Genius Envy

Many of us—myself included—get irritated when certain other people demonstrate that they are exceptionally gifted, especially in our own fields. Why? Because other people’s accomplishments remind us that we must count ourselves among life’s losers, neither rich nor famous, grievous disappointments to family, to friends, and to ourselves alike.

So we denigrate the truly gifted. A-Rod doesn’t hit in the clutch. Pavarotti had “too much garlic in his voice.” Jane Austen never mentioned the Napoleonic wars. Chopin never wrote any great major works.

And, anent Warren Buffett, we attribute his success to the “float”—the insurance premiums his companies receive, which Buffett has been able to invest as he pleases. Hell, if WE benefited from a float, too, we’d be right up there with Buffett, right? We’d be among the richest people on the planet, palsy-walsy with all sorts of celebrities, dancing to work.

Of course, Buffett could have invested all that money unwisely, too. And it’s not inconceivable that—even without the float from some of his insurance companies—he might have made a ton of money just by choosing to buy good, cheap stocks (or great, somewhat undervalued) stocks.

Do you remember those old stories about how Peter Lynch had just been lucky? Which explained why Fidelity Magellan had been doing so poorly at the time? But didn’t explain why Magellan proceeded to rebound like crazy?]

Of course, a great many well-known investors proceed to fall on their faces—because they WERE just lucky. Or because circumstances changed—they got too much money to invest, their investment style went out of style, whatever. I would rattle off a lot of names, except…that I have forgotten almost all of those nine-day wonders.

Also, of course, even successful people—who you would think would be perfectly secure--denigrate their rivals. Stravinsky, the composer, had unkind words for Maurice Ravel, A-Rod once dumped on Derek Jeter, and soprano Maria Callas said that rival Renata Tebaldi’s voice was “pretty, but who cares?” Mr. Buffett himself, if I remember correctly, has put down Mario Gabelli.

Genius envy has a long and unillustrious history.

Aristides the Just. Remember him? Some Athenian wouldn’t vote for him because he was sick and tired of hearing him called Aristides the Just.

Sam Johnson rarely had a kind word to say about Jonathan Swift. About “Gulliver’s Travels,” he said, “When you have thought of big men and little men, it is very easy to do the rest.” And, I suppose, once you have thought of a son who should avenge his father’s murder but seems strangely hesitant, “Hamlet” is a cinch to write.

There are a lot of reasons why Buffett has been so successful—besides the float. He abides by his rules. He remains within his circle of competence. He looks for a “margin of safety” (a big discount). He looks for good, conscientious managers. He doesn’t gamble. He learns from his mistakes. And so forth.

True, Berkshire is not the wonderful investment it once was. It’s “muscle-bound.” It has much too much money. The clever guys at Fairholme have cut back on their holdings; I myself dumped all my Berkshire a while ago.

But let’s give credit where it’s due. Warren Buffet is one helluva great investor.

Possibly, just possibly, even an even better investor than we are.

Even without that float.

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Warren Boroson is a veteran journalist whose articles have appeared in Money, Consumer Reports, the New York Times Magazine, Reader’s Digest, and elsewhere. He has written over 20 books, including “How to Pick Stocks Like Warren Buffett.” His blog is www.warrenboroson.blogspot.com.

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