The year was 1999. An exclusive group of multi-billionaires gathered in Sun Valley, Idaho, just like they do every year.
As usual, no reporters were allowed within miles of their gathering. This was a safe place for the wealthiest Americans to freely share ideas, strategize, and break from the rigors and pressures they faced the other 51 weeks in 1999.
But something was different this year.
People were whispering about one of their most revered members.
“Do you think he’s senile? He is almost 70 [years old], after all.”
“He’s lost his touch. He had a great run for about four decades, but he’s clearly fading into irrelevance.”
“The market has left his returns…and his old-fashioned thinking…in the dust. My high school grandson’s returns are three times higher than his.”
They were talking about Warren Buffett. And they were gloating about their massive wins from the run-up in tech stocks. Newer attendees like Jeff Bezos were celebrated while Buffett was discounted.
Buffett wasn’t ruffled. He knew what he believed, and he wasn’t about to trade decades of expertise and success through value investing principles to join yet another fad.
For Buffett, the issues surrounded the lack of actual value in the tech firms exploding in price. Companies like Amazon, Pets.com, and Webvan were the darlings of the S&P 500, yet, they had little to no profits driving their popularity.
Their popularity can also be called speculation.
Taxi drivers and college students were becoming overnight millionaires. Of course, many investment titans like Buffett were discarded as outdated relics of a soon-to-be-forgotten generation.
Time Magazine mocked Buffett that summer. It reportedly stated: “Warren, what went wrong?”
So how did Buffett respond? In his usual dry humor, he addressed the audience of doubters.
Buffett began by saying, “In the short term, the stock market is a voting machine, but in the long run, it is more like a weighing machine. In the end,…