When Warren Buffett takes the stage at the Berkshire Hathaway (BRK.A) annual meeting this weekend, the love and adulation of his 50,000 followers will almost be palpable. And why not? At nearly $160,000 a share, the stock is up almost 30% since the last time they met, having outperformed the S&P 500 by a 2-to-1 margin. Since the last outing in Omaha, there has also been nearly two dozen acquisitions, a handful of strategic investments and a down-tick in the political rhetoric and tax policy promotion that was irritating to some of his affluent fans.
While acknowledging that Berkshire investors are happy with their stock and loyal to their leader, Larry Swedroe, author of Think, Act, and Invest Like Warren Buffett, says most actually ignore his most basic advice.
"I think it's one of the great anomalies," Swedroe says in the attached video, explaining that people almost always name Buffett as the greatest investor, "yet often do the opposite of what he instructs."
He cites three key areas where the Buffett faithful look the other way, including the Oracle's commandment to ignore all market forecasts, to never time the market, and to be passive rather than active when it comes to investing.
What's worse, Swedroe says, is that by not follow this simple set of rules, investors are missing out on an opportunity where they would be "virtually guaranteed to outperform."
As for Berkshire itself, the annual meeting is not typically a great forum for criticism (heretics may be confronted by an angry mob!), though Seabreeze Capital's Doug Kass will be on hand this year to play to the official curmudgeon during the five-hour Q & A session.
- Warren Buffett
- Berkshire Hathaway