Newflash: Warren Buffett’s stock portfolio has been hit pretty hard this year. Although he famously insists that he buys companies to own — even if the market were to close for a few years — few can resist pointing out that the “Oracle of Omaha” didn’t avoid the sell off.
Bloomberg runs down many of his big losers, like US Bancorp, Kraft, Eaton Corp. and Ingersoll-Rand, and quotes some observers who point out the obvious, that some of his buys weren’t perfectly timed.
But this misses the point, we think. What’s impressive about Buffett isn’t how his stocks have done, it’s that we’ve yet to discover a ticking time bomb in his portfolio. There are plenty of managers who talk about caution in their business, but then you discover they had some off-balance sheet conduit that left them naked to the mortgage mess. Or they made some leveraged bet to squeeze out a little more yield and it blew up in their face. As the crisis has proven: Buffett really did walk the walk all these years. When he said he didn’t get tangled up in over-complexity, he meant it.