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Is Warren Buffett losing his edge to age? Ken Fisher says Oracle is becoming 'inactive'


When great investors like Warren Buffett get to a certain age, they tend to be inactive in a crisis, says Kenneth Fisher, Founder, Executive Chairman, Co-CIO at Fisher Investments.

Is Warren Buffett losing his edge to age? Ken Fisher says Oracle is becoming 'inactive'
Legendary investor Warren Buffett may have entered a phase, because of his age, where he has become “inactive”, believes Kenneth Fisher, Founder and Chairman of Fisher Investments.
Fisher’s view comes in the backdrop of some puzzling steps taken recently by Buffett’s investment company Berkshire Hathaway, including not stepping up purchases of stocks when they fell to multi-year lows in late March amid the pandemic.
Despite sitting on a record cash pile of $137 billion, Berkshire made net stock purchases of only $1.8 billion – seemingly contrary to the Oracle of Omaha’s famous advice of ‘be greedy when others are fearful’.
But Fisher, who spoke to Ramesh Damani for his CNBC-TV18 show Wizards of Dalal Street, suggested that Buffett’s stance may have been more the outcome of his age than a cautious view on the market.
The billionaire Ken Fisher said he speaks from personal experience as well. He is the son of Phil Fisher, who is ranked alongside Buffett as one of the all-time investing greats, and whose book Common Stocks and Uncommon Profits is considered a financial must-read.
“Because of my father when I was young, I got to meet some great investors. The reality of great investors, in my opinion, including my father, is that when they get to a certain age, they lose their edge,” Fisher said. “I am not suggesting that Warren Buffett has lost his edge but I cannot find a history of people his age that don't become relatively static in a crisis, they just tend to be inactive in a crisis.”
Fisher, however, pointed out that no investor, including Buffett, is, or has to be, right all the time.
“If you are right for 70 percent of the time in the long term, you become a living legend. So you better get used to being wrong a lot because living legends are still wrong 30 percent of the time, whoever you are and that is going to apply to anybody including Warren Buffett,” he said.
Eighty-nine-year-old Buffett, widely considered as the greatest investor ever, is among the world’s richest men with a fortune of nearly $75 billion.
But over the past few years, Berkshire has taken a series of decisions that run counter to his investing principles. For years, Buffett explained his decision to not invest in hot tech stocks such as Apple, saying he does not understand technology – finally eschewing the rule in 2011 by investing in IBM.
Most investors live by his well-proven advice that airline stocks make for bad investments – until Berkshire went on a buying spree over the past few years. The decision had to be unwound in unfortunate circumstances when the coronavirus pandemic hit, with Berkshire selling all its airline stocks and losing billions.
Worse, Berskhire’s decision to keep a high amount of cash in its portfolio – Buffett has always maintained that for him, safety comes first – hurt it over the past several years as stocks racked up record gains.
A long period of underperformance – between February 2009 and February 2020, Berkshire’s Class B shares rose 396 percent, roughly 100 percentage points less than the S&P 500 – has often led to questions of whether Buffett’s investing acumen has blunted with age. (His partner at Berkshire, Charlie Munger, is 96.)
Buffett though continues to claim that he feels fit even as he maintains Berkshire has its succession plan in place. At a recent shareholder meeting, Buffett said that he and Munger “are not going to any place voluntarily, but we probably will go someplace involuntarily before that long.”
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