Warren Buffett is widely considered to be one of if not the most successful investors Wall Street has ever seen. He is currently the third richest person in the world. His net worth is just shy of $73 billion, according to a recent article by Forbes. Despite his successes in the market, Buffett still has his detractors.
Dan Loeb, a hedge fund manager for Third Point LLC, did not pull punches when speaking about Warren Buffet at the SALT Conference in Las Vegas, Nevada, this week. In fact, he stopped just short of calling the CEO of Berkshire Hathaway a hypocrite.
“I love reading Warren Buffett’s letters. I love contrasting his words with his actions. I love how he criticizes hedge funds yet he really had the first hedge fund. He criticizes activists. He was the first activist. He criticizes financial services companies yet he likes to invest with them.”
According to the Wall Street Journal, Loeb didn’t stop with this. Talking to a number of hedge fund peers, Loeb had a few parting shots about Warren Buffett that drew applause from members of the crowd.
“He thinks we should all pay more taxes, but he loves avoiding them. There’s a disconnect between his wisdom and his [actions].”
Loeb tried to halfway backtrack on his remarks, but it was too little too late. Most news wires blew up almost immediately. Loeb is no stranger to controversy. He has had it out with everyone from George Clooney to Sony CEO Kaz Hirai. However, going after Warren Buffett may be his most bold move, yet.
It should be noted that sour grapes may be the biggest reason for Loeb’s comment about Warren Buffett. In 2007, Warren Buffett made a $1 million bet with hedge fund company Protege Partners that an S&P Index Fund could beat the New York-based companies “five funds of hedge funds” over a 10-year period of time. As of this writing, Warren Buffett’s choice, the Vanguard 500 Index, has beaten Protege Partners fund of funds every year except one.
It should be noted that Loeb accused Buffett of having the first hedge fund in Berkshire Hathaway. Berkshire, like most hedge funds, does invest in other companies. However, the philosophy behind the choosing of companies to invest in can be drastically different between the two.
What do you think? Is Loeb’s attack on Warren Buffett just sour grapes, or do you think that he is right on the mark about the “Wizard of Omaha?” Feel free to let me know below.
[Photo by AP]