Investors have put their faith not in a fact but in a concept. As my friend John Mauldin puts it, “Faith in central banks today is equivalent to faith in the word dot-com in 1999 or faith in the eternal rise of housing prices in 2006.” No doubt, Warren Buffett was right that “a pack of lemmings looks like a group of individualists compared to Wall Street once it gets a concept in its teeth.” But QE is also a concept that is rather fully played out, especially with a likely tapering ahead. Notably, the shift toward tapering is not driven by substantial economic improvement or victory of the policy, but rather by an increasing recognition within the Fed itself that its actions are creating dangerous financial distortions.
Hundreds of Video Interviews with Klarman, Buffett, and new Fund Managers through the Manual of Ideas. For more videos click on the manual of ideas link at the top of the page in the link below:
There are hundreds of short videos on value investors. If you find any that are particularly enlightening, interesting, or helpful, let me know so others can see it.