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Suddenly, Everyone Has Advice for Warren Buffett


Jun. 18 2020, Published 12:39 p.m. ET

  • Berkshire Hathaway’s (NYSE:BRK.B) chairman, Warren Buffett, has underperformed the S&P 500 since 2009. This year, several analysts have criticized the legendary value investor.
  • Everyone seems to have some advice for Buffett. He’s arguably among the best investors of all time.
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Warren Buffett

Over the last year, several analysts have criticized Warren Buffett. Berkshire Hathaway has underperformed the S&P 500 (NYSEARCA:SPY) by a wide margin since the beginning of 2019. Meanwhile, Berkshire Hathaway has been underperforming the S&P 500 since 2009. Last year, Jim Cramer criticized Buffett. David Rolfe, the chief investment officer at Wedgewood Partners, also criticized Buffett and exited his investments in Berkshire Hathaway.

Berkshire Hathaway

Last year, Bill Ackman of Pershing Square showed his faith in Warren Buffett and took a stake in Berkshire Hathaway. He increased the stake in the first quarter of 2020. Recently, he disclosed that he exited the position. Ackman has been terrific in 2020. He made money by shorting the markets when US stock markets crashed.

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Everyone’s advice for Warren Buffett

Many investors follow Warren Buffett’s advice and his investment philosophy. However, David Portnoy of Barstool Sports thinks that he’s better than Warren Buffett. Portnoy made a lot of money trading in these volatile markets. While a lot of traders have made money over the last three months, we’ll have to see their returns over the long term.

Many investors have criticized Buffett for exiting airline stocks in April at a significant loss. Retail investors bought into airline stocks after they fell sharply. Airline stocks have jumped sharply from their lows.

Warren Buffett missed the US stock market crash

Edward Jones analyst James Shanahan has faulted Warren Buffett for missing the recent rally. Since the crash in the first quarter, US stock markets have recovered sharply. Prior to the first-quarter stock market crash, Buffett missed out on the crash in the fourth quarter of 2018 as well.

CFRA Research analyst Cathy Siefert has criticized Buffett for his bets on Occidental Petroleum and Kraft Heinz (NASDAQ:KHC). In the beginning, the Occidental Petroleum deal looked promising. Back then, nobody would have forecast an oil price crash.

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Berkshire Hathaway and tech shares

Christopher Rossbach, the chief investment officer of J. Stern & Co. advised Warren Buffett to buy companies that would add value in the future. Many investors have criticized Berkshire Hathaway for not investing in tech shares. Buffett admitted to missing out on Amazon (NASDAQ:AMZN) and Google. While Berkshire Hathaway has a small stake in Amazon, a different investment manager who took the stake.

In my view, the recent underperformance notwithstanding, Buffett is still among the best investors of all time. There are some attributable reasons for Berkshire Hathaway’s underperformance including the general underperformance of value investment strategies. Read Why Warren Buffett and Berkshire Are Underperforming to learn more.


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