Are you Warren Buffet?

berkshire_buffetSomeone recently sent me a PDF describing how to invest like Warren Buffett…seriously What The Fu!@. I’m waiting for someone to send me a PDF on how to become the next A-Rod…oh wait just take steroids.

Before you start to mirror his trades remember this simple calculation. Based on the 2008 Forbes billionaire list, Buffett is worth USD 62 billion.  If he loses 99.5% of his wealth he still has enough change to buy an Airbus A380…USD 310 million. Now run that calculation on your networth?

This week Berkshire closed at around USD 73,000 an almost 50% haircut from it’s peak of USD 147,000 and now sits at a 5 1/2 year low.  It was fun to listen to Buffet just several months ago telling people to buy US equities because they were historically cheap. His newsletter came out last week and it looks like he tripped on his own advice and bought some stupid things. Let’s highlight some of the deals from the Oracle of Omaha:

Goldman Sachs – USD 5 billion at USD 115 a share and wait for it…wait for it…gets 10% a year.  Currently GS is at USD 75.65 (down 34%)

GE – USD 3 billion at USD 22.25 a share and gets 10% a year. Currently GE is at USD 7.06 (down 68%)

If you took Buffet’s advice you would be down quite a bit and you wouldn’t be getting the additional 10% kicker that Grandpa Buffet gets. Right now cash is king.

Citi's Vikram Pandit

citi_panditNew York Magazine recently ran an exceptional piece on the back story of Pandit’s rise to the top job at Citi.  In summary, he was smart but didn’t know how to play “the game” throughout his career.  The article is sprinked with anecdotes of how Pandit liked to roll with brown people and they even nicknamed his inner circle the “Indian Mafia.”

I’m still clueless on how Citi valued his hedge fund, Old Lane, at USD 800 million.  Even back then when money was flowing it seemed a bit outrageous.

The smartest move that Pandit made was selling off some assets in India. Back in November 2007, Citi sold one of it’s residential properties in South Bombay for USD 8.5 million. Sadly, that might be the only positive balance sheet move by Pandit.

The billion dollar quote from the article:

…When Pandit was born, an astrologer told his family that “whatever this boy touches will turn to gold.”

ouch…I wonder if that astrologer still has a job?