Why The Founder Of Stansberry Research Thinks Warren Buffett Has Lost His Touch

The founder of Stanberry Research, Porter Stansberry, wrote an article in early March 2018 about a huge problem that Berkshire Hathaway has which has remained hidden until now. He starts out by saying that Warren Buffett’s investing savvy has turned his company Berkshire Hathaway into a company that has made a lot of people a whole lot of money over the years. Buffett is also really good at PR. However, Stansberry wrote that he is really mismanaging his company of late. As for Porter Stansberry himself, he founded his company in 1999. It has numerous publications designed to enlighten investors regardless of investing in stocks, bonds, precious metals, timber, oil, or other alternative assets. Stansberry Research is based in Maryland and has satellite offices in Florida, California, and Oregon (https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=108542404).

As an independent firm, Stansberry Research isn’t beholden to anyone when reporting their opinions, like Porter Stansberry taking aim at Warren Buffett’s management. He edits is his own publication, Stansberry’ Investment Advisory, and has many other editors working at his company who have their own publications which go out on a monthly or bi-monthly schedule. That’s why Stansberry feels free to say that at Berkshire Hathaway much of what made it great in the past is gone. Its strategies aren’t nearly as good as they were years ago, their structure is a mess, and the brilliance seems to be missing. He thinks that Warren Buffet’s company will eventually be broken up with the parts sold off to the highest bidders.

Stansberry wrote that Warren Buffett used to use a strategy of getting access to massive quantities of capital. The way he did this was by buying property & casualty insurance firms with National Indemnity being the first. He could use these firm’s floats (money saved for potential claims) to buy other companies. However, in 2003 Buffett stopped following this strategy and now Berkshire Hathaway doesn’t have the access to capital it once did. Porter Stansberry covers more of this in his article for his subscribers. His company has over 500,000 subscribers around the world and can provide information to investors regardless of what asset they are considering.

 

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