Wednesday, 6 October 2010

Warren Buffett can't imagine anyone having bonds in their portfolio when they can own equities

How much my life has changed, and yet how unchanged it has remained at bottom! When I think back and recall the time when I was still a member of the canine community, sharing in all its preoccupations, a dog among dogs, I find on closer examination that from the very beginning I sensed some discrepancy, some little maladjustment, causing a slight feeling of discomfort which not even the most decorous public functions could eliminate; more, that sometimes, no, not sometimes, but very often, the mere look of some fellow dog of my own circle that I was fond of, the mere look of him, as if I had just caught it for the first time, would fill me with hopeless embarrassment and fear, even with despair. I tried to quiet my apprehensions as best I could; friends, to whom I divulged them, helped me; more peaceful times came - times, it is true, in which these sudden surprises were not lacking, but in which they were accepted with more philosophy, fitted into my life with more philosophy, inducing a certain melancholy and lethargy, it may be, but nevertheless allowing me to carry on as a somewhat cold, reserved, shy, and calculating, but all things considered normal enough dog. - Franz Kafka

Well, that's fair enough. If Warren Buffett can't imagine anyone having bonds in their portfolio when they can own equities, I don't think we should hold it against him. It doesn't make him any less of a man. I'm not saying people should have bonds. I wouldn't dictate to anyone. I'm all for freedom of choice. But I am saying it's a good thing to imagine their having bonds. We should try to imagine all possibilities. We shouldn't cut ourselves off from any reality. This isn't a criticism of Mr Buffett. I am sure there are many things he can imagine. I'll bet you anything you like that if we were to ask him to imagine a scarecrow in a field in the English countryside, he could do it. Of course, scarecrows are a common sight in the English countryside. Everyone knows they can be found there. So it wouldn't be much of a test of Mr Buffett's abilities. Unless we asked him to imagine the scarecrow in question coming to life. Oh, imagine that! Would we even dare to imagine asking him to imagine such a thing? Well, why not? I believe we would dare [I just have, myself, can't speak for you, stranger], I believe we would ask him, and I believe Mr Buffett would rise to the challenge. He's not too old to become a visionary and a shaman. There's plenty of life in the old dog yet.

I would like to stress that Warren (I can call him Warren, he is a friend, after all) is not a dog, and has never been a dog. 'There's plenty of life in the old dog yet' is just a phrase. I shouldn't have to explain this to you, dear reader. The visionary imagination is a fine thing, but you can take it too far. Yes, I know I egg you on a lot of the time, but you have to behave in a responsible manner. If a rumour were to start that Warren were actually a dog, it could have an enormous negative impact on Berkshire Hathaway's share price. Let's restrict ourselves to fantasizing about that scarecrow in the English countryside. It's what Warren would want us to do, if he were here with us now. [Come on, Warren, show yourself.] And he would be up for it. I'm sure he would get his teeth into it, this scarecrow. The scarecrow would run for its life, and Warren, on all fours, would chase after it, and catch it, and tear it to shreds. There wouldn't be any blood. Maybe some straw? Oh, there would be straw! Headpiece filled with straw! Torn, scattered. The scarecrow ... crying out in terrible pain, then dying. Imagine it! A short, brutal life. But not a tragedy. We reserve tragedies for our human friends, and for ourselves. I mean, we are human, aren't we? We are not gods, yet. Maybe Warren Buffett would be better off as a dog.