Wall Street for Dummies
Hardly a day goes by that I don’t run across a column that purports the ill-conceived notion that emulating Buffett will lead you to the pot of gold at the end of the rainbow. So, the other day when I turn to Jason Zwieg’s column and saw the title “What You Can Learn From Young Warren Buffett,” smoke billowed from my ears like a character from a Popeye cartoon. The article was about a book written by Brett Gardner, a financial analyst at Discerne Group, a private investment group located in Stamford, Conn. Gardner spent seven years of Saturdays and all of 2023 analyzing 10 stocks that Buffett bet on (Yes!! The word Mr. Zweig uses is BET) back in the 1950s when he was twenty years old.
Come on folks, that was 75 years ago. The economy and the market have changed dramatically. You no longer have to call your broker to get a stock quote. Five-year-olds can get them on their cell phone. Back in the day, trades were man by octogenarians wearing blue coats with pad and pencil in hand. Today trades are made by computers without human involvement. This guy and his academic buddies need to get out more.
Zweig’s article continues down the road to la la land by listing the authors sacred 10. Of the 10, 8 never made it to the 1970s. They either went bankrupt or just disappeared. Included in this ignominious list are a Boston streetcar company, a barrel maker and a Philadelphia department store. I remember Buffett and Mungers adamant pronouncement that their holding period was forever.
Gardner’s delusional tome devotes a significant amount of ink to documenting the hours upon hours Buffett spent researching these companies before purchasing them. Not only did he devour every ounce of public information on these companies, he also traipsed to their corporate headquarter to drill the companies’ officers. Zwieg sticks a fork in Gardner’s fantasy about applying 20-year Buffett’s methods to today by noting that corporate executive can no longer shared detailed financial information with individual investors. ?
As I continued my read through this mind-boggling story, I came upon a paragraph that returned my heart rate to normal and dissipated the smoke emanating from my ears. In an outright refutation of Garners outlandish supposition, Zwieg states with clarity and insight, “Today investors have a luxury that was unavailable to the young Buffett. They can put their assets into a market tracking index fund. That way, they can be assured that their investments won't underperform.” An approach that Buffett has been advising anyone who would listen, since 1992.
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