ROB ROSE: Holding out for a hero
Warren Buffett is deified as an investment oracle, but is he taking an overly romantic position on the ruthless cost-cutting at 3G Capital?
To those who don’t know their Berkshire Hathaway from their Bokomo Weet-Bix, the feverish fuss over Warren Buffett’s annual soirée in Omaha may seem vastly overdone. Sure, the 86-year-old Buffett may be the fourth-richest person on Earth (estimated fortune: US$74.1bn) thanks to a 52-year record of investment success; and sure, his company’s stock price may have grown 20.8% compounded annually since 1964 (more than double the 9.7% of the S&P 500). But what relevance could it have for the average South African, 14,000km from Omaha, a town in Nebraska with fewer than 500,000 people? Well, the 37,000 people who flocked to Omaha’s CenturyLink Centre last Saturday will tell you that the few nuggets of investment wisdom doled out by Buffett and his partner, Charlie Munger (93), are universal.For starters, his advocacy of index funds like ETFs ("management by professionals, in aggregate, would over a period of years underperform the returns achieved by rank amateurs who simply sat still"); ...
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