I have watched over the years as many believe the words of those who they think “know” what is going on in the markets, yet in all reasoned analysis they have no more a clue than you or I.
Take for example Warren Buffett. A dottering old man who lives in the same house as he was born in, lives – according to the marketing machine called ‘Buffett” a very humble life, nothing has changed for him other than being worth 10’s of billions. So, what’s the appeal? It’s like Miss Marple, she seemed harmless and so those around her took her into their confidence. Buffett seems the same to me, he speaks and everyone listen’s. Yet to what? Over the past 12 months (and longer) he has been talking up the US economy, yet we all know it’s a basket case ready to topple over. If it wasn’t for the fact that the $US is woven into so many daily facets of the world economy it would have been dumped and treated with the same distain as Greece is currently feeling long ago. Yet Buffett speaks and markets move. Where is the declaration of self interest in all this? Where is the reasoned analysis to suggest he is right and all others are wrong? If Buffett says all is well and markets go up the self-serving interest is meet by the price, and hence value of his company rises.
Analysis has been done and Buffett is right when the market is moving up and he is wrong when the market moves down. He has underperformed the market over the past 20 yrs (since 1993), however the loss seems less because he doesn’t take big risk’s, hence the value doesn’t decline as it would as if he was ‘really’ out there making money.
Steve Jobs is another. Apple have a product – a pretty ordinary one in all respects, however the technology and the future applications are brilliant, yet when he speaks so few seem to ask the important questions. He says the future is bright and the Apple share price goes up and all is well for the future: it’s bright. The same use to be said Micro-soft yet those heady days are long behind us. Google is another.
This is not to say those mentioned and others don’t have the right to speak out and express their views, by all means please do so. Yet when you have the ‘cult’ following of a Buffett then those who listen should be asking more questions of him, not less. Some of you may argue that Buffett et al. is no different from a politician talking up an economy etc. yet they have significantly more scrutiny thrown at them. Look at Sawn, appalling as he is as Treasurer, he can’t mention a single $ value without headlines the next day proclaiming brilliance, or more so in his case farcical ineptness.
Just because someone says it’s so doesn’t mean it is. When will real critical analysis be sort, and in fact demanded when those who people apparently respect actually wake up and say … “Ohhh, could you provide some evidence for your statement?”