Warren Buffet’s $3 Billion Profit Sham

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Warren Buffett’s investment firm, Berkshire Hathaway, reports a profit of $3.3 Billion for the months of April through June 2009. That so called “profit” is actually the result of U.S. government bailouts of every company that Buffett had invested in. Without the government bailouts Buffett would be bankrupt today.


But the aura of business acumen survives as the media continues to promote Buffett as the epitome of brilliant investment management. In fact, Buffett has lobbied heavily for bailouts for the companies he invested in and were it not for those government handouts Buffett would be as broke as Bernie Madoff, and maybe about as popular.

Buffett has continuously touted his skill at evaluating business management as the reason for his success. Some management. Some skill. As the market toppled and the economy surged to its lowest level since the Great Depression, Buffett scurried around lobbying everyone he could find to bailout the companies he had invested in, and only those companies.


The fact is that Buffett sought high performance and turned a blind-eye to the risk involved. When the derivatives market nose-dived, every one of Buffetts investments nose-dived too. Buffett was in a panic. How could he possibly fail now when he was at the peak of his investment prowess?

Simple. Buffett never fully understood how those derivates worked, what they were actually based on, whether there were any tangible assets to substantiate their value, how the leverage involved could totally wipe -out his investment capital in a heartbeat.

Undeterred, and to prove himself to be the shrewdest investor ever, Buffett sunk all of his investors money into the riskiest investment possible without the slightest idea of the extent of the risk involved. Some management. Some skill.


Buffett has previously proved to all that he is not the icon of American investment management with the Coca-Cola charade years ago. That cost his investors $1 Billion, but how soon we forget and how soon the media put him back on a pedestal.

Investing your money with Buffett is tantamount to investing with the used-car dealer down the street, and about as risky.


If there is one thing that we should learn from this economic disaster it is that the corporate brand names and the icons of industry are nothing more than hype. When the ship is sinking the rats are running for their lives.

Were it not for the government using taxpayer’s money to save Buffett the headlines would likely read; “Buffett & Madoff: Cut From The Same Cloth.”
　

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