Ah, the recession: how the mighty have fallen. Today, uber-investor Warren Buffett, once king and overlord of the financial world, will face 25,000 angry shareholders, all of whom will be united in one question: “Where has our money gone?”
According to a piece in today’s Financial Times, Buffett’s insurance and investment company Berkshire Hathaway has seen its ‘worst year ever’ after it lost 9.6% in book value per share. The loss has prompted critics to question whether the 78-year-old still has his magic touch.
“I think he took his eye off the ball a bit [this year],” hedge fund manager Douglas Kass told the FT today, while Buffett himself admitted he had done ‘some dumb things’ during 2008, including buying shares in oil group ConocoPhillips when crude prices were at a peak and buying stock in two Irish banks which subsequently saw their share prices plummet.
Even Buffett biographer Alice Schroeder told the newspaper Buffett may have lost concentration. “Berkshire is like his child. It was being ignored and he didn’t like that. He’ll be asked questions [today] that will either force or allow him to defend or explain what has gone wrong.”
Further indications Buffett may be losing his touch came in a letter he wrote to shareholders earlier this year, where it appeared he may be moving his focus away from counting pennies and taking solace instead in the majesty of the English language.
“At year end,” he wrote, “investors of all stripes were bloodied and confused, much as if they were small birds that had strayed into a badminton game.” A brave attempt at metaphor indeed, Warren, but we suggest you stick to number crunching for now.