Why Warren Buffett’s not a “Macro” guy

I was recently watching a clip of Warren Buffett. I can’t explain how every time I listen to the man I attain a greater knowledge not only in investing but in the philosophy of life. I could find a quote of his to fit any occasion, (and I usually find myself doing just that). He’s a brilliant man with a simple philosophy on just about everything.

But what I found most amusing is how he knows exactly who he is. He claims he knew he would be wealthy from a very young age, (he made his first investment at 11 I believe). He said he would be a millionaire by 30. 31 was close enough. He doesn’t need a lavish lifestyle to define him, he stays with his simply priced home he bought decades ago and his $100,000 a-year salary (even with inflation!). I even believe he doesn’t want to be the richest man in the world. His image is his non-image. And yes, I’m getting carried away.

In the Q & A session after his speech to the students at University of Florida he says “I know this is going to sound disgusting, but I have been very lucky”. Of course all Billionaires say that but he blames his exuberant wealth on the fact that he happened to be born in a perfect time, in the best country in the world and with a very close tie to people who were very knowledgeable in his ultimate area of expertise. (His father was a stock broker and he learnt by Ben Graham in his younger years).

When asked about Interest Rates, the Japanese economy and the future of the stock markets he responds by saying he’s not a “Macro” guy.

Why? The answer is simple. He never had to be. He started investing somewhere around 1950. Yes, the market has seen many ups and downs since that period. But in general the market has been up, especially considering the recent bull market we’ve had for the last 25 years. By simply buying at value you couldn’t go wrong.

But how many World Wars, Depressions or empire collapses has he lived through? He has even managed to stay out of, what many believe to have been, the worst Stock Market Bubble/Crash in history. These macroeconomic trends haven’t ruined him in the past why should they now?

But I don’t believe we have all been as fortunate and will be. We don’t live in a crisis. We live in something worse. A “perfect” world. Read any article in the media. It will contain one of two things: How great life is or how it may, according to some sentiment out there, may possibly but not probably, get a bit worse.

We live in a great and dynamic time. But as the saying goes “This too shall pass”. We know not how long it will last, we know only that the answer is not forever.

For a more “devastating-but-not-pessimistic” view click here.


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