Thread by @shreeni

Yet another "next Warren Buffett" bit the dust last week. This is a thread about how Warren Buffett is truly unique and media's obsession over trying to find his next incarnation.

#investing #WarrenBuffett #nonextwarren

There is a long list of people media has called the next Warren Buffett. In the past Eddie Lampert, J. Michael Pearson, Bill Ackman and Seth Klarman have been labelled thus.

However, the recent ones (>2021) have been most egregious.

1/ Cathie Wood earned that title - ca.finance.yahoo.com/news/cathie-wo… - as a cursory glance at ARK funds would tell you, she was a single-themed investor who got a massive one-time tailwind in post-covid QE. Neither her investments not her ETF can find a place to hide at the moment.

2/ Chamath Palihapitiya, bloomberg.com/news/articles/… - who was mostly just peddling middling cash-burning companies to naive investors and made a quick buck while his counter parties crashed and burnt.

3/ Sam Bankman-Fried was called the next Warren Buffett, as late as August this year, only for his entire empire to file for bankruptcy in less than a few short months. fortune.com/2022/08/01/ftx…

Warren Buffett is rich, largely self-made, made money only by managing money & no other skills (unlike entrepreneurs & inventors) & has managed to create a lasting legacy of compounding money over a very long period of time (> 60 years at the moment). Very admirable qualities.

It is but natural then for media to search for the next Buffett. After all, if he was one in a million, then wouldn't you want to take credit for calling out the next one-in-a-million success story?

However, media has largely been disingenuous in its attempt - just backing up the last person to achieve some mediocre level of "get-rich-quick" success.

Warren isn't great just because he has a great performance and that consequently he is rich.

Warren is great because he has done it
1. in a public company benefitting common investors without siphoning off 2 & 20
2. without taking any leverage
3. by educating people on the simple approach he takes
4. being incredibly resilient to various changes in the world

The problem I have with the next Warren Buffetts media loves to anoint, none of them come anywhere close to the Buffett's approach.

Cathie Wood was a single-theme investor whose lack of diversity is a direct contributor to her funds' lack of resilience. Chamath was just benefitting by selling others snake oil. SBF was using massive leverage to collect pennies in front of a road-roller.

Given 2 & 20 has become the norm among fund managers, and almost no listed company CEO wanting to go down the route of being a holding company, the chances of us seeing another Warren Buffett is similar form is next to none.

The next great investor we admire (and I am sure there are a few already around) is very likely going to be different and hence would be gaining their name on their own, in their own ilk. That's fine. No need to rush to label anyone as the next Warren Buffett.