The Dumbest Thing Warren Ever Did With Berkshire’s Money
Inside today’s Daily Journal…
Essay: Exactly How Buffett Was Wrong About Oil
Tech high concentration of the market
High-valued tech companies report earnings tonight
Trump digs in… oil price rises
Chart Of The Day… Nvidia
Today’s Mailbag
Editor’s note: On May 16, 2025, Porter released The Better Than Berkshire Index, designed to show Complete Investor subscribers that they can outperform Warren Buffett’s Berkshire Hathaway. Starting with Monday’s Daily Journal and over the next two weeks, using the insights he has learned from Buffett himself over the decades, Porter will explain exactly what’s gone wrong with Berkshire and how investors can build a portfolio that can do better…
The Berkshire Hathaway annual shareholders meeting is this weekend.
And since no one at the meeting is going to ask any intelligent questions (everyone is there to slurp Warren Buffett in public), I thought I’d offer you more insight into what journalists and shareholders should be asking The Chairman.
On Monday, I shared some insights into how badly Berkshire’s core insurance business (GEICO) was performing compared to its peers (Progressive). But today (and tomorrow) I want to discuss a much bigger problem, a problem that could easily lead to total capital losses in excess of $100 billion – losses that, even for Berkshire, would threaten the financial stability of the entire enterprise.
The media never tells the truth about Buffett or the late Berkshire vice chair Charlie Munger. They are the only two people in finance who have a better reputation than squirrels. (Squirrels are just rats with good PR.) And here’s something every investor in Berkshire ought to know: Warren Buffett and Charlie Munger believed in Peak Oil.
In the early 2000s, the two main heads of Berkshire Hathaway believed that global crude oil production had peaked, or was about to peak, and that the long-run trajectory of oil prices was up and to the right indefinitely. They said so, on the record, in interviews and at shareholder meetings for at least a decade. Their largest oil-equity investment of the period – the $7 billion ConocoPhillips (COP) position acquired in 2008 – was made on this thesis, at the all-time-high oil price, and was disclosed by Buffett himself, the following February, as a major mistake.
Their Peak Oil conclusion was not a passing impression. It was their operating worldview, and it animated Berkshire Hathaway’s energy strategy from approximately 2000 through the middle of the following decade. In June 2008, with West Texas Intermediate crude trading near $140 per barrel, Buffett appeared on CNBC and was asked why oil prices were running so hot.
He answered:
