It’s Derby Weekend in Omaha for investing enthusiasts as Warren Buffett, the world’s most famous investor, held his annual meeting for Berkshire Hathaway.
The all-day affair was attended by a record crowd almost as large as the one at Churchill Downs.
But while we’ve come to expect some muddled musings out of Omaha, behind the folderol this year has been some unusually sober talk from the 83-year-old legend, talk that shows even he is surprised by how the last five years have played out for the US economy.
Although the famously enthusiastic capitalist profitably rode to the rescue of Goldman Sachs and Bank of America in the fall of 2008, he is professing grave concerns over the proliferation of financial derivatives in the wake of the Great Recession.
Indeed, Buffett told Forbes in no uncertain terms last week that he fears massive financial “discontinuity” will take place as a result of these opaque and leveraged positions — in other words, another Lehman Monday, or worse.
This is not typical Buffett-speak.
Nor were the Oracle’s comments on the housing market. Despite dozens of interviews in recent years in which he insisted he was very bullish on housing, Buffett is now pulling back, saying that “housing is not that strong yet; I’m surprised by that.” Buffett should know. His Berkshire Hathaway owns some of the biggest housing-related companies in the world, from Benjamin Moore paints to Shaw carpets.
If America’s best-loved capitalist is worried about housing and frightened to death about derivatives, it begs the question: What have we learned from the financial crisis?
What Buffett seems to have learned is that Americans will still be buying ketchup (Berkshire owns 50 percent of Heinz) and that the energy boom in the US and Canada is a boon for his railway holdings.
Buffettistas flock to Omaha for a good time and a good steak. But look behind the happy talk, and it’s not hard to see that the commoner’s capitalist has some real concerns.