Warren Buffett: 'I told you so'

Tuesday, 13 March, 2001

Whichever way the herd runs, following Buffett can pay off

Investor Warren Buffett took a pasting for ignoring the 1999 surge in https://bit.ly/1jcwn9y stocks. Now he is enjoying the last laugh, as BBC News Online North America business reporter David Schepp explains.

If investment guru and billionaire Warren Buffett had just one message for investors following the bursting of the internet bubble, it could be: "I told you so."

Mr Buffett, whose moves in the stock market are closely followed by investors, noted in a letter to shareholders of his company, Berkshire Hathaway that technology investors have overstayed the party.

Value is destroyed, not created, by any business that loses money over its lifetime

And, following in the footsteps of US central bank chairman Alan Greenspan, Mr Buffett said that the "irrational exuberance" which invaded stock markets in 1999 and early 2000 has left investors expecting unrealistic returns.

Mr Buffett, who was widely chastised by analysts and in the press last year for failing to cash in on the boom in technology stocks, cited evidence from a Paine Webber-Gallup survey of investors conducted in December 1999.

Dulled into complacency

Participants were asked their opinion about the annual returns investors could expect to realise over the decade ahead.

They answered, on average, rises of 19%, to which Mr Buffett retorted that there were not enough businesses in the country to ensure a return of that magnitude.

The fact is that a bubble market has allowed the creation of bubble companies, entities designed more with an eye to making money off investors rather than for them

Mr Buffett warned that the outsized returns experienced by technology investors during 1998 and 1999 had dulled them into complacency.

"After a heady experience of that kind," he said, "normally sensible people drift into behaviour akin to that of Cinderella at the ball.

"They know that overstaying the festivities... will eventually bring on pumpkins and mice."

'Corporate chain letters'

Mr Buffett noted that investors had been hypnotised by the staggering ascent of tech stocks and ignored everything else, including whether the businesses they were investing in were making money.

Without naming them directly, Mr Buffett aimed some of his harshest comments toward https://bit.ly/1jcwn9ys, those internet-based businesses which issued shares in widely anticipated floats only to shut up shop a few months later.

a fine though unglamorous business, an outstanding manager and a price... that made sense

"Value is destroyed, not created, by any business that loses money over its lifetime," Mr Buffett wrote.

He was referring to the business model all too many dotcoms employed - to enrich investors through rising share prices rather than profits.

"The fact is that a bubble market has allowed the creation of bubble companies, entities designed more with an eye to making money off investors rather than for them."

Unglamorous purchases

Business models for these companies amounted to little more than "the old-fashioned chain letter", he added.

It is advice that could be expected from someone who looks for companies that are undervalued and promise long term profits growth.

Investors need only look at Berkshire's acquisitions in 2000 to get a clear idea of what Mr Buffett & Co view as value stocks.

For example, Berkshire's purchase of MidAmerican Energy, in a year that rewarded energy stocks as gas and oil prices surged in the US, shows why investors envy Mr Buffett's investing prowess.

Berkshire also bought Cort Business Services, which rents furniture to businesses.

Mr Buffett said Cort had all the right ingredients for a purchase: "a fine though unglamorous business, an outstanding manager and a price... that made sense."

Other acquisitions in 2000 included US Liability, an insurance company, boot and bricks maker Justin Industries, carpeting manufacturer Shaw Industries, Benjamin Moore Paint and Johns Manville, an insulation and roofing-products maker.

There was not a technology stock in the bunch.
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Artikel di atas adalah artikel tahun 2001 ketika dotcom bubble pecah.

Sedangkan foto yang ada di postingan ini adalah foto wawancara Buffett di 1999 ketika puncak dotcom bubble.

Di 1998-1999 banyak investor yang mengatakan Buffett bodoh karena tidak mau berpartisipasi di saham teknologi. Namun kemudian bubble pecah di akhir 2000an, yang tertawa paling akhir adalah Buffett.

21 tahun kemudian, Buffett akhirnya masuk saham teknologi di Apple. Tapi Apple di 2020-2021 beda dengan perusahaan teknologi di era dotcom Bubble 2000. Apple adalah cash machine, sedangkan mayoritas perusahaan teknologi di era dotcom bubble sengaja diciptakan untuk merampok duit investor yang memang lagi keranjingan sama perusahaan teknologi. Dari ribuan perusahaan teknologi yang lahir di era dotcom Bubble, yang survive hanya beberapa perusahaan saja. Sebagian besar dari mereka bangkrut lalu hilang dari peredaran. Dalam jangka panjang perusahaan yang mencetak laba yang bertahan hidup.

Sebagai contoh Amazon.
Berdiri 1994.
IPO 1997
Cetak laba pertama kali di Q4 2001 setelah dotcom bubble pecah.
Namun cetak laba full year di 2003.
Itu artinya perusahaan teknologi seperti Amazon butuh waktu untuk cetak laba sekitar 9-10 tahun.

Netflix berdiri 1997
IPO 2002 ketika bubble dotcom sudah pecah
Pertama kali cetak laba 2003.
And the rest is history.
Netflix butuh 6-7 tahun hingga akhirnya mencetak laba.

Tesla berdiri 2003.
IPO 2010
Cetak laba untuk pertama kalinya 2010
Jad Tesla butuh waktu 7-8 tahun untuk cetak laba.

Facebook berdiri 2004
IPO 2012
Facebook sudah cetak laba sejak 2009.
Jadi hanya butuh waktu 5 tahun sebelum akhirnya mereka cetak laba.

Jadi kesamaan perusahaan teknologi di Amerika Serikat adalah perusahaan mereka terus meroket karena mereka bisa mencetak laba. Dalam jangka panjang pada akhirnya profit talks.

Perusahaan Tbk didirikan untuk mencetak laba bukan sebagai lembaga amal.

Kalau melihat saham teknologi di Indonesia, yang mencetak laba baru beberapa saja seperti $EMTK $MTDL $MLPT.
EMTK bahkan sempat merugi dulu karena salah investasi di Blackberry. Tapi setelah cutloss dari Blackberry, EMTK move on ke Grab.

Tinggal kita lihat apakah on the long run, EMTK mampu terus mencetak laba atau tidak. Jika EMTK konsisten cetak laba seperti perusahaan teknologi di AS, maka bukan tidak mungkin EMTK bisa jadi the next big thing.

$MLPL perusahaan teknologi milik Lippo mengambil pathway lewat Gojek.

Manakah yang akan menang?
Gojek vs Grab?
EMTK vs MLPL?

Disclaimer: http://bit.ly/3bLj4Oc