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February 2021 Market Commentary: 'Who Listens To Warren Buffett Anymore?'

Mar. 03, 2021 1:55 PM ETiShares MSCI ACWI ETF (ACWI)5 Comments


  • February’s market advance followed a similar pattern to that of January: the first half of the month saw strong performance in momentum favorites only to sharply reverse at month end.
  • Global equity markets continued their advance throughout most of February due to continued optimism over vaccination efforts that will help the world move past COVID as well as high expectations.
  • U.S. small caps continued their strong run from January with the S&P 600 Index returning 7.7% versus 2.8% for the S&P 500.
  • Investment grade fixed income posted a loss for the month as interest rates rose in anticipation of higher inflation and a large deficit-financed federal spending package.
  • World central banks would like to see a return to normalcy via higher interest rates and inflation expectations but not for these expectations to get out of control resulting in tightening financial conditions that would then present deflationary risks.

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Data Source: Bloomberg

‘Who Listens to Warren Anymore?’

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Source: pxhere.com

"Nobody's going to listen to Buffett. Buffett doesn't have the energy to say what he said 30 and 40 years ago in 2021. And that's OK, he's basically earned the right to chill out and be the GOAT, but there have to be some other folks that take that mantle, take the baton and do it as well to this younger generation in the language they understand." - Chamath Palihapitiya, founder Social Capital, Bloomberg 2/14/2021

Credit to former Facebook executive and now billionaire Chamath Palihapitiya for making such a bold statement on famed investor Warren Buffett, Chairperson of Berkshire Hathaway. Whether history proves him prescient or Irving Fisher-esque (“stocks have reached a permanently high plateau” right before the 1929 market crash), there is no mistaking that Mr. Palihapitiya has planted a marker that clearly distinguishes one style of investing (valuations based on fundamentals) versus another (narratives matter more than fundamentals: digital assets and technology are the future). Apparently, Warren Buffett is about as relevant to today’s investor as an 80s Walkman is relevant to today’s music listener.

Although somewhat hubristic on the surface, Mr. Palihapitiya’s comments concerning Mr. Buffett harbor some grains of truth (although we doubt the observations of Mr. Buffett’s energy are correct). Mr. Buffett may be the greatest of all time (“GOAT”), but at least so far, no one of major media significance has adopted the leadership mantle for fundamental, valuation-based investing. Nor has Mr. Buffett elevated a successor nor communicated a succession plan to serve as the leading voice for this style of investing, increasingly viewed as outmoded and outdated in the age of technology growth stocks and cryptocurrencies. Alas, such is the challenge of cult-of-personalities; rarely do they survive the passing of the personality.

So, should

This article was written by

Benjamin M. Lavine, Co-Chief Investment Officer at 3D/L Capital Management, is an investment professional with 20 years of experience in asset management and institutional consulting. Ben brings a versatile investment background and knowledge set having served as a portfolio manager on the developed markets equity team at Batterymarch Financial Management and as a vice president in the Funds Management Division at Wilshire Associates. Ben brings expertise in the following areas: Global Quantitative Equity Research and Management, Macro Investment Strategy, Institutional Product Management and Development, and Institutional Consulting and Public Markets Fund-of-Funds Ben received his MBA from UCLA’s Anderson School of Management, holds the CFA designation, and has experience working on data platforms including Bloomberg, Factset, MATLAB, Orion Technologies, and Thomson/Reuters.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

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Comments (5)

ericgamliel profile picture
I like your analysis style.
Benjamin Lavine, CFA profile picture
@ericgamliel Thank you for the feedback
I guess they might say “This time it’s different.”
I've heard people like Mr. Palihapitiya and Cathie Wood before, notably in 1999-2000 . They've had some success but they don't have the deep understanding of markets and market history like Buffett does. 3 years from now their names will be forgotten as they flamed out along with the wave they rode. Every generation produces people like this who were aligned with the speculative zeitgeist but who disappear when reality re-emerges.
@Allyn Young This guy gets it. 100% behind you. ARK funds are a crowded theater with a small exit door.
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