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The Chairman
Victor Niederhoffer

01/21/2005
The Sage Bloviates

Warren Buffett, Oracle of Omaha, legendary investor, world's second-richest man, says he sees no way but down for U.S. dollar unless the trade deficit is fixed. Says he's finding it hard to find any stocks to buy. Read the transcript of Buffett's Jan. 19 interview with CNBC-TV.

Will someone tell me why when a man is short the dollar by an admitted $25 billion and has been talking down the U.S. stock market since 1998 circa SP 850, he is not held up to ridicule and cross examination when he talks his book like this? What a commentary on our times that a man could enjoy this degree of prestige and respect and success when he is so ignorant of the subjects he talks about (See Adam Smith and Don Boudreau and Goepfert and Schmetz and Tar on our site for their critique of looking at just the mercantilist blade of scissors of the current account balance and how they predicted qualitatively the recent 5% strengthening, and read Heyne so you won't be an ignoramus like Buffett) and wonder why he is the most respected name on wall street except for Ben Graham.

It is also interesting to speculate why those who are the most adroit at reducing payments to external authorities thru floats, previous losses , and lovely domiciles, are the most vigilant in opposing an elimination of payments at death to external authorities even though the total raised by such Schadenfreude is must less than the deadweight cost involved. Related to this of course is why the chances are 100 to 1 you're a dollar bear if you loathe the recent outcome in the political sphere, and worked hard to preclude same.

George Zachar comments:

Chair asks: "I wonder why he is the most respected name on wall street except for Ben Graham."

The answer lies in Brooklyn.

When I grew up, a couple of miles north and a decade after the Chair, the most popular autumn pastime was sewer-to-sewer football, played with manhole covers as goal lines.

With two or three kids on a side, we'd "go to the blue Pontiac and buttonhook", and so on.

Whenever there was a dispute -- interference, exact spot of a reception, etc. etc. -- we'd usually have a "do over." The one exception was this: If someone on a side who would be disadvantaged by a call insisted on a judgment that benefited the other side, that was deemed conclusive.

"YOUR OWN MAN says you were out of bounds," ended the conversation.

Well, the Sage is the press's heroic stereotype of capitalism's "own man".

YOUR OWN MAN says taxes need to go up. YOUR OWN MAN says to keep the estate tax. YOUR OWN MAN says Kerry is better suited to be president. YOUR OWN MAN says the stock market is too high.

So in casual conversation with non-market types, I often spend time countering "But Buffett says...", which is spoken with an echo of the decisive phrase "YOUR OWN MAN."

It's a brilliant rhetorical tactic. How can you argue against someone who is universally thought of as brilliant and (superficially) advocating something that is harmful to him?

In the press's defense (how often do I say that?) they are SO bloody unsophisticated that the rank-and-file writer/editor likely is unaware he's being used thusly.

And lest anyone wise up, even the dimmest journo knows Buffett sits on the board of the Washington Post.

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