Wednesday, November 7, 2007

Do you have a mancrush on Warren Buffett?

Do you remember the Seinfeld episode, "The Boyfriend," when Elaine starts dating former Mets great Keith Hernandez. Jerry gets to meet him and beforehand is fretting about his shirt. Jerry worries that it was too early in the relationship to help Keith move.

As with many Seinfeld episodes, it was a very funny rendering of a true life situation. Investors get mancrushes as well, especially value investors. Perhaps you don't have it bad for Buffett, but what about Ben Graham? Do you think that David Dreman is dreamy? Joel Greenblatt? Marty Whitman? Seth Klarman? Eddie Lampert? It goes without saying that you've read the books. Do you religiously read GuruFocus in order to see what these guys are buying? Do you feverishly Google them searching for articles or blog posts for information about their latest moves or philosophical treatises? Have you been to the Berkshire annual meeting in Omaha?

It's good to have heroes or people that you emulate. Reconstructing the rationale behind past investments of the masters of capital allocation can be very instructive. Just don't forget that you are you. Coke or the Washington Post are not selling at a fraction of their intrinsic worth. You can't snatch up KMart bonds right after its bankruptcy. This is not to say that you can't match or exceed their long term records. As Buffett has pointed out many times, he has more money than ideas and he could get better returns if he weren't so big.

Take a cue from the latest Nike basketball commercial featuring Buffett pal LeBron James, "you don't want to be LeBron James, you wanna be better than me." So learn what you can from these masters, but don't be hedged in by their thinking. Just like they did, you'll have to find the style that works best for you.

1 comment:

Entrepreneur said...

Well said. And yes, I do have a mancrush on Warren. I have a lot of biographies on him and his investing strategies.

The only thing I haven't done is learned how to play bridge.

Cheers!