During the crisis, Buffett faced strong criticism for selling puts on stock indices[Link], writing an op-ed calling a buy on the market in Oct 2008[Link] and his purchase of Goldman preferreds. Critics said he lost his touch[ Has Warren Buffett Lost His Touch?]. They were all wrong. Buffett was right, right and right. Those big bets will give him the best quarter ever in at least 2 years.
'[Buffett] has a different view. He has to give returns to his investors year by year. We don't have to. We have to think in terms of the next 10, 20, 30 years. We are buying into something which we intend to keep for the next two, three decades and grow with them.'
- MM Lee
MM Lee got it wrong. Buffett's time horizon is actually forever - whatever he buys, he has the intention to keep them for as long as possible. What Buffett has to do is meet his shareholders ,20,000 of them face to face, every year at the Berkshire annual meeting and answer every single legitimate question they have which is something GIC does not do for its shareholders. Buffett publicly admits all his mistakes and take responsibility for them which is another thing the GIC has never done. All his investment moves are disclosed and that has never hurt his performance while GIC keeps many secrets claiming they will be disadvantaged if people knew what they have been doing. Berkshire is managed by a small group of people no more than the number for fingers you have on your hand while GIC has a staff size of 1000 and Temasek employs 300 people to give us sub-prime performance.
Berkshire May Post ‘Blockbuster’ Results by Buffett’s Measure
By Erik Holm
Aug. 6 (Bloomberg) -- Berkshire Hathaway Inc., with a stock portfolio valued at more than $60 billion, may report its best quarter in at least two years using the metric preferred by the firm’s billionaire chairman, Warren Buffett.
About $11 billion in gains in Berkshire’s stocks and a recovery of derivative bets tied to equity markets caused book value, a measure of assets minus liabilities, to reverse after two quarters of declines, according to analysts and investors including Glenn Tongue at T2 Partners LLC. Berkshire is set to report second-quarter results tomorrow.
“It’s going to be a blockbuster,” said Tongue, whose New York-based firm’s largest holding is Berkshire shares. “It may well be the greatest dollar gain in book value in any quarter in the history of the company. Warren Buffett showed extraordinary discipline in the first quarter when all others were losing their heads.”
Buffett, one of the world’s most celebrated stock pickers, this year confessed to investing mistakes that hurt returns over the prior 12 months. Berkshire’s book value per share, the measure highlighted by Buffett in the first sentence of his annual letter to shareholders, has declined in four of the past five quarters, and 2008 marked only the second time since Buffett took over in 1965 that it dropped for a full year.
In his “owner’s manual” for Berkshire shareholders, Buffett says he considers the figure to be an objective substitute for the best measure of the Omaha, Nebraska-based firm’s success: a metric he calls intrinsic value.