Buffett

Well, since the annual Berkshire Hathaway Chairman's letter came out on Saturday, it's time for everybody and his brother to comment on Warren Buffett. I've been thinking about this post for a couple days, but what spurred me to do it was Paul Kedrosky's post here. Paul basically takes the "Buffett is a mess of contradictions" line and runs with it. With all due respect to Paul, I'm not sure that "mess of contradictions" is really true, but I do agree with the title-"The Half-told Story of Warren Buffett" because I think there is MUCH more to the Buffett story than is commonly realized, and more dimensions to the man than commonly admitted.
First, I think it's easy for most Buffett-ologists to slide into either obsequious sycophantism or thinly veiled envy. I'll try not to do either. Buffett is enormously talented but only human, after all. I believe what makes him so unusual is that he is a world class talent in three areas. First is in what he would call "capital allocation"-- he knows both the price and the value of everything, and when p is much less than v, he buys. Second is as a business leader and judge of people. These two areas overlap a little, but are largely different skillsets. It is unusual to have a CEO who is merely good in both areas, let alone world class. Third, most underappreciated and in my view most important is as a salesman. The dude can sell, and I say that with respect and admiration. As a twentysomething he was able to convince midwestern doctors and lawyers and such to place their hard earned money with him. They were of course richly rewarded. Much of the conventional wisdom about Buffett comes from what he has sold to us through his annual letters, his annual meeting q and a, and other public pronouncements. Has he sold us a false picture--absolutely not, just an incomplete one. Has he given the masses bad advice?--no, but maybe he hasn't always done as he says.
Buffett basically started as a hedge fund operator with hefty performance fees and everything. He got out of that game largely because he's running too much money now for the techniques he used then. But, again, that's what makes him singular--how many hedge fund operators wind up successfully managing a $100 billion conglomerate? It would be as if Michael Jordan made it to Cooperstown, instead of stopping in the minors.
I don't pretend to give a comprehensive review of Buffett. There are many on the web that can give a more thorough picture than I have. There are a number of books worth looking into. Personally, I am eager to look at the Altucher book. Above all, I have enormous respect and admiration for the man, and feel there is a lot to learn from watching him and listening to him.
If you haven't yet, check out my use of Buffett's own words in an attempt to value Berkshire Hathaway. Part I is here and the update is here.