Forum Archive Index - July 2003

[hugh webber <hugh.webber@clear.net.nz>]

Warren doesn't operate like that. First of all he puts in a terrific 
amount of research over a period of months so he's very unlikely to 
buy a dog. But it has happened very rarely. Take insurance and reinsurance.
However this is where another difference between Warren and us 
ordinary mere mortals comes in.

Warren doesn't believe in diversification, unlike your average dumb 
certified financial planner, and neither does Snoopy, both go for about
half a dozen investments, really good ones, rather than diversifying 
into mediocrity. I buy into even less.

For Warren, as the second richest man on this planet, this means he gets to 
have some control over the levers of power as director, hirer and firer of 
CEO's, deviser and reviser of strategy and tactics. So he doesn't sell out,
he gives the outfit a makeover. I notice he is currently giving the second 
largest
German reinsurer a makeover.

He admitted that he hadn't considered or covered large scale terrorism activity,
but he's now been busy excl such cover or charging heaps for it, there have 
been 
no recent spates of large insurance claims, premiums have gone right up and 
the sharemarket value surges have meant his insurance dogs have now become
 star ballerinas.

Excepting the accident prone ones like AMP, Tower (Boonzaier's Folly) which he
never invested in anyway.

Hence the answer to the question is that Warren doesn't sell out, he takes over 
and rejigs.

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