Would You Fire Warren Buffett?

“How would Buffett be viewed if, instead of being the chairman of Berkshire Hathaway, he ran an open-ended mutual fund by the same name?” –Larry Swedroe

07-27-2020

Who do you think is the greatest investor of all time? Chances are you would say Warren Buffett.

Check out Swedroe’s article where he makes the case that many investors probably would have (mistakenly) bailed on Buffett’s hypothetical mutual fund. If Buffett Were a Fund Manager

Why would they bail? Investors hurt themselves by becoming impatient with short-term underperformance. Buffett is a value investor (as we are also here at Verity Capital) and growth stocks have outperformed value over the last several years. Historically, this is an anomaly. Over time, value has proven to outperform over all time periods.

There has always been a reversion to the mean. That means that value has eventually recovered and outperforms growth. That swing to value is normally massive and swift.

So, would you fire Buffett or would you stick with the investing principles that have proven to outperform over the long run?