Folks love to point fingers.
When it comes time to pin the blame for the country's economic woes, there is no shortage of answers. Aggressive mortgage brokers may have been the early scapegoats, but now the net is cast ambitiously wide.
Liberals blame conservatives for lax regulatory oversight. Conservatives blame liberals for fears of nationalization. Turn on the TV, and talking heads will trash talk Wall Street greed, fraudulent money managers, and outlandish compensation models. Turn off the TV, and everybody else faults the media for fear mongering.
Let me pin the tail on the person you would least likely expect to be the fall guy. My modest proposal? Let's blame it all on Warren Buffett.
Say it ain't so, WB
Berkshire Hathaway's (NYSE: BRK-A) (NYSE: BRK-B) charismatic leader has no problem absorbing criticism. He's humble. He's endearing. He's so easy to root for.
However, he's also not perfect. As an investor, Buffett is coming off his worst performance -- in absolute terms -- during his 44 years at the helm of Berkshire Hathaway. Sure, he beat the market, but only because he bled less.
He owns up to his mistakes. In discussing his unfortunate decision to buy into ConocoPhillips (NYSE: COP) when he did, Buffett concedes that "the terrible timing of my purchase has cost Berkshire several billion dollars" in his latest annual shareholder letter.
It's more than that, though. Berkshire Hathaway's book value fell by 9.6% in 2008. There are 14 stocks in which Berkshire Hathaway has stakes worth at least $500 million, but positions that make up less than 20% of the respective companies. Half of those closed out the year worth less than the amount of money that Buffett has put in. If Buffett can't win in this market, and he's arguably the greatest investor of our generation, how do we stand a chance?
Curses to you, Buffett. Your mortality is a sharp pin, piercing the poorly inflated balloon we call confidence.
Calling bottom moves your name to the top
The Oracle of Omaha isn't perfect. No one is. However, his actions in September and October of last year may be interpreted as either signs of calling a market bottom or igniting premature optimism. He did a lot of things at the time: