- Warren Buffett’s deputy reflected on the stock-market crash of 2020 in a recent interview.
- Ted Weschler blamed the Fed’s swift action for Berkshire Hathaway’s failure to snap up many bargains.
- Weschler underscored the value of reading widely, and the varied nature of investing.
Ted Weschler, one of Warren Buffett’s two portfolio managers at Berkshire Hathaway, reflected on the stock-market crash in March 2020 during a recent episode of the “I Am Home” podcast from Nebraska Furniture Mart.
Weschler, who joined Berkshire in 2012 after winning Buffett’s charity-lunch auction two years in a row, also underlined the value of reading widely, and trumpeted the varied nature of his job.
Buffett’s deputy is best known for snowballing his retirement account from $70,000 into $264 million, and he may have paved the way for Buffett’s phenomenal Apple investment.
Here are Weschler’s 12 best quotes from the interview, lightly edited for length and clarity:
1. “Here’s a guy who really was a hero of mine from an investing standpoint from 1979.” (Weschler said he began studying Warren Buffett as a college student.)
2. “He was the grey-haired guy with gravitas, and I was the maniac in the backroom who knew the tax code and knew how to use a computer.” (Weschler was discussing the private-equity firm he started with a colleague from WR Grace.)
3. “One of the great mistakes of investing is that people do end up reading the same thing. The only way you’re going to have success in the stock market is if you’ve got what’s referred to as a variant perception, something that’s different from the masses.”
4. “I always do want to be able to look myself in the mirror and say that I’m reading enough weird stuff that nobody else is reading the same stuff that I am. If you’re just reading The New York Times and The Wall Street Journal, there’s no way you’re going to beat other people — you’re just reading the same thing.”
5. “I read Furniture Today and Uranium Weekly. I’m not sure there’s a lot of people that subscribe to both of those; you’re looking at one of them.”
6. “If I can come up with one decent investment idea a year, boy that is great. I call it a game of ‘connect the dots’, where you want to build up a terrific dataset. Maybe you’ll be able to say, ‘Ooh, I read this here, I read this here, and this here,’ and make a connection, such that you’ve got a slightly different perception of where a business is going to be in five years from now than where the market does.”
7. “It was a tough one from an investing standpoint, because all of us looked at each other and were like, ‘Wow, just have not seen anything like this, not sure how this is going to play out.’ We were sitting there over quarter-pounders with cheese, saying, ‘What do we think?’ and it was like ‘Jeez.just don’t know.’ We had a lot of very good information, but we didn’t have a relative edge.” (Weschler was underscoring how the pandemic initially stumped Buffett, him, and his fellow investment manager, Todd Combs.)
8. “It was brilliant work on the part of the Fed and Jay Powell in fixing everything. But the Fed effectively put a floor under everything, and the moment they did that, the opportunities that would have been there for Berkshire, they weren’ you there anymore.”
9. “Historically, the best times for Berkshire have been when there were difficulties out there. Our view was the banking system was going to effectively shut down, and there wasn’t going to be lending available for institutions. But in actual fact there was plenty of money available. The Fed came and said, ‘Open the vault, whatever you need,’ and even Berkshire can’t compete with that.” (Weschler was explaining why Berkshire struggled to find bargains after the pandemic tanked markets in the spring of 2020.)
10. “The tragedy in Russia, Ukraine — that really did rattle the markets. That’s the sort of thing that we’re in a better position to assess, because there have been similar things that have happened in the last 125 years. You can say, ‘How does this play out?’ and ‘What are the probability-adjusted outcomes you could have?'”
11. “I just find the investing business so interesting. If you’re intellectually curious — and that’s really a common element among Warren, myself, and Todd — there’s nothing better. If you’re studying the
in the morning, and you say, ‘Jeez, okay, I’ve had enough of this’ — well then, you can study the home furnishings business, and then go back to uranium in the evening. It’s just fun, and the fact that things are changing means there’s always going to be new things out there.”
12. “There’s something about bringing tens of thousands of people together. Just like at a wedding, where you know that you’re somehow connected to the bride or groom, you’re somehow connected to Berkshire.” (He was explaining why he enjoys Berkshire’s annual shareholder meeting.)
Readmore: Insider interviewed the CEOs of See’s Candies, dairy queen, Borsheimsand Brooks Running during Berkshire Hathaway’s annual meeting. They offered to look inside Warren Buffett’s company, and shared how they’re dealing with the pandemic and inflation.