“I was wrong” were words spoken by Warren Buffett about IBM at the Berkshire shareholder meeting attended by investors, the press, and the ignorant.
Each year people make the pilgrimage to worship the Oracle of Omaha. As with other idols, Buffett can cannot help you, but he can hurt you if you listen to him. There is the Buffett, who says he doesn’t understand technology, and then the other one who buys the former tech icon, IBM.
His reversal on IBM is the latest example why piggybacking on his trades won’t work. Forget that Buffett also deals in the private markets and that time has long passed for his Graham, Dodd, and Fisher strategy to work. Another reason Buffett can’t help you is he often says one thing and then does another.
While equating derivatives with mass destruction, Buffet sold, to the now defunct Lehman Brother, over-the-counter (OTC) equity index option contracts. (You can read more here on page 55). OTC options contracts sold by Buffett where the type of custom derivatives that Big Banks bought and sold before the 2008 financial crisis.
Warren Buffett obviously knows what he’s doing, but you may not. Other than Buffettology, Buffet doesn’t detail his investment approach. So save yourself a trip and follow Dalio or Soros who do share their strategy; then you can only blame yourself if you are wrong.