Buffett Predicts the Tech Bust in 1999
At the Allen & Co. conference in Sun Valley, Idaho in 1999 (Schroeder, 15-21), Warren Buffett explained - to derision from the tech CEOs in the room - that he didn't think that much of the tech boom. They listened politely, but weren't buying. Buffett talked about the fact that the market was at 874 in 1964 and at 875 in 1981, the decline of horses ("I wish I'd shorted horses"), the fact that the airplane didn't make any investor rich, oil prospecting, the apparent over-valuation of internet stocks, Edgar Lawrence Smith's 1929 view that stocks always yielded more than bonds, and more. No one could really refute what Buffett said, but not many agreed with him. Schroeder's book has attracted a lot of interest in the press. If you want, you could read all 830 pages, or you could just read the second chapter on the Sun Valley Conference. It all boils down to the fact that Buffett really wanted to succeed at making money, that he continually learned all he could about investing, that his family life was different but successful in the end if you squint a little bit, that he was a contrarian investor at the right times, that he looked, early on, for under-valued stand alone companies to buy, and later on for bigger companies with special plays. Ultimately, as folks started to mimic his style, he found it harder and harder to invest the hoards he earned and was entrusted. For me, the best part of the story is understanding the joy Buffett finds in learning about companies and investing for profits. He's given away most of his money, so clearly he about more than money. He needs people, family - and investing.
Reference
Schroeder, Alice. The Snowball. Warren Buffett and the Business of Life. Bantam Books. 2008.