I do not understand why anyone on Wall Street still pays attention to James Altucher. While many of his stock advice columns are beautifully written, they are not worth the paper that they are written on. Whenever I have bought a stock on his recommendation, it has moved dramatically – down. In the stock advice media wars, it is a race to the bottom between him and Jim Cramer.
This week, he decided to attack Warren’s Buffett for a penning a thought provoking oped about taxes for the New York Times. Buffett wrote in the editorial titled, “Stop Coddling the Super-Rich,” that he only paid 17% of his income in taxes, while his staff averaged 36% tax rate. Altucher is correct that Buffett has said this many times in the last 10 years. The thoughts of the third richest American bear repeating during a period of unprecedented turmoil. Buffett’s words may provide cover to Republicans, who pledged no tax increases, if they decide it is best for the country to raise taxes.
This section of the editorial provides the most compelling arguments that raising taxes may be best for the country.
I have worked with investors for 60 years and I have yet to see anyone — not even when capital gains rates were 39.9 per cent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off. And to those who argue that higher rates hurt job creation, I would note that a net of nearly 40 million jobs were added between 1980 and 2000. You know what’s happened since then: lower tax rates and far lower job creation.
Buffett’s first point is that no one stops making good investments because of the tax rates. As a stockbroker for over 25 years, I have found that is true. His second point in the paragraph is that the lower tax rates since 2000 have not resulted in more jobs.
If Altucher had attacked Buffett on his economic analysis, I would have stayed quiet.
He decided to attack Warren Buffett’s patriotism. According to Altucher’s convoluted thinking, Buffett did not write this oped piece for the good of the country. The “Oracle of Omaha” urged the raising of taxes so that owners of stock would be less likely to sell, therefore, making it easier for him to sell. Besides being ridiculous, his argument is factually wrong. While it is harder for anyone with a large block to sell when there is bad news causing a stock to drop, Buffett almost never sells on such a day anyways. For example, he waited years to sell his Salomon Brothers after the bid rigging scandal.
While many dismiss attacks such as Altucher’s as noise, I worry that it will inhibit others from participating in the debate. If the country is going to move forward, we need all the help that we can get.
I can only assume that Altucher is jealous that no matter how often he writes, he will never receive the attention that Buffett gets for one oped.
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