>Sage advice from a dumb prophet

>And so to this week’s Sunday Times business supplement. Amid all the predictable drivel about the banks and the state of Sir Fred’s nice little earner, this curious piece – ‘Buffett: I was dumb in 2008’.

The article comes across as a mea culpa from the Sage of Omaha for mistiming the price of oil last year when he bought into Conoco Phillips at the top of the market. He also dived into a couple of Irish banks that looked cheap at the time – but weren’t. Result, some serious losses for his investment vehicle, Berkshire Hathaway. Even so, Berkshire beat the Standard & Poor 500 index by a handsome margin last year. So perhaps we can forgive Homer for nodding on this occasion, exceptional as it has been.
One of the strongest elements of Buffett’s investment strategy over the years has been his fondness for big, reliable brand names, such as Coca-Cola, American Express, and more recently Tesco. They have their ups and downs of course, but over the long term, they always turn up trumps.
The same can be said of Warren. He may not get it right moment to moment, but he has an uncanny habit of summing up the zeitgeist accurately. Sample: “Only when the tide goes out do we discover who’s been swimming naked” – an apt metaphor for most of the financial community currently. But it’s more than a way with words. In the long run, he’s invariably proved correct. His prognosis: no quick recovery but “America’s best days lie ahead”. 
Let’s hope so, for the rest of our sakes.

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