TIP443: BUFFETT’S BIGGEST BLUNDERS

W/ DAVID KASS

28 April 2022

On today’s show, Trey Lockerbie chats with Dr. David Kass, who is a Ph.D. economist and professor at the University of Maryland. Prior to joining the faculty of the Smith School in 2004, he held senior positions with the Federal Government (Federal Trade Commission, General Accounting Office, Department of Defense, and the Bureau of Economic Analysis). His blog on Warren Buffett has gained notoriety from features on Bloomberg, CNBC, and Fox. David is often quoted in the NYT, WSJ, and Washington Post. So, he is the perfect guest for today’s exploration of Buffett’s biggest blunders. David is such a wonderful and gracious guest. He shares his stories of visiting Buffett in Omaha with his students and so many other great insights. I really hope you enjoy it as much as I did. Without further ado, here is my conversation with Dr. David Kass.

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IN THIS EPISODE, YOU’LL LEARN:

  • The story of how Buffett bought Berkshire after letting his emotions get the best of him and why it was originally a huge mistake
  • How he could have made hundreds of billions more had he simply invested in insurance
  • His position in Conocophillips that resulted in a loss
  • Why buying Dexter Shoes was, in Buffetts words, the worst purchase he ever made.
  • How he missed out on Google, Amazon and others
  • His overpayment for Precision Castparts
  • And how even through all of that, 1 single dollar invested with Buffett in 1965 would now be worth $3.65 M
  • That And a whole lot more!

TRANSCRIPT

Disclaimer: The transcript that follows has been generated using artificial intelligence. We strive to be as accurate as possible, but minor errors and slightly off timestamps may be present due to platform differences.

Trey Lockerbie (00:03):
On today’s show, we have Dr. David Kass, who is a Ph.D. economist and professor at the University of Maryland. Prior to joining the faculty of the Smith School in 2004, he held senior positions with the federal government, the Federal Trade Commission, General Accounting Office, Department of Defense, and the Bureau of Economic Analysis. His blog on Warren Buffet has gained notoriety from features on Bloomberg, CNBC and Fox and David is often quoted in the New York Times Wall Street Journal and Washington Post. He’s the perfect guest for today’s exploration of Buffet’s biggest blunders.

Trey Lockerbie (00:36):
In this episode we discuss the story of how Buffet bought Berkshire after letting his emotions get the best of him and why it was originally a huge mistake, how he could have made hundreds of billions of dollars more had he simply just invested in insurance. His early position in ConocoPhillips that resulted in a loss, why buying Dexter Shoes was, in Buffet’s words, the worst purchase he ever made. How he missed out on Google, Amazon, and others, his overpayment for Precision Castparts and how even through all of that one single dollar invested with Buffet in 1965 would now be worth $3.6 million.

Trey Lockerbie (01:10):
David is such a wonderful and gracious guest. He shares his stories of visiting Buffet in Omaha with his students and so many other great insights. I really hope you enjoy it as much as I did. So without further ado, here’s my conversation with Dr. David Kass.

Intro (01:30):
You are listening to the Investor’s Podcast, where we study the financial markets and read the books that influence self-made billionaires the most. We keep you informed and prepared for the unexpected.

Trey Lockerbie (01:48):
Welcome to the Investor’s Podcast. I’m your host, Trey Lockerbie and today I’m very pleased to have with me, Dr. David Kass to come on our show and talk about Buffet’s biggest blunders. Welcome to the show, David.

David Kass (02:01):
Well, thank you very much for having me.

Trey Lockerbie (02:04):
You got your Ph.D. in economics and business from Harvard. You went on to do a number of things including working at the DOD for a couple of years. Maybe catch us up on your background and then what eventually led you to study Buffet and writing about him and teaching this class?

David Kass (02:19):
Yes. Be happy too. After receiving my Ph.D. in business and economics, I came to Washington to work for the federal government as a senior economist. And I worked for four different government agencies over many years, the Federal Trade Commission, the General Accounting Office, which is now called the Government Accountability Office, Department of Defense, looking at their healthcare delivery system, and the Bureau of Economic Analysis part of the commerce department. At the FTC, in addition to doing financial analysis on mergers, one of my special fields in graduate school was industrial organization, which basically looks at something called structured conduct performance, competitive nature of industries, and financial analysis. Finance was the second special field. At the FTC I did again, several studies there in those related areas, similarly at the General Accounting Office, DOD, healthcare for a couple of years, and Bureau of Economic Analysis cutting across several areas.

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BOOKS AND RESOURCES

  • David’s Blog on Warren Buffett.
  • Supermoney Book.

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