Thursday, April 7, 2011

Steinhardt vs Buffett, Why Demeanor Matters, Education in India vs US, and U.S. Retail Remains Strong

Another interesting week is coming to a close, and the first part of the week was noteworthy in that a couple of legendary investors were the topic when one took some real shots at the greatest

investor of our time, Warren Buffett. Michael Steinhardt is a ex-hedge fund legend turned philanthropist. He outperformed the S & P 500 for many years and made millions of dollars for investors. He absolutely

trashed Warren Buffett on monday during his time on CNBC:

http://video.cnbc.com/gallery/?video=3000014942

http://video.cnbc.com/gallery/?video=3000014541

My comment on the matter is while Steinhardt has some valid points, his demeanor during the interview undermines his arguments about Buffett. Steinhardt comes off as a bitter, jealous man when he has no need to be. There are inconsistencies with Buffett which Steinhardt accuratley points out. However, his questioning of Buffett's investment results vs the S & P 500 is stupid as everything can be verified. Buffett's demeanor is part of why so many admire the man. In the height of the 2008 downturn, Buffett was investing huge sums, and encouraging others to do so as well, and at this point, well the result speaks for itself. One can have very valid, logical arguments, but if it is couched in dourness, the arguments lose effectiveness.

Many people have bemoaned the lack of U.S. competitiveness in education, however, the facts don't necessarily indicate the U.S. is a lost cause. Very good article in the journal on India's education issues:

http://online.wsj.com/article/SB10001424052748703515504576142092863219826.html?KEYWORDS=education+in+India

Retail sales surprised today- hard to see things not getting better, though 110$ oil and higher food prices don't help the cause:

http://www.nytimes.com/2011/04/08/business/08shop.html?_r=1&ref=business

Hope everyone has a good and safe weekend.

As always, on any company mentioned here, past performance is not a guarantee of future returns. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.

Yale Bock, CFA
President, Y H & C Investments

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