Kind of an interesting article from "The Street" on a meeting with W. Buffet in which he said,
"He (Buffet) compared the excitement such speculation creates to the thrill of the early rounds of one of the oldest money scams. "It's the same principal as a chain letter. There is no wealth created by a chain letter," Buffett said. "There are actually frictional costs like envelopes and postage. Trading [speculative stocks] is no different."
Still, Buffett acknowledged that just like a successful chain letter, the speculation could continue for the foreseeable future. "In the end valuation does count, but it can go on for a long time. When you have a growing number of participants with ever-growing sums it can last a long time."
In response, Munger (Berkshire Vice Chairman Charlie Munger) was his typically glib self. "I think the reason we use the term 'wretched excess' is there are wretched consequences," he said. "If you mix the chain letter or Ponzi scheme with something like the Internet, you mix something very bad with something very good. But, if you mix raisins with turds, you still have turds."
I would submit that an awful lot of folks got left with the latter over the last 3-4 weeks. gg
Buffet said that Berkshire trimed at least 25 million shares of Disney from their holdings last year. The question is, are these rasins??
CU Paul K. |
