Financial advisors were a target of ire at Berkshire Hathaway’s first in-person shareholders’ meeting in three years.
Although the term “financial advisor” seemed to mean broker in their amusing yet biting comments, legendary investors Warren Buffett, 91, and Charlie Munger, 98, were direct in their criticism of Wall Street and its role in speculative investing.
“Wall Street makes money, one way or another, catching the crumbs that fall off the table of capitalism,” Buffett said. “They don’t make money unless people do things, and they get a piece of them. They make a lot more money when people are gambling than when they are investing.”
While noting that the stock market is sometimes investment-oriented, at other times, it’s “almost totally a casino, a gambling parlor, which existed to an extraordinary degree in the last couple of years, encouraged by Wall Street.”
Buffet reserved his harshest assessment for financial advice provided by advisors and their ability (or lack thereof) to time markets and predict winners.
“It’s amazing how hard people make what is a simple game, but of course, if [advisors] told people what a simple game it is, 90% of the income of people speaking would disappear,” he said.
“I hate to use the example, but you can have monkeys throwing darts at the page, and, you know, take away the management fees and everything, I’ll bet on the monkeys,” he added.
Blasting bitcoin
Munger, Berkshire Hathaway’s famous consigliere, took aim at Bitcoin, noting, “When you have your own retirement account, and your friendly advisor suggests that you put all the money into Bitcoin, just say no,” to laughter and applause.
Buffett dodged a question about identifying inflation-protected stocks with an inspiring answer about being the best at something, like a doctor in a small town, which will keep people coming to see you, regardless of market or inflationary environments.
“The best protection against inflation is still your own personal earnings power,” he concluded. “The best investment by far is anything that develops yourself.”
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
