Warren Buffett, Berkshire-Hathaway, and a higher standard

I just read a post on Dan Gillmor's blog entitled "The Wrong Standard", which talked a little about accounting scandals, Wall Street, and Warren Buffet and Berhshire Hathaway. I immediately comented on my own reactions to his post and I re-blog those comments below since I think they are too important to be lost in someone else's blog...

I agree with the gist of your comments on Warren Buffett, but I really do think that he needs to go the extra mile here, especially since he really is one of the "last men standing" that true investors can have at least a little faith in.

The reason he (and all you shareholders, including my mother) got in trouble with General Re is a failure of due diligence and a failure to hold the acquisition to the same high standards he's had with past acquisiitons. General Re has been nothing but bad news to B-H shareholders (and I WAS one, and many GR shareholders were misguidedly turned into B-H share-flippers) since the get-go. AT least we can credit Warren with being honest about each of GR's problems as they've come out.

To go the extra mile... Warren needs to focus on true investment (for the long-term) rather than playing the "trading" game with silver, treasury shuffling, foreign exchange, commodities, etc. He also needs to further streamline and simplify B-H so that even simple-minded shareholders can make sense of every aspect of the company finances.

A good start would be for B-H to spinoff GR so that market forces can force GR to reform itself and restructure itself away from "rocket science" financial engineering.

As far as Barron's and the Wall Street Journal, make no mistake, if you're a true investor (for the long-term), those two rags ARE THE ENEMY. Neither is focused on truth or enlightenment of the investor, but at best offering grist for short-term trading. I used to read both, both 98% of their value can be gotten from web-based sources. The other 2% of their value simply isn't worth the moral bankruptcy of "feeding the crocodile".

With the internet, the web, blogging, and grassroots activist citizen-journalists, what possible value do Barron's and WSJ [...] have to offer those of us who are not Wall Street insiders? And why do any of us need to tolerate the undue and unfair influence that "The Journal" has insinuated in our society, especially in matters of national public policy, especially beyond even strictly financial matters?

I do believe that Warren Buffett CAN come through for us (citizens, even if not investors), but only to the extent that he further distances himself from the kind of "Old Wall Street" that is unfortunately epitomized by Barron's and the Wall Street Journal.

I did leave out one statement... when I referred to Barron's and the Wall Street Journal as "the enemy", I meant to also say that on that score "either you're with us, or you're against us." I really do so them as the enemy of true investors. And I do see Warren Buffett as one of our best hopes to clean out that financial sewer called "Wall Street".

-- Jack Krupansky