debt. Sure, tell yourself that "creditors are investing in them".
Sounds like it would achieve a similar effect, but would be far more complex to implement and yet would still have the effect of being a tax on imports while not actually generating any revenue for the federal government.
> A common response I’ve seen to this is Warren Buffett repeatedly expressing concern about the trade deficit. Buffett’s main concern has always been that we’re sending pieces of paper abroad that give foreigners claims on US assets. And this is true, but I’d argue it’s been a massive net positive on the whole. First, as a percentage of total ownership, foreign ownership of US securities is actually flat since 2008. So despite 20 years of a persistent current account deficit there hasn’t been a huge change in foreign ownership as a percentage of the total. But the current account deficit also reflects the way many firms in the USA outsource their comparative advantage. And that accrues to US firms (and households) as increases in net worth. This is a big reason why corporate profit margins have expanded so much in the last 30 years. Global competition has made US firms more efficient and that’s accrued to Americans as a huge gain in net worth. So this isn’t a situation where we’re just sending Dollars abroad for no good reason. We’re doing it in large part because that is investment in our businesses that has added value to those very firms and their owners. Could that all reverse? For sure. And weirdly, the thing that would cause it to reverse is ultra protectionist measures thereby reducing demand for US Dollar assets and reducing investment in US firms.
Change in general, should always come gradually , that way the inevitable consequences rear their head early. Its the bold paintstrokes that topple the world on its side.
Obamas biofuels come to mind triggering the arab spring by raising bread prices.
> Obamas biofuels come to mind triggering the arab spring by raising bread prices.
Why do you call them "Obama biofuels" when biofuel mandates were passed while Bush was president?
Standards for biofuels appeared in the Energy Policy Act of 2005 [0] (mandating 4 billion gallons of biofuel by 2006, 7.5 billion by 2012) and the Energy Independence and Security Act of 2007 [1], aka the Clean Energy Act of 2007 (mandating 36 billion gallons of biofuel by 2022). Bush signed both laws.
I assume that corn-state representatives were pushing for more biofuels, since farmers want to sell more corn, regardless of how green anything is, or is not. At the time Obama was one of many in congress, both Democrats and Republicans, who voted in favor of these laws.
I would agree with you that biofuel production exacerbated food supply issues leading into the Arab Spring.
I always run across great quotes from Warren Buffett, but I never spent any time actually reading any of his writings or anything written about him. What's the best place to start to absorb some of his wisdom? Anything that's applicable to startups, tech, and life in general, beyond being the CEO of a holding company?
Not to diminish any of his accomplishments, but read his quotes and story as being a product of his time. He famously missed out on a lot of solid tech investments because of his background as a value investor. Value investing doesn't exist the same way it did when Berkshire started making a name for itself. Tech investing also isn't them same as 1997, 2004, or 2010.
My point is that you have to put all of his wisdom and stories in the context of what he's good at and the environment he was in. He tried to apply his value investing playbook to early Google, and it looked like a bad investment. He later realized this (see my link), but that gets talked about less than value investing in its heyday. Aside: for debated reasons, value investing, which used to outperform, has been in a slump for a long time.
It's east to hear his story and think if you do the same thing, you'd be successful. If you did the same thing in 1970, you might be! And some of his wisdom is generally applicable, but reading his story as a guide for investing today isn't the right approach.
He's always been an independent thinker. He stopped the low price to book value thing ages ago and went more for companies with good long term growth such as Apple. And recently he's switched a lot to cash/t-bills. We'll see if that proved a wise move but he's got a good track record of doing smart things rather than always doing the same thing.
It's not that he missed out on it, both Buffett and munger said that they didn't really understand technology so they didn't feel a reason to go there. They felt they better understood insurance and railroads and candies and whatnot and they made Bank doing it.
I agree and I think furthermore no one has really understood technology enough to have consistently made the right moves, because tech stocks fundamentally were blazing a new trail.
Buffett invested in businesses that, relatively speaking, were already well understood, if not widely by everyone, the point being that you could look at the balances and financial statements of an insurance company and derive an investment plan that was based on basically nothing new. Google, and tech in general, were not like that.
I think now some tech stocks do look like that. Microsoft, Oracle, Salesforce, all have business models that are much more well understood at this point than 30 years ago.
Even though Google has been wildly successful, I do see them as riskier since they derive so much of their income from web search ads, which feels like a precarious position compared to selling office productivity suites, databases, and CRMs to enterprises (I know Google does some of this but it's not where they make the bulk of their income).
Yeah, looking at the NASDAQ from 1997 is a good reminder of everyone's selection bias. Saying Buffett missed out on the winners (with 20/20 hindsight) is forgetting that he also missed out on a lot of losers.
Here's some of the now lesser known NASDAQ tech stocks that were doing well in 1997:
You are, and you're doing so naively, because one of the reasons Buffett has been successful is that he stuck to things that were in his circle of competence.
For Buffett I recommend Essays of Warren Buffett. Regarding Munger’s Almanack, I wrote a nice summary just before his death:
”A real estate investment of $24 by the Dutch to buy the island of Manhattan would today be roughly equivalent to $3 trillion. Across 378 years, that’s about a seven percent annual compound rate of return…”
It's a great book (I think), reading it now. It's the only book this far that I've brought with me to the gym (because I wanted to continue reading it, in between the exercises)
I still remember the feeling I got when I first read the first paragraph and especially this phrase:
"For one thing, if (a) you had taken 225 million orangutans distributed roughly as the U.S. population is; if (b) 215 winners were left after 20 days; and if (c) you found that 40 came from a particular zoo in Omaha, you would be pretty sure you were on to something."
Compared to anything in finance I've read up until then, it felt like I just found the right guy.
"The Intelligent Investor", by Benjamin Graham. He was Buffett's mentor, and contributed to that book. It's straight value investing. Never buy a startup.
There are biographies of Buffett. I read one of them years ago. It goes into great detail about the early deals that got him started. I never did quite understand the deal that moved him into the big leagues, the takeover of GEICO insurance.
I downloaded his letters to shareholders to an ebook reader, starting I believe in 1971 or so. Read all of it to the present, about 1500 pages (there's a lot of repetition)
What sticks out the most is what a clear thinker he is.
For his personal background, the history of his companies, and insight into his overall investment philosophy, the Aquired podcast did a three part series on Berkshire Hathaway back in 2021. They also interviewed Charlie Munger just before he passed away. They’re good overviews and enjoyable listens.
Warren Buffett’s decision to step down as Berkshire Hathaway’s CEO is both wise and timely, capping an incredible career that transformed the company and inspired investors worldwide.
Buffett worked, at least informally, with the Obama administration on some financial policy issues. And he is a proponent of greater taxes on the very rich. Here's one short video (2:46) in which he talks about it:
If the US government really wanted to bring back industrial manufacturing, tax policy is one obvious route - eg a 2/3 tax on billionaire and corporate wealth, such as on the huge pile of cash Buffet-Berkshire is sitting on, but then offer a way out - invest that cash in domestic manufacturing and R & D and it won't be taxed.
This could motivate the private sector to go back to the Bell Labs model, too.
They also get that way by inheriting wealth, by buying favorable laws and regulations, by anticompetitive practices (we've seen a few in the IT sector), and by other problematic behavior.
I agree that free markets are great in principle but your comments seem dogmatic - all free markets and only free markets. The conversation would be much more interesting if it was about the nuances.
Then their parents must have been billionaires, generating it with investments. If the inheritors divest from those investments, then they incur enormous income taxes. So it's likely to stay.
> by buying favorable laws and regulations,
Then it's not free market. There is no government system that is immune from buying influence and corruption.
> by anticompetitive practices (we've seen a few in the IT sector), and by other problematic behavior.
Nothing is perfect.
> The conversation would be much more interesting if it was about the nuances.
Perhaps, but nuances do not drive prosperity. It would also be more interesting if you showed me a prosperous socialist economy.
But when they die the basis for the capital gain is the value at the time of death, not the original value, so you basically sidestep capital gains taxation, your children or spouse pay back the loan and get a ton more money than they would otherwise.
I'm not an expert on taxation, but this is something people have been complaining about for a long time.
> Then it's not free market. There is no government system that is immune from buying influence and corruption
The point is that if you're forced to put your money into industries / r&d etc then you don't have enough money to bribe people / political parties / news outlets etc.
that doesnt really work if they have to compete on price with foreign producers that have lower labor costs, looser environmental regulations, deeper supply chains and better process knowledge. might as well eat the tax (waiting for monopolistic opportunities) or light the money on fire
I bet he does. He has money outside berkshire and I'm sure the thought of spending hours every day investing his own money in smaller things, taking more risks etc sounds like fun.
I would assume this means that he is not in great health. Hopefully I'm wrong and he just decided that 85 years or so of hustling for dollars was enough.
Sure, but at his age, heath issues spiral out of control very very very fast. I fully expect that he doesn't have a specific health concern right now and is planning ahead because if he did have a specific health issue, I don't expect that he would be able to plan 7 months ahead.
Had to look this up because I am not rich enough to be on a first-name basis with my close personal billionaire friend Charles Thomas Munger https://en.wikipedia.org/wiki/Charlie_Munger
> Had to look this up because I am not rich enough to be on a first-name basis with my close personal billionaire friend Charles Thomas Munger https://en.wikipedia.org/wiki/Charlie_Munger
It's almost certain that the GP isn't either, and is only parasocially on a first name basis.
Yeah but most people don't go around making out that anything they don't know is some esoteric thing that should be laid out in detail for them personally.
It's kind of a damn shame a man like that was not tapped for any major economic position in the government. I don't know how men like Peter Navarro got so far. In a sense, all the money in the world didn't actually fulfill his true potential, and I say that with the utmost respect.
He was asked by Schwarzenegger for advice on California economic policy. Warren did his research, and astutely suggested they should try to scrap Proposition 13 (IMO it's among California's worst policies, but it's a political third rail). I don't think he was asked for economic policy advice ever again :)
I'm sure he's full of good ideas. I think they were just a bit more ambitious than the last 40 years of politicians were willing to stomach or advocate for.
Warren Buffet has warned about the trade deficit problem since 2003 and has proposed an alternate solution called "import certificates" where exporters could earn them and sell them to the importers who must use them. This would result in an even trade balance. He admitted it's essentially a tariff by another name but a more fair and systematic one. In other words, he aligns with Peter Navarro in the problem but differs in the solution.
Not convinced working for government is the best use of your potential, though considering he owns 5% of all US Treasury Bills, I wouldn't say his impact is any less than being a government employee.
That money has already been committed to charitable use for the most part, or already donated. He is essentially managing billions of dollars on behalf of charitable causes. Seems like a pretty good use of his money management skills.
Besides all that he has advocated for that money to be taxed away from him for decades.
He pretty famously lives below his means in a normal suburban house and drives around in a car that most software engineers could afford (Cadillac sedan).
From a societal perspective, I’m not sure you could ask for much more from any one man.
> I don't know how men like Peter Navarro got so far.
It’s a weird story. IIRC in the run for president before trumps first term he sent Jared Kushner to find out about trade. Kushner browsed Amazon, looking at book covers, and picked Navarro’s book because he liked the title… and the rest is history
I have been hearing about him being overall bearish for quite some time (or at least, more cautious than average). I have no idea what your sources might be. He does pick individual stocks that he expects to do well, of course.
For all I've heard about WB the last few decades, I couldn't tell you a single thing he's done that's impacted my life, the country, or the world. AFAIK he's a guy who makes a ton of money, plays bridge with Bill Gates, gives advice, and has a fund that made money for other people. Am I missing something?
Buffett invested in boring industries like insurance. As unexciting as it is, businesses like that basically are the invisible infrastructure that makes society work smoothly.
Don't misunderstand flashy at the only way to be important.
I think the right way to think about Berkshire Hathaway these days is that it's a highly decentralized, minimum viable civilization. They do everything from freight locomotives, to furniture-making, shoes, petroleum, chocolates and more. Then there's a layer of financialization on top of it all (insurance, re-insurance, loan issuance, market-making etc.).
If the U.S. became a failed state tomorrow, there's a genuine chance that Berkshire businesses would keep on operating and trading with each other, on Berkshire rails. It's like a hive of cockroaches -- businesses which are individually strong, that when woven together are un-killable.
Generally the latter. The very short version is that he focused on cash flow, and liked (re) insurance due to success managing float and risk. From there, he'd buy/invest stable businesses and brands. Insurance wasn't his first go, he started bookie work as a kid.
As for saving, he was the guy with a big pile of money in '08 (and other times). Someone you call when your business is dying or you want to retire; he gets the deal, not you. His Bank of America warrant play was a big one from that time.
I didn't finish snowball, but the first half goes over a lot of it.
I like WB as much as the next guy and while he was wildly successfully at making money, he hasn't really done anything else. His main motivation has always been to make money for himself and his shareholders, so why would we expect anything else?
Some of his biggest investments are in things like candy, soda, beer. Not exactly great for society overall and not really enabling anything other than diabetes.
He was already an massively wealthy in 2008 and just having a huge pile of cash and using it to make more deals is not some great achievement to be celebrated.
Yes he made billions off of his 2011 bofa investment, so good for him and brk but what did this do for anyone else?
If BH didn't exist would it really matter? I don't think so.
Still, he's given dozens of billions in charity, given important counsel to the government during the 80s and 2008 financial crisis.
During 2008 financial crisis he essentially saved Goldman and General Electric both preventing further escape of capital and an even worse situation for the US and potentially world economy.
In any case, he's a capitalist who likes making money for himself and his shareholders, he ain't a medical researcher or your mayor.
Lol, his important counsel was “bail out my portfolio plz.” Saving businesses that deserved to fail using free money printed by the fed isn’t a virtue. He was also a big cheerleader for the frauds at Wells Fargo.
How much of Berkshire actually relied on Buffet toward this announcement? I'm increasingly suspect of 90+ or 80+ adults operating the machinery of massive entities. Lots of examples of this.
You’re probably right, but I suspect he guided the general direction of investments. I suspect they had very clever highly qualified younger people dealing with most the day to day decisions within those boundaries. I wouldn’t discount the contribution of either: both broad vision and narrow focus can add a lot of value.
If he did nothing it would be a lot, he sets the tone.
A young investor who thinks the whole portfolio should be in shitcoins because they are going to moon next week won't get a look in and the culture holds.
Take away the figure head and things can creep in a bad direction.
Conventional wisdom (which I believe) is that long term individual investors do not beat the market. However, from my mostly-uniformed view, Buffett did exactly that. What was his "secret"? Did he build most of his wealth outside the market?
Charlie Munger used to talk about how easy it used to be because there was so much less competition and the competition wasn't that smart. Think by the 70's once they figured out how to accurately price options with the Black-Scholes model things started to ramp up. By that point, Buffett was already a player and had the funds to make moves.
Interesting. I've never heard of that model. So what Munger is implying is that by the 80s even Buffett wasn't beating the market but was leveraging his money for gains. Thanks!
Sorry I didn’t mean Buffett and munger used the option pricing, I mean regular people did. They also got more money by buying up insurance companies and investing the float
Buffett's father, Howard Buffett, was perhaps the most libertarian congressman in U.S. history.
He was also a vehement opponent of foreign military intervention, including military aid:
"Even if it were desirable, America is not strong enough to police the world by military force. If that attempt is made, the blessings of liberty will be replaced by coercion and tyranny at home. Our Christian ideals cannot be exported to other lands by dollars and guns. Persuasion and example are the methods taught by the Carpenter of Nazareth, and if we believe in Christianity we should try to advance our ideals by his methods. We cannot practice might and force abroad and retain freedom at home. We cannot talk world cooperation and practice power politics."
Im predicting the stock market dies with him; or probably more accurately becomes far more chaotic and unstable with far higher profits for those who follow his rules.
Something that's happening in the markets is that nobody owns anything anymore. With the exception of elon and bezos. Most fortune 500s have no owner; they are all on low risk autopilot.
And now after decades of stock buybacks, quantitative easing and other mad financial manipulation, comes again the time for value investors, and he leaves?! :)
They have like half a trillion in cash on the balance sheet. I'm sure they're going to scoop up a bunch of value in the coming years. Whoever takes over has a hell of a war chest to work with.
Pretty clear and funny to me. Not sure how to explain it without just repeating the same thing.
It seems the markets will soon go through a period when Buffet's approach will work best, which makes it an inoportune moment for him to retire. Of course at his age retirement is expected, maybe even inevitable - that's the joke.
> And now after decades of stock buybacks, quantitative easing and other mad financial manipulation, comes again the time for value investors
These are things that have happened in the past. Mad financial manipulations? Like what is "mad"? "Comes again the time." How is it different than any other day?
> Pretty clear and funny to me.
You're making up your own interpretation of nonsense then calling it obvious. Good luck with that.
Just finding it mildly amusing to consider that in the messed up economics we are entering with Trump, there may be a shift to value investing, something I have always associated with Buffett.
All that money and he's still a mortal just like the rest of us. I wonder if mega billionaires like him have done private research on life longevity, cryosleep, mind-upload, etc. It's the only useful thing they can do with that much money that directly benefits them. Anything else (legacy, influence, children, etc.) doesn't benefit them when they're gone.
There are things I don't like about him, and the way he is idolized by people that want to accumulate money. But I will say you can't really throw that "all that money and he's still mortal" thing at him because in reality he lived really below his means. So the money part is interesting, why did he try to get so much if he didn't really need it? I think (without really knowing anything about him), that he wanted money like everyone else to be independent, but at one point it turned into a game to see how much he can win.
Hes literally like, autistic or something. If you've ever watched the documentary on him he has a got a weird way about him. Hes got an obsessive knack for numbers and just got into the finance game where literally your job is to make as much money as possible. Its your fiduciary obligation. The rest os history.
With all the billionaires we've had, the fact that no one is living unnaturally long or in some kind of cryosleep or AI simulation probably means one thing: It's simply not possible, and if it is, all the money in the world won't get you there.
Or maybe "optimizing for the most personal wealth over anything else" and "optimizing for the longest healthy lifespan over anything else" are two different goals, pursued by different people.
As a result, extreme results in one or the other are not usually attained by people who do not have extreme prioritization of just one.
It is totally possible that a rare talented unicorn pursuing (and succeeding at) both goals simultaneously is needed for us to achieve radical life extension.
> the fact that no one is living unnaturally long or in some kind of cryosleep or AI simulation probably means one thing: It's simply not possible
_Yet_.
If you looked at the Wright Brothers aircraft, what real use is there for a vehicle that carries one person, maybe 50lbs of cargo, and moves at 80 mph?
https://archive.ph/zXRmj
He's 94 years old, it's honestly impressive he was still there. Still, end of an era.
> Still, end of an era.
That is an enormous understatement. At 94, Buffet has witnessed history and has represented a vision of betterment, a just society, and sound economic stewardship. These things were not and are not hallucinations.
But for many, it seems, the lessons about co-operation, stable economic growth. the sane application of democratic principles, and the rule of law must be learned again.
It's the end of an era bona fides and respect for truth and accountability as the structural integrity of democratic society.
I will say that his pragmatism seemed to fall apart pretty quickly when the rubber met the road - unless I’m misinformed (which I may be).
Berkshire was a key player in the rail workers strike of 2022 and Warren didn’t seem to want to give an inch to the working man when given the opportunity to do so.
https://en.m.wikipedia.org/wiki/2022_United_States_railroad_...
The idea that companies should just agree to whatever proposal comes in from a union is preposterous.
They were negotiating their way up from zero paid sick days per year.
IIRC they had PTO days which were apportioned pretty generously, but they didn't have sick days broken out separately. This doesn't mean they had less time off in general than the prevailing compensation packages. It was a great talking point for the media. However, TBH having a 'here's a bunch of time off, do what you need to with it' is kinda better than 'here's some time off for you to vacation, but then this other amount is only usable if you're sick, and if you're not sick it's money left on the table.'
Crazy this is still a thing nowadays especially in so-called developed economies.
Nothing crazy about that. It's mostly European countries that have mandatory paid sick leave by law for everyone, as they fought for that right in the post-war times when the economy was booming and the world outside the west less safe from outsourcing, and importing cheap labor less easy, so the perfect storm giving labor most power over employers, something that's not gonna repeat again in the globalized world of today.
It was the temporal global exception, not the rule, as the worldwide norm was working people to death for most of history. Companies would gladly give their workers zero benefits if they could get away with it.
Compensation packages are just that - a package. Complaining about one individual component in isolation is disingenuous.
Unions sent a couple of the big car makers into bankruptcy. They've sent all kinds of companies into bankruptcy - the idea that anything they are suggesting is good by nature is about the same as suggesting communism is good by nature. Sounds pleasant, doesn't work.
> Unions sent a couple of the big car makers into bankruptcy.
It goes both ways, unfortunately. Industry in general couldn't exist without laborers, and it has a long history of brutal abuse and horrific, dangerous working conditions that killed and maimed many.
I think it's a cultural problem. We aren't far removed from a time when the general business model was to coercively work people to death to extract every penny of value from them, and that mindset hasn't completely been lost. Workers are callously discarded, not at the doorstep of bankruptcy, but at the first hint that profits might not grow as fast as they could.
Yup, it goes both ways. It's not a given that what a company is proposing is good or bad, and it's not a given that what a union is proposing is good or bad. And they negotiate and it is what it is.
Businesses that can't stay afloat without underpaying workers have a failing business model. Blaming unions for their eventual demise is foolish.
Communism and Capitalism are actually quite similar in a sense. Neither of them works well in their purest form, both lead to formation of an oligarchy (party elite,billionaires). Most livable countries in the world mix them in form of free market social democracy.
>Businesses that can't stay afloat without underpaying workers have a failing business model.
Yet companies have flourished under that model for decades/centuries. Employers and governments have plenty of levers to make sure workers have no choice but to work while being underpaid.
Sure, but you say that as though the union is only representing underpaid workers. In many cases they represent overpaid workers.
The idea that profits are more important than basic humanity is preposterous.
The unions wanted sick leave, because under the current system, employees were scheduled weeks in advance with zero margin. If the employee was sick, they had to ask for PTO which would get denied because of lack of notice and any margin (other employees to cover the job)
When a company loses money year after year it goes bankrupt. The company disappears. The workers lose their jobs.
It is important for a company to earn a profit. You'll find companies like google and facebook, who are making fat profits.... pay fat salaries to their workers.
They pay fat salaries because the talent they need is in high demand, not because they have fat profits. In any industry where that is not the case, a union is a must.
> You'll find companies like google and facebook, who are making fat profits.... pay fat salaries to their workers.
And here I was, under the impression that both Google and Facebook paid their moderators as little as possible.
> When a company loses money year after year it goes bankrupt. The company disappears. The workers lose their jobs.
If the company operates in such razor thin margins that it can't provide for sick leave for employees, something is terribly wrong.
> It is important for a company to earn a profit. You'll find companies like google and facebook, who are making fat profits.... pay fat salaries to their workers
And you'll find that most companies pay as little as they can get away with. Google and Meta need to compete to get a limited (until recently) amounts of top talent.
A railway couldn't care less about the employees.
It's called competition - it's the reason you get to sit there and type away on an incredible machine at a very low cost and eat food at a very low cost... The vast majority of businesses are operating on thin margins. Get in the real world, not some fantasy land.
Competition is not the reason. The reason is workers choosing to improve things, invent things and make things more efficient. Competition is a way to incentivize people to do that, but it's not the only way.
The evidence for (price) competition improving production efficiency and product fit is overwhelming, examples abound in everyday life, it's hardly worth mentioning.
What are some notable examples "workers choosing to improve things"?
Most innovation is done by workers working for some company, no? Product development, research, etc is usually done by workers for a salary, not because they're competing against someone. Competition is not needed for paying people to improve things.
Competition has a lot of negative effects as well. Competition by definition has losers. Competition leads to resentment and conflict. Competition forces people to do things they might not want to to survive, because the moment someone is willing to do something to get an edge, everyone is forced to.
Workers don't get to do that without some capital allocated. Rowing is one thing, deciding direction is just as important - and you'll find that the people deciding which way to row are largely trying to win.
Deciding direction is also just work. Why does the reward for that kind of work have to be ownership over the work other people do? An architect makes decisions about a building, a doctor makes decisions about treatments, a developer makes decisions about software architecture without needing to own the resulting building, patient or software, and they usually try to do their best.
As long as there is some link between the quality of work you do and the rewards you get, people will in most cases try their best. Allocation of capital is no different, and in my opinion should not be treated differently. Giving capital allocators ownership/percentage of the work others do is too much, and leads to unnecessary centralization of power.
Because everyone involved agrees to it. If you want to be a dictator and decide what others can and cannot agree to, go try. I'm an employee, I agree to do certain things and the company agrees to certain things. No one is forcing either side.
Everyone "agrees" to it because there's no other choice, it's the system we have. Everyone agrees to it the same way people in communist countries agree to do what the state tells them to do. Most people have to agree, or the whole system will collapse.
Even if you could say that people truly choose to give a piece of their paycheck to someone simply for being named the owner, it's not a reason not to consider limiting that right to choose. We limit many things that we consider harmful. This system is producing ever increasing inequality of wealth and power. There are now people so wealthy that they're able to break democracies. This will only get worse and worse.
It's not remotely close to a communist country - folks have many choices as to who to work for and on what terms. Employers have all many choices as to who to hire on what terms. Both sides have to agree. Employees jump around from company to company all the time.
Someone can decide to start a company tomorrow and keep 100% of the outcome (less taxes) if they want to do that instead - it's trivially easy to be 100% owner of a business - a couple hundred bucks online and you can set the legal entity up in minutes. Now, you then have to provide sufficient value to customers so that they make the choice to part with their hard earned dollars - and that's where it all falls down for many. But it has nothing to do with power or lack of it.
I'm typing this on a Macbook Pro, which is made by Apple with their net profit margin of 24.3% for Q4 2024. BNSF, one of the companies which is the topic of this conversation, has an operating ratio of 68% for 2024 (how much of their revenue goes towards operational costs). Their net income was $5 billion. They can afford to have a little extra employees to cover fucking sick leave.
> Get in the real world, not some fantasy land
Get out of a libertrarian's wet dream and look around you, read up a little bit on various companies financials.
>I'm typing this on a Macbook Pro, which is made by Apple with their net profit margin of 24.3% for Q4 2024.
Apple's margins are so high because the margins of their suppliers are so low (used to work for one of them) with some used to have suicide nets at their factories. Apple is an exception worldwide when it comes to HW margins, not the norm.
>They can afford to have a little extra employees to cover fucking sick leave.
Shareholders care more about line going up then about the welfare of the workers.
Apple barely make the product. Look at the margins of all their suppliers. That fat line showing about $200b of cogs is filled with low margin businesses - the vast majority of the world is not some outlier like Apple.
Gotta look more than one layer deep financial statement guy. People who actually read a lot of financial statements have looked at a looooot more than the ones of the names on TV.
The topic of this conversation is BNSF and their ilk, I just threw Apple as a fun "you're even more wrong with your anecdote than with your main statement".
What's your excuse for them abusing their employees? Why can't they afford to provide sick leave for their employees when not only do they have billions of net profit every year, many other railways around the world in the same type of business manage to do that and be profitable.
You edited your comments... could you be more disingenuous?
Where do you get your data on BNSF? The data I have shows you’re off by a factor of near 5.
Their own website: https://www.bnsf.com/about-bnsf/financial-information/
Every quarter you click on, <70% operating ratio, $1.something billion net income.
The vast majority of companies can afford sick days for their workers. It's even good for morale, job satisfaction and performance.
Ones that choose not to treat their workers with basic dignity are badly managed.
That link mentions a dispute between 12 unions and 6 rail companies one of which is amongst the dozens of companies owned by Berkshire, run by Buffett. I see no mention of Buffett personally getting involved?
...more personally involved than owning a large part of the company and directly running it? How much more personally involved can you get? Otherwise corporations would be above accountability. The whole system falls apart if executives and the board (and ideally, shareholders) can't be considered personally responsible.
> and directly running it? How much more personally involved can you get?
Ms. Farmer is the CEO of BNSF Railway[1], she is the one “directly running it”.
Moreover, Berkshire/Buffet is notorious for _not_ micro-managing, for letting its subsidiaires enjoy greater autonomy than they would in an usual conglomerate.
1: https://en.wikipedia.org/wiki/Kathryn_Farmer
Right, but what is the point of letting companies own other companies if this also doesn't imply transitive accountibility? It's hard to imagine we can't find reasons to imprison the board of blackrock, for instance. Such a massive company has disproportionately small social responsibility.
We should extend this logic of accountability. If your kid does something wrong every living parent and grandparent should be held accountable. The world would instantly be better.
Not sarcasm.
I'm not clear how this represents him not being pragmatic, could you say more?
Deteriorating conditions for the working class are the main driver of our push toward authoritarian government. A pragmatist would have been more sympathetic for reasons beyond pure capitalist economics.
Replying to @linotype, below your comment:
> I just don’t buy this argument. By global standards, even the poorest Americans (with obvious exceptions like the homeless) are relatively wealthy. Comparison is the theft of joy.
Define wealth. The cheapest option for many foods in other countries is often not only much cheaper, but also of much higher quality than the cheapest option for the same type of item in the US (bread, rice, etc..) in fact their cheap version could easily be pass for the US premium grocery version.
Bad education system and social media contribute too. Manipulating the masses has never been as easy and cheap as it is now. Russia in particular knows how to do it in scale.
I just don’t buy this argument. By global standards, even the poorest Americans (with obvious exceptions like the homeless) are relatively wealthy. Comparison is the theft of joy.
You say comparison is the theft of joy, and then ask us to compare to an irrelevant metric.
If living standards are falling, grocery prices have increased, rents have gone up, wages have stagnated, what does the price of eggs in China have to do with my assessment of the local conditions.
Over what period of time have prices at grocery stores and rents not increased? Food and clothes are cheap by historical standards as a percentage of income.
https://ers.usda.gov/sites/default/files/_laserfiche/Charts/...
What does the last two years of that graph indicate?
Gah. Maybe that people should stop eating out so much.
That Biden/Harris lost because they let inflation get out of control for a fairly short amount of time?
Well it would be one thing if it were an inevitable natural conclusion. But working people are getting poorer because the owner class is hoarding wealth. It’s simply unjust. It’s the difference between losing your house to a hurricane and having someone burn it down.
Seems kind of silly to pretend it won’t happen though. Especially since we’ve chosen to base social status on wealth.
> Deteriorating conditions for the working class are the main driver of our push toward authoritarian government
I don’t buy this anymore. The evidence is for a simpler hypothesis: 20 to 30% of Americans are stupid. They vote against their own economic interests, which doesn’t make sense if wealth is the problem. My personal hypothesis is lead exposure. But further empowering that segment with wealth strikes me as counterproductive.
Doesn't explain it at all. The biggest swing from 2020 to 2024 was people under 45 voting for Trump at a much higher rate, mostly driven by men. Anyone under 45 was born at least 5 years after lead gas was banned in cars. They're mad because they don’t see a path to the future they were promised. Calling them stupid is patronizing and counterproductive, even if true.
I’m not saying all Trump voters are stupid. Just that there is a stupid subset that are not rationally motivated. It’s productive to call this out, because I think it requires reworking our political system to deal with their threat. Fortunately, MAGA seems eager to set the precedents we’ll need in the future. (It’s also not patronising because I don’t care what they do as much as that they don’t cause problems for other people. That’s defensive more than patronising.)
Are you using rationally motivated synonymously with economically motivated?
There there's a lot more that motivates voters besides economics.
My hypothesis is that it is simply broad spectrum culture war. Mass communication and global human mobility have simply raised the stakes or control over social Commons. The same time due to related factors, there is low agreement on shared social rules, vales, and priorities.
In the sense that good fences make good neighbors, there is no clear fence today.
There is no trust in institutional norms to provide protection, so every battle for power seems existential.
I find it hard to argue with this. Real politik and the rule of the jungle have always been in effect. It is just less dramatic when there is consensus on the rules and limitations.
I propose another hypothesis, those that haven’t learned of the desire for real change instead of stagnant leadership will continue to make the same mistake each election cycle.
Learn to read the signs instead of calling people stupid for not agreeing with you, and then following it up with an attempt to force their alignment.
You are speaking as if there is a single objective agreement between people on what constitutes the most pragmatic answer. There is no such agreement. The foundation of liberalism is that we can not agree on first principles. An authoritarian crackdown is just as much an expression of pragmatism if the actor believes they can win.
> Deteriorating conditions for the working class are the main driver of our push toward authoritarian government.
No, they aren't. It's dubious that even the widening relative gap between the working class and the capitalist class plays a major role, though that at least has the virtue of being a real condition and not a fantasy.
If you have an alternative hypothesis, I’m all ears. The lack of good paying jobs and the knock on effects of expanding wealth disparity seems to be underlying most of the issues driving radicalism, left and right, up and down.
In America, at least, workers think tomorrow will be worse than today and they are resorting to populism to try and reverse the trend.
I don’t think it’s accurate to say that the working class is “resorting to populism to reverse the trend.” If anything, the fact that so many working-class voters support a wealthy oligarchy—one that consistently advances policies benefiting the super-rich at the expense of ordinary people—suggests that a significant portion of the population is being swayed by misinformation and manipulation, not that they’re successfully advocating for their own interests.
Ironically, it’s often the opposite party that actually pushes for policies that would materially benefit the working class. The real fallacy is equating the current wave of so-called “populism” with a genuine effort to improve conditions for workers. In practice, what’s being called “populism” is frequently just another vehicle for entrenched elites to consolidate power, not a movement to empower ordinary people.
> it’s often the opposite party that actually pushes for policies that would materially benefit the working class.
Except on immigration.
Immigrants are a critical part of the working class in America. Always have been.
> Ironically, it’s often the opposite party that actually pushes for policies that would materially benefit the working class.
Such as?
All the Democrat led states have paid leave and higher minimum wages/overtime exempt laws. And higher unemployment benefits. And longer leave times for new moms. It’s also the Dem states that have free school lunches for kids and more robust Medicaid funding.
Democrats passed ACA, which made insurance even possible to purchase if you weren’t offered it by employer, and the annual out of pocket maximum, ban on pre existing conditions as a criteria for calculating premiums, and ACA premium credits made it more attainable than it was before ACA.
Build Back Better bill a couple years ago would have made paid leave policies nationwide and provided more assistance with childcare.
Lets not forget higher taxes!
> Democrats passed ACA, which made insurance even possible to purchase if you weren’t offered it by employer, and the annual out of pocket maximum, ban on pre existing conditions as a criteria for calculating premiums, and ACA premium credits made it more attainable than it was before ACA.
Have you actually ever purchased a plan from the website? The last time I checked, the costs were the same as if I had a plan on my own. Also you could get policies prior to ACA, but were subject to health exams and non-coverage of preexisting conditions. In fact, one could argue that all ACA accomplished of benefit was forcing coverage of preexisting conditions. But let's also not forget the fine, which was applied to people who did not have health insurance under the assumption that it was a choice. In reality, people don't have health insurance if they can't afford it which made the penalty functionally a tax on the poor.
You speak of ACA like everybody will agree with you. A decade later I'm still mad at Obama and want my $4k back.
>In fact, one could argue that all ACA accomplished of benefit was forcing coverage of preexisting conditions.
Aka giving people access to healthcare.
Health insurance is not real insurance, it’s a facade where we pretend premiums are not taxes.
99% of people could never afford the healthcare they get, they would just die. Which is fine, but there is no situation where healthcare + low taxes (wealth redistribution) exists.
So it’s high taxes + healthcare, but with a flattening and top heavy population age histogram, even that doesn’t work.
The worst is when old people only get healthcare (Medicare, which is all there was before ACA). A country is doomed if it’s just sacrificing the future to eke out a few years its oldest.
> All the Democrat led states have paid leave and higher minimum wages/overtime exempt laws. And higher unemployment benefits
They also have significantly higher unemployment rates.
> Build Back Better bill a couple years ago
This bill was named after policy advanced by people who want to turn the general population into a class of permanent renters.
> If you have an alternative hypothesis, I’m all ears.
How about if I let you do that:
> In America, at least, workers think tomorrow will be worse than today and they are resorting to populism to try and reverse the trend.
See, belief about likely future conditions is a very different hypothesis than factually-existing current conditions, and a better one. To the extent that, IMO, its at least part of the actual explanation.
It’s the same hypothesis. Its a line trending down, and there is an awareness that today is less than yesterday and more than tomorrow.
> It’s the same hypothesis.
No, perception and reality are different things.
> Its a line trending down
Perception? Sure. Reality? No, it factually wasn't prior to the events that it is being invoked to explain.
Which is why perception of decline is a much more defensible hypothesis as to the cause than actual decline.
It sounds like you think material conditions haven’t gotten worse? Cost of housing, food and healthcare, plus flat wages seem to disagree. I think in this case people’s perception matches reality.
I’ve noticed you refuse to put forward your own reasons, why is that?
> It's dubious that even the widening relative gap between the working class and the capitalist class plays a major role
This description could apply to the French Revolution, Tsarist Russia, the fall of the Weimar Republic, and the Colombian Civil War. Why do you think it is dubious?
Where did pragmatism enter this thread?
The comment above
Buffet reminded me a lot of Angela Merkel.
They stood clearly and simply for good moral judgment, fair systems and looked at the bigger picture to carry most people forward. They also based all their decision in facts, truth and science. They learn't their trades (economics & politics) over time and weren't afraid to adapt as times changed.
Their slow and steady presence did more for equality and fairness than many others. We will need to find these values again after the current times have played out.
That has to be about a different Angela Merkel, the one I know had one priority: preserving status quo.
She also was for making Germany economically dependent on gas pipelines to Russia, even though she knew that she was funding Russia's war in Ukraine.
I am not inclined to give her a free pass on that.
Which recent German politician in power wasn't about preserving the status quo? The entire country and culture is all about the status quo.
I'm. It sure of the "recent" definition but Schroeder's tenure brought a lot of changes (which one can argue against, but it was not conservative).
> slow and steady presence
> preserving status quo
That sounds like the same thing to me?
I cannot believe that there are people praising Merkel with a straight face. She is literally a laughing stock in Europe, I put her as the poster boy for immigration crisis together with the energy crisis. The only thing she did was shove problems further in the future not caring about the consequences.
I think you have a strange definition of "laughingstock". Germany went from an economic powerhouse of Europe to factory shutdowns and a bunch of bumbling sniveling elites who are afraid of the people they are leading and want to ban them from having a say.
>the bigger picture to carry most people forward
The bigger picture of getting germany dependent on russian gas while screwing eu allies.
> They stood clearly and simply for good moral judgment
Merkel has severely underestimated Putin. She played a role in the continuous betting on Russian oil. Merkel has called the internet “neuland” and wasn’t her government also the one starting with hydrogen subsidies. I donno about you but to this day I only hear lots of talk about hydrogen but near zero results. So all the wrong bets.
Also I don’t know whether you noticed but Germany is expected to be in a recession for three years in a row now.
About equity and fairness okay I guess you are right. Everybody in Germany will be poor if things continue like this.
Buffet was "carrying most people forward" how exactly? Squeezing companies he had shares in to be as efficient as possible, leading to poorer quality and outright dangerous working conditions isn't bettering anyone other than shareholders, which aren't most people.
Silent approval of Putin's invasions to Georgia and Ukraine doesn't look like "good moral judgment, fair systems"
> They also based all their decision in facts, truth and science
What? She shut down nuclear power plants to ramp up coal and Russian dependence.
Idolizing people is rarely helpful.
She shut down nuclear power because of extreme pressure from the population. Tens of thousands protested around her office. Nuclear is complicated (and mostly fear driven) in Germany. Oddly enough the first exit was done under Schröder who is a russian asset. Makes you think.
> Tens of thousands protested around her office
Germany has a population of 84 million people. 10,000 should not be able to dictate a policy decision of this magnitude, regardless of how loud they are.
> Nuclear is complicated (and mostly fear driven)
The politics of nuclear are complicated, the science (more engineering) of nuclear are complicated, the imperative is clear and simple. You are correct that it's mostly fear driven, but stoked by "green" advocacy organizations and/or manipulated by people with a stake in the continued use of fossil fuels (and largely the latter funding the former).
True leadership would stand up to both of these pressures, making people understand that the voice of 10,000 (or even 100,000) people can not dictate policy alone and educating people on the reality of nuclear power, while also fixing some of the real issues with nuclear power (an aging power plant fleet and an inability economically build better replacements).
Merkel totally flopped on energy policy.
The protestors were not a very vocal minority, but representative of the majority opinion. At the time well over 80% of Germans wanted an end to nuclear power. (Although now following the Ukraine invasion and rising energy costs the opposition has significantly softened.)
In a democratic system it is simply difficult to maintain such extremely unpopular positions. Governments which do so don't last long. Merkel flip-flopped and maintained her Chancellorship.
We've been running nuclear here in Canada for over 80 years now. CANDU is very safe and not very complicated. https://en.wikipedia.org/wiki/CANDU_reactor
Did you know about this? https://thewalrus.ca/nuclear-accidents/
Sure, NRX and NRU were research rigs running experiments far outside normal reactor envelopes. And I think it's amusing that it's considered INES-5 when very little actually happened and there was...no..wider...events... literally. If the worst we can cite is a 70 year old research accident that killed no one and ultimately produced design fixes we still use, you have a the strong case for nuclear safety...Anyway: The Walrus needs to find some new civic interest story around Barrie to write about or something, it's an awful rag. We could decarbonize our grid completely with 15 new reactors, if I was PM we'd be popping them up like it was CANDU Christmas.
She finally agreed to shut down nuclear because Fukushima happened just a few days before the state elections of Baden-Württemberg. She was afraid of a rout so she agreed to do the above, and her party lost to the Greens anyway.
> Oddly enough the first exit was done under Schröder who is a russian asset. Makes you think.
Oddly enough? Schröder was in a coalition with the green party that had emerged from the anti-nuclear movement two decades before.
Measured governance. I feel the same, although I'm sure the Europeans and Germans not at all, but they also talked Angela out of nuclear, so one might argue the Germans are a bit too measured compared to their Chancellor.
It is ok, I understand how you are thinking.
But unfortunately I think Merkels legacy will be "Wandel durch handel".
Trying to pacify Russia and Putin through increasing trade. Did not work.
Don't forget the climate-change-decision-accelerating decision to mothball all their nuclear reactors. This was a monumentally poor strategic decision from multiple angles.
It doesn't have to have been totally wrong always, but it's certainly been wrong at least since the invasion of Georgia in 2008.
Yes. But that wasn’t a rational outcome. By any measure Russia is momumentally worse off after basically anything it’s done in the past three years.
"The current times" are a direct result of decisions like that of Merkel to throw open the borders of Germany to a million unchecked foreign men. If there's one reason that the AfD is the largest party in Germany today, it's because of that decision Merkel made a whole decade ago. How was that "based in facts, truth and science", or "slow and steady"?
The million unchecked foreign men (and women) are presumably propping up the German economy as we speak.
There will always be people that dislike change, but it may ultimately be better to start integrating them earlier rather than later. If you make it through the bad times (e.g. now), at the other end is the outcome you desire.
> The million unchecked foreign men (and women) are presumably propping up the German economy as we speak.
The refugee crisis didn't appear to have a significant impact (positive or negative) on the labor market based on a recent study by the IZA and ZEW [0] - "Our estimates suggest that those migrants have not displaced native workers but have themselves struggled to find gainful employment. We find moderate increases in crime, and our analysis further indicates that while at the macro level increased migration was accompanied by increased support for anti-immigrant parties, exposure to asylum seekers at the micro level had a small negative effect." [0]
There are systemic issues with the German economy that aren't related to immigration. A lot of the current malaise can be attributed to the economic slowdowns in Russia (with the Russian Invasion of Ukraine) [1] and China (due to Zero COVID and the subsequent indigenization) [2], due to how tied German industry was with both markets [3].
[0] - https://onlinelibrary.wiley.com/doi/10.1111/ecca.12420
[1] - https://dgap.org/en/research/publications/no-more-illusions-...
[2] - https://ecfr.eu/article/the-end-of-germanys-china-illusion/?...
[3] - https://www.elibrary.imf.org/view/journals/001/2024/130/arti...
>The million unchecked foreign men (and women) are presumably propping up the German economy as we speak.
How many of those unchecked are women? What's the point of having borders then? Or law enforcement putting criminals in jails, when they could be out there propping up the economy. As long as your illegal activities are putting money into the state coffers, you should be allowed to continue unchecked, screw the laws.
Yeah sure, they might cause some trouble for the lower and middle class living amongst them, but think of the economic gains for the top 1%! Their real estate and stock portfolios have never looked so good. And if people vocally disagree with this you call them fascist and put them in jail for threatening your "democracy".
How does Poland's economy manage to grow faster than Germany's without illegal immigration? Maybe they can send some researchers there to find out.
> How does Poland's economy manage to grow faster than Germany's without illegal immigration?
They are having babies.
>They are having babies.
Do you research things before you say them? A quick google search shows Polish fertility rate (1,26) is lower than Germany(1,46).
> a vision of betterment, a just society, and sound economic stewardship
Please point out one case in which he wasn’t firmly on the side of capital over societal advancement. As far as I can tell he is deeply invested in oil and keeps shilling Coca Cola (and that’s probably only the surface).
>It's the end of an era bona fides and respect for truth and accountability as the structural integrity of democratic society.
You're splitting. Psychiatrically binarizing things into two possible states - a psychiatric pathology fueled by online propaganda in this context.
> At 94, Buffet has witnessed history and has represented a vision of betterment, a just society, and sound economic stewardship
How exactly did he "represented a vision of betterment, a just society, and sound economic stewardship"?
> But for many, it seems, the lessons about co-operation, stable economic growth. the sane application of democratic principles, and the rule of law must be learned again.
Who are these "many" that need to be taught about those "democratic principles" and the "rule of law". How are these related to Buffett?
> It's the end of an era bona fides and respect for truth and accountability as the structural integrity of democratic society.
What?
> Who are these "many" that need to be taught about those "democratic principles" and the "rule of law". How are these related to Buffett?
The current status of things in US politics is what I assume is being referred to here. Happy to be corrected.
I wish I could have breakfast with him and just talk about what it all means. I hear he goes to some local diner.
Chocolate chips[1] were invented in 1937, when Buffet was 6yrs old, and commercialized as we know them today in 1941 when Buffet was 10.
He's literally older than chocolate chips!
[1] https://simple.wikipedia.org/wiki/Chocolate_chip
Munger was still going strong at 99, good genes both of them, i guess
I met a lady in her 90s who looks and acts the same age as her daughter, who is in her 60s. She lives independently, talks quickly, walks without a cane, and has a generally youthful appearance and demeanor.
I asked what her secret is to aging so well. "I don't know, just don't have any health issues, I guess", she said.
Maybe if you can make it that long without encountering Alzheimer's, Parkinson's, cancer, heart disease, osteoporosis, arthritis, or various other major issues... then you basically have a decent shot at still being fine and healthy at 94.
Maybe. But I often think about my grandparents. Both lived to be 96. Neither had significant health issues until the day they died.
My grandmother was extremely active throughout her life. She worked out. She was active at church. She volunteered throughout her 70's and 80's. She was always happy to go out to dinner with anyone that wanted.
Most of my memories of my grandfather (her husband) where him sitting on a recliner watching TV. He rarely left the house.
Their quality of life in the last 15 years of their lives was so different. Grandma died on her feet. She had a heart attack in the middle of the night and that was it. The day before she had been out with friends and had dinner with the family. My grandfather just sort of wasted away. He was weak, frail, and kind of miserable.
All I'm saying is there sure seemed to be a lot more than dodging all of those diseases and issues with those two. My grandmother invested in herself. She worked really hard to maintain that quality of life.
She's my role model as I age.
Yeah I wonder how much of Buffet's decision to quit is just that it's less "fun" to be doing this without Munger.
And the best healthcare money can buy anywhere in the world.
Doctors aren't that useful, unfortunately
Yeah, quality years at end of life are not solved problem even for the rich. Being this active must be genetic.
And no amount of good doctors can make you change your lifestyle. At the end of the day, a ton of doctor advise is ways to change your lifestyle, and that takes personal effort.
Buffet, famously, is known for not having great dietary habits. I agree with you, but he’s not a good example here.
I think he's actually a great example: it's much more complicated than good dietary habits!
Buffett has never been a drinker. It's possible that abstaining from alcohol is the most important dietary habit
He's a perfectly fine example. I didn't suggest he had habits he changed.
Strong sense of purpose?
Having friends also contributes to living longer (Buffet and Charlie)
My father is 98. His health has declined gradually but visibly over the last 10 years. He's taking a mouthful of pills each day to keep himself alive. However, he's able to get up, walk, use the bathroom, feed himself etc. He can remember things that happened 5 minutes ago, last week and in his childhood. He keeps up to date with all the family affairs, and watches the news. Also my mother (his wife) is still alive and healthy, and they don't hate each other.
That's more than most people can expect if they even make it to their late 80s.
Frankly I'm astonished at people like Warren Buffet and David Attenborough (a hero of mine).
I read the title and thought, about time, he's probably 80-something.
I really hope I could be productive at 90. Heck, I hope I'm productive at 70.
Heck, I hope I’m productive on Monday!
Generally I'm really glad that HN has resisted the social media brain-rot trends, but sometimes the ability to react to a comment with a heart emoji would be cool.
I think for the upvoter, sending an upvote can trigger that same feel-good, "I agree to this!" dopamine hit as an emoji reaction would.
For the upvoted, seing their magical internet points go up can also feel the same as the notification that they received your heart emoji.
BUT - for the network, having scores be hidden and not displaying a loot of emoji reactions on each post makes a huge difference - it changes the incentives.
You don't get socially rewarded for engagement, because the loot is invisible in the thread (aside from being shown higher on the page). This disincentivizes Reddit-style snark, Twitter-style dunks, etc.
This probably disproportionally tends to attract the kind of people who like discreet positive reinforcement for smart well thought-out comments.
Must be a record: 94 years old and CEO of a publicly traded company.
It's the nominal end of a career spanning 4-5 eras
I’m not sure if it’s originally his but a small talk by him about getting a car made an impression on me and since watching it it’s become a good motivator to stay in shape.
This seems like a good moment to share it.
https://youtu.be/0fMRHpguTPM?si=75lLHzDynMCKhT9H
The interesting thing about this is that Buffett himself has never really had a reputation for taking care of his body in terms of getting exercise or eating well.
At 94, there have probably been a dozen contradictory versions of what "eating well" meant to a large consensus of people. There should be a lot of skepticism for any particular version of "healthy" is when it comes to diet.
"Variety and moderation" is probably good enough advice for most people without specific health conditions.
Yes, but Buffett’s diet has been famously bad and well documented in the media. Cookies and ice cream for breakfast according to one article on LinkedIn by Bill Gates. Daily McDonalds, hamburgers, and a lifelong love of (addiction to?) Coca Cola.
So while the definition of eating well has always changed, I’m not sure it was ever what Buffett reportedly does. And if Buffett’s diet is actually as reported, he is likely an outlier in terms of typical effects of such a diet into old age.
“If I eat 2,700 calories a day, a quarter of that is Coca-Cola. I do it every day.”
https://fortune.com/well/article/warren-buffett-birthday-lon...
https://www.linkedin.com/pulse/warren-buffetts-upside-down-b...
I saw him at the Berkshire meeting about 25 years ago and he did walk very briskly. He probably figured he could exercise that way and get places quicker. He was always good at thinking that sort of stuff out.
That is a very powerful analogy.
Real talk.
Charlie would scorn this "real talk."
Buffet on Tariffs
> “It’s a big mistake, in my view, when you have seven and a half billion people that don’t like you very well, and you got 300 million that are crowing in some way about how well they’ve done - I don’t think it’s right, and I don’t think it’s wise,” Buffett said. “The United States won. I mean, we have become an incredibly important country, starting from nothing 250 years ago. There’s not been anything like it.”
I’m a bit slow in this field. Could someone explain how this quote relates to tariffs? I’ve re-read it three times now, looking for the connection to a tax on imported goods, but I just can’t see it.
I think it’s saying that the US population is crowing about how well we’ve done, and so we should be able to tax whatever imports we want? But what an odd way to say that if so. How well we’ve done seems completely unrelated to tariffs.
Then the quote caps off with some back-patting about how we’ve only been around 250 years, and that our rise is unprecedented. Again seemingly unrelated to tariffs.
Part of the justification for tarriffs is that America is somehow being 'taken advantage' of by the rest of the world and the tarriffs are the rest of the world finally paying their fair share. The reality is that (until now) America has had a uniquely privileged position in the world economy that got America, in general, very beneficial trade deals.
He's commenting on the attitude driving the tariffs.
Uniquely privileged position?
The only unique thing about America is free markets. Any country can become highly successful by enacting free markets. The only thing in the way is their disbelief that they work.
There's a common thread across the world and history. The more free market a country is, the more it prospers.
This is only true if you ignore the important material and historical factors that go into the success of a country. Like for example, the immense wealth of natural resources and variation in climates that the US has. Or how about escaping much of the devastation that Europe faced in WW2 and benefiting immensely from helping them rebuild. Or having (for the most part) incredibly safe and stable relationships with neighbors to the north and south. Free markets have certainly contributed to success, but to say it's the only unique thing about America is just wrong.
The Sovied Union and Communist China all had vast natural resources. But a third world economy.
Japan, S Korea and Hong Kong have next to no natural resources. Great prosperity.
Germany turned to free markets after WW2 and enjoyed the "German Miracle". (Germany has since turned to socialism, with predictable results.) Germany received far, far less Marshall Plan money than Britain and France, who had no miracle.
> but to say it's the only unique thing about America is just wrong
History shows otherwise.
Consider, for a moment, the state that China was in at the conclusion of WW2. It hadn't even industrialized yet. The British and the Japanese absolutely trashed China for over a hundred years!
Russia was also not industrialized until after their revolution in ~1920, and suffered horrific losses in the homeland during WW2.
The US emerged from WW2 fully industrialized and nearly unscathed. The US mainland remained untouched throughout both world wars.
The starting positions were far from equal. You attribute too much to free markets.
> The US mainland remained untouched throughout both world wars.
Minus some balloons from the Japanese I believe?
And the 8 Germans who landed at east Long Island, NY and Jacksonville, FL. https://en.m.wikipedia.org/wiki/Operation_Pastorius
China didn't industrialize until after 1978, when they gave up on communism and began a transition to capitalism. Over 30 years after WW2 concluded.
Russia did not industrialize in the 1920s. They did collectivize agriculture, famine ensued. They turned back to free market farming, famine went away. They turned again to collectivization, and farming collapsed again. Eventually, the Soviets allowed farmers to farm small plots and sell what they could raise. These small free market plots kept the country from starving.
Russia did work hard at industrializing during WW2, but it was propped up by the US, who heavily supplied the Soviets. The US actually built factories in the US, dismantled them, and shipped them to the Soviet Union during the war. US engineers and craftsmen taught them.
When WW2 ended, the Soviets looted everything industrial they could find from the Soviet sector. Whole factories were moved east. Soviet industrial output grew during the war.
British industry was also untouched, because the German bomber fleet did not have the range to cover much of Britain, and because Hitler stupidly decided to bomb houses instead of factories. Britain had a pretty anemic recovery from the war - despite getting far more Marshall Plan money than Germany.
Japan did not have a free market before the war, and not much of an industrial economy. Curtis LeMay had a hard time finding industrial targets to bomb, as Japanese industry was characterized as "a drill press in every home". Japan turned to free markets after the war, and we know what happened next. Recall that Japan was burned into ash in WW2. They went from utter defeat to economic superpower, despite not having any natural resources, in just 30 years.
How much more of an "unequal" starting point could there possibly be?
The only common characteristic of prosperity is free markets. And the more free market an economy is, the more prosperous it is. Over and over. It goes back to the middle ages.
The other common characteristic is when countries turn towards socialism, things just get worse and worse for them.
Before opening up in 70s, China had acquired the ability to build by itself: huge numbers of machine guns and grenades, tanks, fighter planes, rockets and satellites (aka missiles), nukes.
These minus nukes and missiles plus battleships is pre-WWII Japan.
This may be helpful if you're curious why so many countries that choose free market instead of Communism after WWII are still not industrialized today.
The difference between the US and smaller countries is that the US government is powerful enough to stop powerful corporations from destroying it by enacting labor laws, environmental protection laws, and anti-monopoly laws with teeth. No other country is advocating for a Soviet style economy. You're fighting a strawman.
This is painfully naive.
Simple, obvious contradiction: can every country enjoy the benefits of issuing the de facto reserve currency for the world? Just by having free markets?
The US has been incredibly privileged. I’d argue that was earned in some ways and lucky in others. But it’s undeniably true.
> The US has been incredibly privileged.
Free markets are a choice the US made. Any country can choose to have a free market, and some have. The reserve currency thing has nothing to do with it.
Your position that the country controlling the de facto global reserve currency isn't in a privileged economic position is very hard to understand.
What would you say is the economic impact on a country of controlling a global reserve currency?
And pray tell, how did it become the de facto global trade currency? You believe the massive development of internal markets, free trade and relatively stable legal system that largely respects private property had little or nothing to do with this?
>The only unique thing about America is free markets
This is less unique than the dollar being the dominant reserve currency and dominant currency for settling international trade.
And why do you think the dollar is dominant in international trade?
You appear to be putting the cart before the horse.
>And why do you think the dollar is dominant in international trade?
The dollar isn't dominant in international trade because the domestic market is free, like the above user was referencing. The dollar has been the dominant reserve currency and currency for international trade since it overtook the pound for both of those functions in the mid 20th century, which didn't coincide with the US having a free market.
Also, I wasn't make any causal relationship in my comment, like you seem to be implying. The fact that USD is the dominant reserve currency and dominant trade currency is unquestionably more unique than having free markets, considering that the US is truly completely unique in both of these regards, while it is not nearly as unique in having a free market.
The US was the most prosperous country in the world in the mid 20th century. It was also the free'est market in the world at the time.
Once again, regardless of how free the US market was in the mid-20th century, this is not the most unique privilege about the US today, as you put it in your previous comment. Any country could institute the same market regulations and degrees of freedom as the US, but only one country can have the position of having the dominant reserve currency and dominant trade currency.
As countries that have turned to free markets have shown, they enjoy great prosperity from it. The reserve currency thing is irrelevant.
>The reserve currency thing is irrelevant.
The little "thing" or status of having reserve currency has allowed the US to enjoy lower international borrowing costs than anywhere else in the world. This has immensely benefited the US, in facilitating ease of borrowing with relatively low interest rates and by facilitating lower exchange rate risk in borrowing than any other nation.
Because of the bretton woods accords.
And those were not based on free market choices, as the UK would have been just as much free, but it was a devastated economy in a small country.
> The only unique thing about America is free markets
Is that unique to America? I'm in EU, I thought we had free markets too.
> The more free market a country is, the more it prospers.
Some countries, including the US, reached prosperity by protecting their markets.
One of the biggest “services” expenses, i think maybe the biggest, comes in the form of employees.
Afaik the EU is regulated much more heavily in that area than the US, like here in Australia.
It makes sense to me that some amount of the US’ economic advantage comes from their ability to more efficiently match employees with the work currently demanded by the market.
> I'm in EU, I thought we had free markets too
Significantly less free than in the US, and correspondingly less prosperity.
> Some countries, including the US, reached prosperity by protecting their markets.
Not true. If it was true, N Korea would be massively prosperous.
>Significantly less free than in the US, and correspondingly less prosperity.
Which measures of freedom became restricted in the EU following the GFC that led to the prosperity of the EU diverging from the US?
US per capita gdp has been higher than Europe since 1960, and the gap has steadily widened: https://m.statisticstimes.com/economy/united-states-vs-eu-ec...
I'm aware, and I'm not contesting this, but this is besides the point. What I'm getting at is that Walter seems to think that prosperity has a 1 to 1 correlation to market freedom. If the GDP of the US started diverging farther away from the EU at a greater rate than prior to the GFC, then to his way of thinking, this must have something to do with how the EU limited market freedom following the GFC.
One problem is you cannot fire people in the EU. This makes for companies being very slow to hire, and inefficient allocation of workers to jobs.
Free markets are chaotic, and are constantly reallocating resources from less efficient uses to more efficient uses.
Regulations that impede that make for lower prosperity.
But those laws have only got closer to the US ones since the 2008 crisis, and yet measures of productivity have diverged negatively in the EU.
How does your theory account for this?
There are many differences in the EU vs US that may account for differences of wealth. Singling out how easy it is to fire workers seems ideological.
> Some countries, including the US, reached prosperity by protecting their markets.
Protecting markets is done with tariffs. Are you sure you want to assert that tariffs are good for the economy?
There are barriers to trade besides tarriffs. That's literally the only sensible part of the nonsense justification for the initial values of Liberation Day tarriffs. The E.U., for example, has barriers to trade like food regulations and PDO and such. Protectionism takes forms besides tarriffs. Tarriffs are probably among the least useful, most damaging, most blunt protectionist tools.
They created one kind of prosperity early on by protecting their markets and letting industries develop. Many other countries have done the same thing.
The unique thing was that they then created another, less broadly shared, kind of prosperity by eliminating those protections and offshoring those industries, and focusing instead on dollar diplomacy.
I would say that the dollar being the global reserve currency is a unique privilege, yes.
It's a result of American prosperity, not the cause.
Real life is rarely as simple as discrete causes and effects. The dollar being a reserve currency is the result of both advantaged position America was in at the end of WWII combined with subsequent economic policy. Economic policy alone would not have resulted in the powerhouse America became, and it certainly could have squandered its post-WWII position with bad policy.
The dollar becoming the reserve currency has given America a lot of power, however. It certainly is a factor in the way America is able to run a trade deficit and yet still benefit.
> Economic policy alone would not have resulted in the powerhouse America became
During WW2, the US was the most powerful economy in the world. It fought WW2 in both hemispheres (which required two navies), and supplied all the allies.
Japan was well aware they could never win a sustained war with the US, and hoped that the attack on Pearl Harbor would get them a negotiated settlement. Hitler, in probably the stupidest miscalculation in history, declared war on the US.
You are getting two things confused here. The original question was what privileges the US had that others do not. The USD being the reserve currency is unquestionably a privilege. That it is not the original cause of American prosperity is completely besides the point.
Oh, it's exactly the point.
Yes, it does happen to be a point, but it's completely besides the point of the subject in question existing as a privilege in the current day.
> Any country can become highly successful by enacting free markets.
And the existence proof for that assertion is which country, exactly? Lots of nations lack regulation of some form or another, many of them are "freer" than the US. The US isn't entirely "free" of trade barriers either (c.f. tariffpocalype).
Basically this sounds like a no-true-scotsman in the making. No, it's not that simple.
The US is not a perfect free market. But it is closer than other countries.
Socialism, on the other hand, makes things worse the closer one gets to "true" socialism.
Worse for who? The US outcomes have been very good for the wealthy, especially the ultra-wealthy, but less good for other people than outcomes in many other wealthy countries.
During the 19th century, the US elevated scores of millions of immigrants from poverty to the middle class and beyond. The newly wealthy "aristocracy" sprang from the poor, much to the disdain of European royalty.
Poverty in the US continued going down until 1968, when it began edging up again. 1968 was the advent of the "Great Society" programs.
> Poverty in the US continued going down until 1968, when it began edging up again. 1968 was the advent of the "Great Society" programs.
Poverty rates are significantly lower in the industrial world outside the US, even (especially!) in the "socialist" countries you seem to liken to LBJ policies. Seems like the same data you're referring to above cuts directly and strongly against this point.
The current wealth disparity, at historic levels, began growing mostly in the 1980s.
> 1968 was the advent of the "Great Society" programs.
1968 was when Nixon was elected.
> During the 19th century, the US elevated scores of millions of immigrants from poverty to the middle class and beyond. The newly wealthy "aristocracy" sprang from the poor
I don't grasp the relevance of these 19th century events to today. How does it address the fact that today, for most of the population, US outcomes are worse than many peer countries?
Who are you quoting with "aristocracy" and did they really come from poor people or from the middle class?
The US was not settled by wealthy people, or even middle class people. The poor people came by the scores of millions. Many came as indentured servants. The Irish came here because of the potato famine. And so on.
If you like, name a wealthy American who came from royalty. I can't think of any.
Fun fact: the Titanic was not built to transport rich people to the US. Quite the contrary, the bulk of it was for poor people immigrating to the US. The first class section was for status and marketing. The money came from the rest of the human cargo.
> If you like, name a wealthy American who came from royalty. I can't think of any.
You can play the opposite game too: name a wealthy American who did not come from a multigenerational-upper-middle-class background (i.e. someone who's parents and grandparents were all well above median income).
Of the big names, the only one I can think of is Bezos (his adoptive father was an engineer, but a first generation immigrant with no established wealth). Everyone else, all of them AFAICT, came from backgrounds where they never had to worry about money or support through the early parts of their careers.
That doesn't matter anymore. The wealthy class might not be called "royalty" (yet?), but they effectively are. The chances today for someone who starts in a poor family to reach middle class, let alone become rich, are very slim. Pretending that the current system in the US is catering to anyone else except the rich is disingenuous.
That said, I agree that the economy of such a society has a better chance of succeeding, but it's at the cost of suffering of lots of people. Actually both extremes are bad - socialism has its problems, but so does the unchecked capitalism.
Somalia has the US beat.
Besides the many factors (e.g. reserve currency) others have already mentioned, here's another one:
Digital services not being taxed/tariffed when exported whereas physical goods are, is purely a historical artifact. The US has managed to get the whole world addicted to their doomscrolling dopamine algorithms, raking in trillions of dollars. If these were physical goods, this would've been entirely different.
The heroine dealer of the world. So far they've been allowed this position, which is incredibly privileged. And now that the EU sometimes takes a (paltry) step towards slightly taxing the drugs, the dealer screams and kicks, "it's unfair! They're targeting just me!".
https://en.m.wikipedia.org/wiki/Exorbitant_privilege
Not sure is this is what OP meant, but it's a huge advantage that the current administration seems bent on getting rid of
Free markets are the end state, not what is required to become successful. We can see this in countries that have prospered over the last century.
Japan and South Korea both had huge land reforms effectively killing the landlord class and redistributing farms to families.
They then forced businesses to export while maintaining high tariffs and once that was all in place they relaxed the tarifs and opened up the markets.
Countries that took the free market approach include Indonesia and Cambodia.
America was uniquely positioned due to the dollar being the world's most desired reserve currency. This enabled the USA to spend far beyond what it produced.
> There's a common thread across the world and history. The more free market a country is, the more it prospers.
As long as the trend of capitalist market+power consolidation is considered to be 'less free market', I think I'd agree with you.
- Sincerely, an otherwise raging leftie
Just for fun, name the largest 10 US corporations in 1920, and how they came to consolidate power today.
Good question, and I think the misunderstanding is Buffett is speaking against, not for, tariffs here. I’m surprised none of the responses have spelled that out clearly yet.
He’s saying tariffs are making 7.5 billion people dislike us even more, and that jeopardizes our unique position in the world.
He's saying starting a trade war with china is really dumb - you don't want 7.5 people mad at you.
China doesn’t (yet) have 7.5 [billion] people.
That number in his quote is referring to the entire rest of the world.
Because we're letting one clown running a circus toss it all on a bonfire because 10% of the population lost manufacturing jobs.
Buffett actually does share a fear of trade deficits, though. His proposed solution, as an alternative to tariffs, were "import certificates"-essentially a marketable credit required to import goods. These would be earned via exports by exporters, be freely priced and traded, and would essentially bind import levels to export levels.
That sounds awful a lot like we had it back in the Yugoslavia days. It wasn't exactly free market, as you might know. Companies that exported stuff had credits attached to them and with that quota they could then import goods. They couldn't trade those credits. You then had absurd situations like a company that sells agricultural stuff and has stores for those was also selling, for example, commodore 64 in their stores since that's what they imported.
It's really a non-problem.
Net capital inflows into the U.S. = U.S. trade deficit. The balance of payments is simply: Sales of assets – Purchases of assets = Purchases of goods – Sales of goods
If you balance the trade, it means foreigners must stop investing into the US.
If you balance the trade, it means reduced foreign ownership of U.S. assets, yes, which means ownership of U.S. assets by domestic citizens will increase. One of the primary problems with an unbalanced trade deficit is that your own inhabitants are left with less wealth over time, as assets are sold off to fund consumption.
That’s zero-sum thinking. Increases demand for US assets can make americans wealthier in many ways (e.g. providing more capital to american businesses).
Some goods are zero sum. Land is zero sum. Ownership of land by non local entities is… idk seems bad
The solution to that is land value taxation, not foreign trade policies that have zero bearing on land ownership.
Why?
What's the issue, if me, an Italian, own land in Indiana or North Cali?
You, a single actor, probably wouldn't be a significant factor. However, an international government or corporate entity owning hundreds of thousands of acres and exploiting resources on the land and routing them back to their home country can be problematic. It places additional strain on limited resources and the profits are not spent in the local economy...just sent overseas. Absentee ownership of non-productive real estate can also drive up the costs of housing for citizens, making homeownership more difficult and driving down wealth in the middle class.
I see it completely opposite of you.
1) The foreign entity is investing where Americans aren't.
2) There is a very huge risk for the foreign entity to own such an operation because of political changes. By law or decree the US or the state can always nationalize these lands.
Thus, ultimately, I see no issue there.
1. Foreign entities are also investing in land that is strategically or tactically important -- agricultural land is a good example of the former; land near military bases an example of the latter. China has demonstrated a willingness to do both.
2. I think this represents a misunderstanding of the U.S. Constitution and U.S. law. The Constitution provides no power for the federal government to acquire land without just compensation, which courts have regularly held to mean fair market value. Put another way: The feds can likely devise a path for buying your land, but can't outright nationalize it. Changing that is not a matter of presidential decree or even a law by Congress; it would require an amendment to the Constitution itself, which is an extraordinarily heavy political and policy lift.
I still see no issue, the government can always buy it out at fair price, whatever it is, and it can just print money or easily issue debt to fund that.
> If you balance the trade, it means reduced foreign ownership of U.S. assets, yes, which means ownership of U.S. assets by domestic citizens will increase.
Proportionately, perhaps, but that doesn't mean by value of assets owned. It just means the aggregate value of assets in the US will be less.
>U.S. assets by domestic citizens will increase.
You think zero sum like accountant or land owner.
They money coming is invested for opportunities. There will be less opportunities for startups, less VC money. Less affordable loans for corporations to expand and invest.
Why would it even be desirable to have less foreign ownership of US assets?
Like what is the sound logic here?
As an Italian I would love more foreign ownership of Italian businesses, that would not only bring capital but more scrutiny.
> I would love more foreign ownership of Italian businesses, that would not only bring capital
Capital investments are like credit card spending, feels good for a while, but ultimately outwards-capital value should always exceed inwards-capital value (that's why somebody makes an investment).
Sometimes everybody is better off (the ideal founder story with VC investment) but all too often the investment money is stolen or misused (but the debt remains for the country to repay).
The 1MDB investments didn't help Malaysia:
https://www.aljazeera.com/news/2020/7/28/timeline-how-malays...On one side it could mean that less money leaves. That is no dividends are paid to outside the country. All profits stay in.
On other hand the economy overall and stock market especially have enormously increased due to outside investments. As injection of money in later one directly pushes valuations up. And the borrowing is only possible when someone loans money...
The extreme opposite of zero foreign ownership would be full foreign ownerhship, ie. colonization. All your resources and wealth belong to a foreign nation.
If we agree that that's a bad thing, then it stands to reason that there's a certain point where foreign ownership becomes a bad thing.
I think China has done an excellent job of bringing in foreign investment while keeping those foreign investors from running amok.
If the foreign entities are not aligned with your country's values, what good is it? For example, Putin is arguably one of the wealthiest individuals in the world. Would you be bothered if he scooped up a controlling share in Italy's defense contractors or machining manufacturers?
>which means ownership of U.S. assets by domestic citizens will increase
Which to be clear will be largely domestic oligarchs and other whales since the vast majority of domestic citizens in the US don't have enough capital to own any significant amount of assets, US or otherwise.
It applies across the spectrum, but to your point, at least domestic billionaires pay domestic taxes and spend money domestically.
Speaking to the middle class, home ownership (traditionally one of the most reliable sources of wealth for the middle class) would increase.
Yeah that's a fair point as well.
It was a problem to Warren Buffet and he used a parable in the past to explain the issue:
A perpetuation of this transfer will lead to major trouble. To understand why, take a wildly fanciful trip with me to two isolated, side-by-side islands of equal size, Squanderville and Thriftville. Land is the only capital asset on these islands, and their communities are primitive, needing only food and producing only food. Working eight hours a day, in fact, each inhabitant can produce enough food to sustain himself or herself. And for a long time that’s how things go along. On each island everybody works the prescribed eight hours a day, which means that each society is self-sufficient.
Eventually, though, the industrious citizens of Thriftville decide to do some serious saving and investing, and they start to work 16 hours a day. In this mode they continue to live off the food they produce in eight hours of work but begin exporting an equal amount to their one and only trading outlet, Squanderville.
The citizens of Squanderville are ecstatic about this turn of events, since they can now live their lives free from toil but eat as well as ever. Oh, yes, there’s a quid pro quo–but to the Squanders, it seems harmless: All that the Thrifts want in exchange for their food is Squanderbonds (which are denominated, naturally, in Squanderbucks).
Over time Thriftville accumulates an enormous amount of these bonds, which at their core represent claim checks on the future output of Squanderville. A few pundits in Squanderville smell trouble coming. They foresee that for the Squanders both to eat and to pay off–or simply service–the debt they’re piling up will eventually require them to work more than eight hours a day. But the residents of Squanderville are in no mood to listen to such doomsaying. Meanwhile, the citizens of Thriftville begin to get nervous. Just how good, they ask, are the IOUs of a shiftless island? So the Thrifts change strategy: Though they continue to hold some bonds, they sell most of them to Squanderville residents for Squanderbucks and use the proceeds to buy Squanderville land. And eventually the Thrifts own all of Squanderville.
At that point, the Squanders are forced to deal with an ugly equation: They must now not only return to working eight hours a day in order to eat–they have nothing left to trade–but must also work additional hours to service their debt and pay Thriftville rent on the land so imprudently sold. In effect, Squanderville has been colonized by purchase rather than conquest. It can be argued, of course, that the present value of the future production that Squanderville must forever ship to Thriftville only equates to the production Thriftville initially gave up and that therefore both have received a fair deal. But since one generation of Squanders gets the free ride and future generations pay in perpetuity for it, there are–in economist talk–some pretty dramatic “intergenerational inequities.”
Source: https://www.berkshirehathaway.com/letters/growing.pdf
The failure of this parable is the assuming that money that comes in to Squanderville is spent on consumption.
In reality people in Thriftville invest money in Squanderville and that money grows new sectors other than manufacturing while the share of manufacturing as GDP declines everywhere.
If they're the "investors" then aren't they also the equity owners? Yes they're growing new sectors, but they own the profits of those sectors, not the people in Squanderville, who have no capital left to invest. Hence the "colonization" analogy in the parable.
By this definition "investing in" includes people overspending and getting themselves in a huge hole with debt. Sure, tell yourself that "creditors are investing in them".
With respect, I’m not sure I’ll take an internet commenter’s Econ 101 dismissal over the word of the greatest investor of all time.
Sounds like it would achieve a similar effect, but would be far more complex to implement and yet would still have the effect of being a tax on imports while not actually generating any revenue for the federal government.
Also buffet on tariffs (2003)
https://www.berkshirehathaway.com/letters/growing.pdf
Though he makes the distinction between "import certificates" and Trump's version of tariffs.
Contra:
> A common response I’ve seen to this is Warren Buffett repeatedly expressing concern about the trade deficit. Buffett’s main concern has always been that we’re sending pieces of paper abroad that give foreigners claims on US assets. And this is true, but I’d argue it’s been a massive net positive on the whole. First, as a percentage of total ownership, foreign ownership of US securities is actually flat since 2008. So despite 20 years of a persistent current account deficit there hasn’t been a huge change in foreign ownership as a percentage of the total. But the current account deficit also reflects the way many firms in the USA outsource their comparative advantage. And that accrues to US firms (and households) as increases in net worth. This is a big reason why corporate profit margins have expanded so much in the last 30 years. Global competition has made US firms more efficient and that’s accrued to Americans as a huge gain in net worth. So this isn’t a situation where we’re just sending Dollars abroad for no good reason. We’re doing it in large part because that is investment in our businesses that has added value to those very firms and their owners. Could that all reverse? For sure. And weirdly, the thing that would cause it to reverse is ultra protectionist measures thereby reducing demand for US Dollar assets and reducing investment in US firms.
* https://disciplinefunds.com/2025/04/24/three-things-you-gues...
> foreign ownership of US securities is actually flat
Totally incorrect according to this graph: https://taxpolicycenter.org/sites/default/files/figure1_25.p...
From article: https://taxpolicycenter.org/taxvox/who-owns-us-stock-foreign...
Can you cite a source for what you've written?
Change in general, should always come gradually , that way the inevitable consequences rear their head early. Its the bold paintstrokes that topple the world on its side. Obamas biofuels come to mind triggering the arab spring by raising bread prices.
> Obamas biofuels come to mind triggering the arab spring by raising bread prices.
Why do you call them "Obama biofuels" when biofuel mandates were passed while Bush was president?
Standards for biofuels appeared in the Energy Policy Act of 2005 [0] (mandating 4 billion gallons of biofuel by 2006, 7.5 billion by 2012) and the Energy Independence and Security Act of 2007 [1], aka the Clean Energy Act of 2007 (mandating 36 billion gallons of biofuel by 2022). Bush signed both laws.
I assume that corn-state representatives were pushing for more biofuels, since farmers want to sell more corn, regardless of how green anything is, or is not. At the time Obama was one of many in congress, both Democrats and Republicans, who voted in favor of these laws.
I would agree with you that biofuel production exacerbated food supply issues leading into the Arab Spring.
[0] https://en.wikipedia.org/wiki/Energy_Policy_Act_of_2005
[1] https://en.wikipedia.org/wiki/Energy_Independence_and_Securi...
I always run across great quotes from Warren Buffett, but I never spent any time actually reading any of his writings or anything written about him. What's the best place to start to absorb some of his wisdom? Anything that's applicable to startups, tech, and life in general, beyond being the CEO of a holding company?
Not to diminish any of his accomplishments, but read his quotes and story as being a product of his time. He famously missed out on a lot of solid tech investments because of his background as a value investor. Value investing doesn't exist the same way it did when Berkshire started making a name for itself. Tech investing also isn't them same as 1997, 2004, or 2010.
Berkshire has outperformed Nasdaq and SP500 from the IPO (May 9, 1996), 10y, 5y, 1y time periods and he has now $340B in cash.
All this with low risk holding lots of cash. He has not missed anything.
His only miss was actually buying Berkshire. He estimates that he lost out on well over $200B had he never bought Berkshire.
Just because it beat indexes doesn't mean it couldn't have done better.
From 2017:
https://www.cnbc.com/2017/05/06/warren-buffett-admits-he-mad...
Someone probably said something similar in the 1960s when Buffet avoided crowded Go-Go era investments in the 1960s to his benefit.
"Not to diminish the accomplishments of Magnus Carlsen , but he has lost many games."
"Not to diminish the accomplishments of the world's best poker player, but he did lose many hands."
My point is that you have to put all of his wisdom and stories in the context of what he's good at and the environment he was in. He tried to apply his value investing playbook to early Google, and it looked like a bad investment. He later realized this (see my link), but that gets talked about less than value investing in its heyday. Aside: for debated reasons, value investing, which used to outperform, has been in a slump for a long time.
It's east to hear his story and think if you do the same thing, you'd be successful. If you did the same thing in 1970, you might be! And some of his wisdom is generally applicable, but reading his story as a guide for investing today isn't the right approach.
He's always been an independent thinker. He stopped the low price to book value thing ages ago and went more for companies with good long term growth such as Apple. And recently he's switched a lot to cash/t-bills. We'll see if that proved a wise move but he's got a good track record of doing smart things rather than always doing the same thing.
Think of the time horizon.
The current tech investing boom is just a blip just like previous tech booms (Auto industry boom, aircraft boom, personal computer boom).
It's not that he missed out on it, both Buffett and munger said that they didn't really understand technology so they didn't feel a reason to go there. They felt they better understood insurance and railroads and candies and whatnot and they made Bank doing it.
I agree and I think furthermore no one has really understood technology enough to have consistently made the right moves, because tech stocks fundamentally were blazing a new trail.
Buffett invested in businesses that, relatively speaking, were already well understood, if not widely by everyone, the point being that you could look at the balances and financial statements of an insurance company and derive an investment plan that was based on basically nothing new. Google, and tech in general, were not like that.
I think now some tech stocks do look like that. Microsoft, Oracle, Salesforce, all have business models that are much more well understood at this point than 30 years ago.
Even though Google has been wildly successful, I do see them as riskier since they derive so much of their income from web search ads, which feels like a precarious position compared to selling office productivity suites, databases, and CRMs to enterprises (I know Google does some of this but it's not where they make the bulk of their income).
> 1997
Yeah, looking at the NASDAQ from 1997 is a good reminder of everyone's selection bias. Saying Buffett missed out on the winners (with 20/20 hindsight) is forgetting that he also missed out on a lot of losers.
Here's some of the now lesser known NASDAQ tech stocks that were doing well in 1997:
From: https://www.cnet.com/tech/tech-industry/tech-stocks-and-nasd...And nobody ever went wrong by buying IBM
This is extremely superficial.
You are, and you're doing so naively, because one of the reasons Buffett has been successful is that he stuck to things that were in his circle of competence.
Not by Buffett, but you'll love Poor Charlie's Alamanack, by Charlie Munger, his lifelong business partner.
https://www.stripe.press/poor-charlies-almanack/cover
For Buffett I recommend Essays of Warren Buffett. Regarding Munger’s Almanack, I wrote a nice summary just before his death:
”A real estate investment of $24 by the Dutch to buy the island of Manhattan would today be roughly equivalent to $3 trillion. Across 378 years, that’s about a seven percent annual compound rate of return…”
https://www.lostbookofsales.com/notes/poor-charlies-almanack...
Buffet said of Munger:
> “In terms of managing money, there wasn’t anybody better in the world to talk to for many, many decades than Charlie.”
Buffet gets all the press, but he acknowledges Munger as a huge part, if you listen.
Munger really gave Buffet wings. They did it together.
It's a great book (I think), reading it now. It's the only book this far that I've brought with me to the gym (because I wanted to continue reading it, in between the exercises)
Start here - The Superinvestors of Graham-and-Doddsville
https://business.columbia.edu/cgi-finance/chazen-global-insi...
I still remember the feeling I got when I first read the first paragraph and especially this phrase:
"For one thing, if (a) you had taken 225 million orangutans distributed roughly as the U.S. population is; if (b) 215 winners were left after 20 days; and if (c) you found that 40 came from a particular zoo in Omaha, you would be pretty sure you were on to something."
Compared to anything in finance I've read up until then, it felt like I just found the right guy.
"The Intelligent Investor", by Benjamin Graham. He was Buffett's mentor, and contributed to that book. It's straight value investing. Never buy a startup.
There are biographies of Buffett. I read one of them years ago. It goes into great detail about the early deals that got him started. I never did quite understand the deal that moved him into the big leagues, the takeover of GEICO insurance.
Somewhat dated (10 years old), but a classic and probably the best single place to get started:
https://www.amazon.com/Essays-Warren-Buffett-Lessons-Corpora...
His shareholder letters are on the Berkshire website and are excellent.
I downloaded his letters to shareholders to an ebook reader, starting I believe in 1971 or so. Read all of it to the present, about 1500 pages (there's a lot of repetition)
What sticks out the most is what a clear thinker he is.
Would be possible for you to share it? I think would be a very interesting read. Thanks
For his personal background, the history of his companies, and insight into his overall investment philosophy, the Aquired podcast did a three part series on Berkshire Hathaway back in 2021. They also interviewed Charlie Munger just before he passed away. They’re good overviews and enjoyable listens.
Beside the various books he’s written, there’s also his writing on Berkshire Hathaways’ website: https://www.berkshirehathaway.com/
He didn't write a book. Maybe he will now he has more time.
You’re right. I stand corrected.
Watch YouTube videos of old Berkshire meetings, especially ones with Charlie.
For the lazy, "1994 - 2024 Berkshire Hathaway Annual Meetings" will get you started :-)
https://www.youtube.com/playlist?list=PL7aFD7bbigjgjUt0L2LWk...
Read his annual letters to shareholders. Fantastic writings.
Honestly his ex wifes book about how he reads 10k reports is really good. Cant remember the name.
If you’re talking about Mary Buffett, it is his ex daughter-in-law. How to read financial reports like Warren Buffett is the book (I think)
Thats the one, thank you
Never heard about it, and can't find a trace on google. If you remember, please post here.
Warren Buffett and the interpretation of financial statements by Mary Buffett
Thank you !
Ps. That's not his ex wife though, it's his son's ex wife
Warren Buffett’s decision to step down as Berkshire Hathaway’s CEO is both wise and timely, capping an incredible career that transformed the company and inspired investors worldwide.
Check out transcription of his speech:
https://videotobe.com/play/youtube/or0rgxnkOfE
Buffett worked, at least informally, with the Obama administration on some financial policy issues. And he is a proponent of greater taxes on the very rich. Here's one short video (2:46) in which he talks about it:
https://www.youtube.com/watch?v=VJzTsTU1xL8
If the US government really wanted to bring back industrial manufacturing, tax policy is one obvious route - eg a 2/3 tax on billionaire and corporate wealth, such as on the huge pile of cash Buffet-Berkshire is sitting on, but then offer a way out - invest that cash in domestic manufacturing and R & D and it won't be taxed.
This could motivate the private sector to go back to the Bell Labs model, too.
Billionaires get that way by investing in companies. You don't have to force them into it.
They also get that way by inheriting wealth, by buying favorable laws and regulations, by anticompetitive practices (we've seen a few in the IT sector), and by other problematic behavior.
I agree that free markets are great in principle but your comments seem dogmatic - all free markets and only free markets. The conversation would be much more interesting if it was about the nuances.
> They also get that way by inheriting wealth,
Then their parents must have been billionaires, generating it with investments. If the inheritors divest from those investments, then they incur enormous income taxes. So it's likely to stay.
> by buying favorable laws and regulations,
Then it's not free market. There is no government system that is immune from buying influence and corruption.
> by anticompetitive practices (we've seen a few in the IT sector), and by other problematic behavior.
Nothing is perfect.
> The conversation would be much more interesting if it was about the nuances.
Perhaps, but nuances do not drive prosperity. It would also be more interesting if you showed me a prosperous socialist economy.
> the inheritors divest from those investments, then they incur enormous income taxes.
But isn't this sidestepped buy the "buy, borrow, die" approach, often criticized?
https://www.theatlantic.com/economy/archive/2025/03/tax-loop...
The investments remain if they borrow against them. They just become collateral for the loan.
But when they die the basis for the capital gain is the value at the time of death, not the original value, so you basically sidestep capital gains taxation, your children or spouse pay back the loan and get a ton more money than they would otherwise.
I'm not an expert on taxation, but this is something people have been complaining about for a long time.
> Then it's not free market. There is no government system that is immune from buying influence and corruption
The point is that if you're forced to put your money into industries / r&d etc then you don't have enough money to bribe people / political parties / news outlets etc.
Your Manichean divide between 'free market' and 'socialist' doesn't reflect reality. You seem obsessed.
> nothing is perfect
The same could be said about anything, including free market economics. It's meaningless.
> nuances do not drive prosperity
They certainly do. The differences are often in the details.
> Perhaps
That's honest, at least ...
> You seem obsessed
Being rude is not persuasive.
> including free market economics. It's meaningless.
I've explicitly said many times that free markets work even if they're not ideal or perfect.
that doesnt really work if they have to compete on price with foreign producers that have lower labor costs, looser environmental regulations, deeper supply chains and better process knowledge. might as well eat the tax (waiting for monopolistic opportunities) or light the money on fire
As if the government could do better capital allocation in the economy than buffett
Why couldn’t they, for the citizens of the USA? Buffett likely would not allocate it to optimize the outcome for US citizens.
As if the government could do better capital allocation in the economy than buffett
That seems to be what Buffett is suggesting.
Wow, not sure why this surprises me, but I guess I figured he would be like Charlie and keep working until he passed.
The difference is that Charlie didn't have his partner die.
I bet he does. He has money outside berkshire and I'm sure the thought of spending hours every day investing his own money in smaller things, taking more risks etc sounds like fun.
I would assume this means that he is not in great health. Hopefully I'm wrong and he just decided that 85 years or so of hustling for dollars was enough.
There's video of his announcement.
https://www.cnbc.com/2025/05/03/warren-buffett-to-ask-board-...
On one hand, he doesn't sound that great (in terms of subtle overall health markers in his voice) when he talks.
On the other hand, he's 94 and most people (especially men) don't make it into their 90s, so...
comparing the video to 2024, he sounded similar to last year. not much of a difference
At 94, if he had a health concern, I don't think he'd be planning out 7 months for stepping down.
I heard he has a knack for prediction. Pair that with advantageous events (or prior to) and 7mo ahead is the result of a calculation.
Sure, but at his age, heath issues spiral out of control very very very fast. I fully expect that he doesn't have a specific health concern right now and is planning ahead because if he did have a specific health issue, I don't expect that he would be able to plan 7 months ahead.
I suspect there has been succession a plan in place for at least 20 years.
Stepping down ASAP would look worse than doing it 7 months out
Sure, but if there is a health concern, announcing a date and then passing away before then is even worse then just stepping down asap.
He probably took a health insurance and plans to cash in.
You want an orderly succession.
Had to look this up because I am not rich enough to be on a first-name basis with my close personal billionaire friend Charles Thomas Munger https://en.wikipedia.org/wiki/Charlie_Munger
> Had to look this up because I am not rich enough to be on a first-name basis with my close personal billionaire friend Charles Thomas Munger https://en.wikipedia.org/wiki/Charlie_Munger
It's almost certain that the GP isn't either, and is only parasocially on a first name basis.
"had to look this up because i've been living under rock"
Everyone lives under a rock, just different rocks. I'm sure there is plenty you don't know too.
Yeah but most people don't go around making out that anything they don't know is some esoteric thing that should be laid out in detail for them personally.
Tell Ray I said “hey” when you see him at the Summer Jinks this year
It's kind of a damn shame a man like that was not tapped for any major economic position in the government. I don't know how men like Peter Navarro got so far. In a sense, all the money in the world didn't actually fulfill his true potential, and I say that with the utmost respect.
He was asked by Schwarzenegger for advice on California economic policy. Warren did his research, and astutely suggested they should try to scrap Proposition 13 (IMO it's among California's worst policies, but it's a political third rail). I don't think he was asked for economic policy advice ever again :)
I'm sure he's full of good ideas. I think they were just a bit more ambitious than the last 40 years of politicians were willing to stomach or advocate for.
Warren Buffet has warned about the trade deficit problem since 2003 and has proposed an alternate solution called "import certificates" where exporters could earn them and sell them to the importers who must use them. This would result in an even trade balance. He admitted it's essentially a tariff by another name but a more fair and systematic one. In other words, he aligns with Peter Navarro in the problem but differs in the solution.
Not convinced working for government is the best use of your potential, though considering he owns 5% of all US Treasury Bills, I wouldn't say his impact is any less than being a government employee.
> best use
Well I don't think him sitting on billions of dollars at 94 is better from a societal perspective.
That money has already been committed to charitable use for the most part, or already donated. He is essentially managing billions of dollars on behalf of charitable causes. Seems like a pretty good use of his money management skills.
Besides all that he has advocated for that money to be taxed away from him for decades.
He pretty famously lives below his means in a normal suburban house and drives around in a car that most software engineers could afford (Cadillac sedan).
From a societal perspective, I’m not sure you could ask for much more from any one man.
The money isn't "out of circulation". That's not how money works.
Even as T-bills they're doing something.
“Sitting on”? He famously invests in companies that do things.
> I don't know how men like Peter Navarro got so far.
It’s a weird story. IIRC in the run for president before trumps first term he sent Jared Kushner to find out about trade. Kushner browsed Amazon, looking at book covers, and picked Navarro’s book because he liked the title… and the rest is history
You've got to be kidding ...
Oh god, you're not:
https://thehill.com/homenews/administration/328969-report-ku...
I feel impotent, what is there to be done?
Trump should have hired Ron Vara [1], seems like a much more competent guy.
[1] https://www.instagram.com/reel/DINJlumRqed/
He has been asked many times but was not interested.
94 years of age isn't too bad for someone who is a legendary Coke drinker - five cans a day!
https://markets.businessinsider.com/news/stocks/warren-buffe...
I'm guessing the real problem is he's irrationally bullish on the US stock market when there's no sane reason to be.
I wish there was a way for me to automatically show you this post in 10 years in a smug and hostile fashion
Selling billions of dollars in equities to hold cash doesn't scream bullish.
I have been hearing about him being overall bearish for quite some time (or at least, more cautious than average). I have no idea what your sources might be. He does pick individual stocks that he expects to do well, of course.
For all I've heard about WB the last few decades, I couldn't tell you a single thing he's done that's impacted my life, the country, or the world. AFAIK he's a guy who makes a ton of money, plays bridge with Bill Gates, gives advice, and has a fund that made money for other people. Am I missing something?
Buffett invested in boring industries like insurance. As unexciting as it is, businesses like that basically are the invisible infrastructure that makes society work smoothly.
Don't misunderstand flashy at the only way to be important.
Which kind of investment was it though?
* An investment that makes something possible that otherwise wouldn’t happen. Like the US investing in NASA
* Investment that is not consequential in the big scheme except it makes people money.
Did his insurance investments keep some companies alive?
I think the right way to think about Berkshire Hathaway these days is that it's a highly decentralized, minimum viable civilization. They do everything from freight locomotives, to furniture-making, shoes, petroleum, chocolates and more. Then there's a layer of financialization on top of it all (insurance, re-insurance, loan issuance, market-making etc.).
If the U.S. became a failed state tomorrow, there's a genuine chance that Berkshire businesses would keep on operating and trading with each other, on Berkshire rails. It's like a hive of cockroaches -- businesses which are individually strong, that when woven together are un-killable.
Generally the latter. The very short version is that he focused on cash flow, and liked (re) insurance due to success managing float and risk. From there, he'd buy/invest stable businesses and brands. Insurance wasn't his first go, he started bookie work as a kid.
As for saving, he was the guy with a big pile of money in '08 (and other times). Someone you call when your business is dying or you want to retire; he gets the deal, not you. His Bank of America warrant play was a big one from that time.
I didn't finish snowball, but the first half goes over a lot of it.
https://en.wikipedia.org/wiki/The_Snowball%3A_Warren_Buffett...
I like WB as much as the next guy and while he was wildly successfully at making money, he hasn't really done anything else. His main motivation has always been to make money for himself and his shareholders, so why would we expect anything else?
Some of his biggest investments are in things like candy, soda, beer. Not exactly great for society overall and not really enabling anything other than diabetes.
He was already an massively wealthy in 2008 and just having a huge pile of cash and using it to make more deals is not some great achievement to be celebrated.
Yes he made billions off of his 2011 bofa investment, so good for him and brk but what did this do for anyone else?
If BH didn't exist would it really matter? I don't think so.
He was intellectually interesting if you read his letters and the like.
He's impacted your life, but only in a diffuse manner of having boring businesses sell you useful products or services at a good price.
He's not a politician, he doesn't have to.
Still, he's given dozens of billions in charity, given important counsel to the government during the 80s and 2008 financial crisis.
During 2008 financial crisis he essentially saved Goldman and General Electric both preventing further escape of capital and an even worse situation for the US and potentially world economy.
In any case, he's a capitalist who likes making money for himself and his shareholders, he ain't a medical researcher or your mayor.
Lol, his important counsel was “bail out my portfolio plz.” Saving businesses that deserved to fail using free money printed by the fed isn’t a virtue. He was also a big cheerleader for the frauds at Wells Fargo.
Nice paper that was linked on Marginal Revolution: http://docs.lhpedersen.com/BuffettsAlpha.pdf
How much of Berkshire actually relied on Buffet toward this announcement? I'm increasingly suspect of 90+ or 80+ adults operating the machinery of massive entities. Lots of examples of this.
You’re probably right, but I suspect he guided the general direction of investments. I suspect they had very clever highly qualified younger people dealing with most the day to day decisions within those boundaries. I wouldn’t discount the contribution of either: both broad vision and narrow focus can add a lot of value.
If he did nothing it would be a lot, he sets the tone.
A young investor who thinks the whole portfolio should be in shitcoins because they are going to moon next week won't get a look in and the culture holds.
Take away the figure head and things can creep in a bad direction.
Conventional wisdom (which I believe) is that long term individual investors do not beat the market. However, from my mostly-uniformed view, Buffett did exactly that. What was his "secret"? Did he build most of his wealth outside the market?
Charlie Munger used to talk about how easy it used to be because there was so much less competition and the competition wasn't that smart. Think by the 70's once they figured out how to accurately price options with the Black-Scholes model things started to ramp up. By that point, Buffett was already a player and had the funds to make moves.
Interesting. I've never heard of that model. So what Munger is implying is that by the 80s even Buffett wasn't beating the market but was leveraging his money for gains. Thanks!
Sorry I didn’t mean Buffett and munger used the option pricing, I mean regular people did. They also got more money by buying up insurance companies and investing the float
Buffett did one time write some option but he got a lot of grief from the credit rating people over it.
Buffett's father, Howard Buffett, was perhaps the most libertarian congressman in U.S. history.
He was also a vehement opponent of foreign military intervention, including military aid:
"Even if it were desirable, America is not strong enough to police the world by military force. If that attempt is made, the blessings of liberty will be replaced by coercion and tyranny at home. Our Christian ideals cannot be exported to other lands by dollars and guns. Persuasion and example are the methods taught by the Carpenter of Nazareth, and if we believe in Christianity we should try to advance our ideals by his methods. We cannot practice might and force abroad and retain freedom at home. We cannot talk world cooperation and practice power politics."
Someone at my firm went to a BH AGM. There’s literally nothing like it; it’s like a Star Trek con, but for capitalism.
Im predicting the stock market dies with him; or probably more accurately becomes far more chaotic and unstable with far higher profits for those who follow his rules.
Something that's happening in the markets is that nobody owns anything anymore. With the exception of elon and bezos. Most fortune 500s have no owner; they are all on low risk autopilot.
And now after decades of stock buybacks, quantitative easing and other mad financial manipulation, comes again the time for value investors, and he leaves?! :)
They have like half a trillion in cash on the balance sheet. I'm sure they're going to scoop up a bunch of value in the coming years. Whoever takes over has a hell of a war chest to work with.
He did so before in 1969 when he closed his investment partnership because the markets were overvalued.
What are you trying to say? It's not clear at all.
Pretty clear and funny to me. Not sure how to explain it without just repeating the same thing.
It seems the markets will soon go through a period when Buffet's approach will work best, which makes it an inoportune moment for him to retire. Of course at his age retirement is expected, maybe even inevitable - that's the joke.
> It seems the markets will soon go through a period when Buffet's approach will work best
Why would you think so?
US equity is still at insanely high valuations, markets are full of denials about it and about the future tariff related uncertainty.
I don't know how much of Bershire's funds Buffet personally manages nowadays - he's had other people managing a lot of it for years.
> And now after decades of stock buybacks, quantitative easing and other mad financial manipulation, comes again the time for value investors
These are things that have happened in the past. Mad financial manipulations? Like what is "mad"? "Comes again the time." How is it different than any other day?
> Pretty clear and funny to me.
You're making up your own interpretation of nonsense then calling it obvious. Good luck with that.
Just finding it mildly amusing to consider that in the messed up economics we are entering with Trump, there may be a shift to value investing, something I have always associated with Buffett.
He dropped the mic and left the stage.
Now count the days until they finally load up on Bitcoin.
https://web.archive.org/web/20250503183427/https://www.bloom...
All that money and he's still a mortal just like the rest of us. I wonder if mega billionaires like him have done private research on life longevity, cryosleep, mind-upload, etc. It's the only useful thing they can do with that much money that directly benefits them. Anything else (legacy, influence, children, etc.) doesn't benefit them when they're gone.
There are things I don't like about him, and the way he is idolized by people that want to accumulate money. But I will say you can't really throw that "all that money and he's still mortal" thing at him because in reality he lived really below his means. So the money part is interesting, why did he try to get so much if he didn't really need it? I think (without really knowing anything about him), that he wanted money like everyone else to be independent, but at one point it turned into a game to see how much he can win.
Hes literally like, autistic or something. If you've ever watched the documentary on him he has a got a weird way about him. Hes got an obsessive knack for numbers and just got into the finance game where literally your job is to make as much money as possible. Its your fiduciary obligation. The rest os history.
With all the billionaires we've had, the fact that no one is living unnaturally long or in some kind of cryosleep or AI simulation probably means one thing: It's simply not possible, and if it is, all the money in the world won't get you there.
Or maybe "optimizing for the most personal wealth over anything else" and "optimizing for the longest healthy lifespan over anything else" are two different goals, pursued by different people.
As a result, extreme results in one or the other are not usually attained by people who do not have extreme prioritization of just one.
It is totally possible that a rare talented unicorn pursuing (and succeeding at) both goals simultaneously is needed for us to achieve radical life extension.
> the fact that no one is living unnaturally long or in some kind of cryosleep or AI simulation probably means one thing: It's simply not possible
_Yet_.
If you looked at the Wright Brothers aircraft, what real use is there for a vehicle that carries one person, maybe 50lbs of cargo, and moves at 80 mph?
The Mahathir bin Mohamad of the financial world