Few American businessmen is as celebrated by the media than Warren Buffett, the 82 year old famed Oracle of Omaha, Neb., known for his stellar long-term record of terrier-like digging-up investments unrecognized by other money managers and producing returns that beat the market.
But Berkshire released its annual report last Friday, and the miracle man proved mortal.
This year’s performance represented an increase in the net asset value of his fund of only 14.4 percent, 1.6 percent less than the rise of the S&P. “Most investors’ timeframe doesn’t last more than 10 years; that’s why smart stock-pickers look at five-year returns, and there Berkshire hasn’t even beaten the total return of the S&P 500 index: It’s up just 16 percent compared to a 32 percent return on the S&P.” writes Fox senior business correspondent Charles Gasparino in the New York Post.
“Buffett doesn’t do much better over three years, up about 23 percent versus 35 percent for the S&P. For 2012 alone, even Buffett concedes that the S&P beat him, returning 16 percent compared to Buffett’s “book value” measurement, which shows a return of 14 percent. ‘If you look at [Buffett’s] performance lately, he’s actually below average,” notes Ed Butowsky, who runs Chapwood Capital Investment Management, which advises clients on where to put their money. “In fact, he isn’t very good at all lately, though he continues to have good PR.’ ”
Yes, there are a lot of numbers that point to Buffett’s continued skill. He prefers looking at Berkshire’s “book value” or the balance sheet value of his assets and comparing that to the S&P and Berkshire is very profitable. In 2012 alone, its net worth rose $24 billion. Buffett for his part offers a somewhat plausible excuse. Operating a fund of around $250 billion is difficult. One needs to generate much higher returns to make an impact.
But as Gasparino observes, “it’s his decision to keep Berkshire so large; he could easily return a nice fat dividend to shareholders, but he’s been loath to do so over the years. And, for all his image as a careful investor, Buffett’s actual investing style is more risky than most people realize, which means his good years need to be higher to compensate clients for the chances he takes on all those “value” investments.”
The secret to Buffett’s investing as the Financial Times’ John Kay observes, is no secret. Berkshire owns a number of insurance companies which throw off considerably cash, since the nature of insurance is that the payment of premiums precedes the payment of claims. These funds together with retained earnings are invested in a portfolio of wholly owned businesses and large holdings in listed companies. The distinguishing chracteristic of most of these companies is that most have a sustained competitive advantage or market position that competitors find difficult to copy. His style is to buy and hold for the long term. As the FT’s Kay suggests, if Buffett is a genius, it is the genius of simplicity.
But has the sage’s reach exceeded his knowledge? As the media’s most famous wealthy liberal, does he gets a pass that other investors don’t? I it time for the octagenerian to pick a successor? Or, as Gasparino argues, is Buffett just spread to thin? “What with all the politicking he’s done in the Obama years. It’s hard to recall anytime in recent memory that any investor has been as politically active as the Obama-era Buffett. With all this support from an economic genius like Buffett, you’d think that President Obama would have the economy on overdrive. News flash: It’s not, and won’t be anytime soon, given all the taxes he has raised and still threatens to raise.”
The numbers don’t lie: When it comes to the economy, Obama is no Warren Buffett. And based on the latest Berkshire returns, even Warren Buffett is no longer Warren Buffett.”
Read: <href=”#axzz2MrsrheID”>https://www.ft.com/intl/cms/s/0/50adb8c4-84d5-11e2-891d-00144feabdc0.html#axzz2MrsrheID
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1:00 - 5:00 pm
Over 70% of Executives Surveyed Agree: Many Strategic Planning Efforts Lack Systematic Approach Tips for Enhancing Your Strategic Planning Process
Executives expressed frustration with their current strategic planning process. Issues include:
Steve Rutan and Denise Harrison have put together an afternoon workshop that will provide the tools you need to address these concerns. They have worked with hundreds of executives to develop a systematic approach that will enable your team to make better decisions during strategic planning. Steve and Denise will walk you through exercises for prioritizing your lists and steps that will reset and reinvigorate your process. This will be a hands-on workshop that will enable you to think about your business as you use the tools that are being presented. If you are ready for a Strategic Planning tune-up, select this workshop in your registration form. The additional fee of $695 will be added to your total.
2:00 - 5:00 pm
Female leaders face the same issues all leaders do, but they often face additional challenges too. In this peer session, we will facilitate a discussion of best practices and how to overcome common barriers to help women leaders be more effective within and outside their organizations.
Limited space available.
10:30 - 5:00 pm
General’s Retreat at Hermitage Golf Course
Sponsored by UBS
General’s Retreat, built in 1986 with architect Gary Roger Baird, has been voted the “Best Golf Course in Nashville” and is a “must play” when visiting the Nashville, Tennessee area. With the beautiful setting along the Cumberland River, golfers of all capabilities will thoroughly enjoy the golf, scenery and hospitality.
The golf outing fee includes transportation to and from the hotel, greens/cart fees, use of practice facilities, and boxed lunch. The bus will leave the hotel at 10:30 am for a noon shotgun start and return to the hotel after the cocktail reception following the completion of the round.
