Editor’s blog: What to make of Warren Buffett?

It’s hard to know what to make of Warren Buffet. He is deeply weird. And last night’s BBC documentary presented by Evan Davis made the old boy from Omaha appear even odder. For a man who is the second richest in the world, his genuine folksiness is quite bizarre: he lives in the same modest house he bought decades back, he loves burgers, steaks and cherry coke, shunning vegetables. He swears that Dale Carnegie’s gruesome ‘How to win friends…’ changed his life. He answers his own phone but doesn’t have a Bloomberg terminal or even a mobile phone.

The temptation at the moment is to contrast what Buffet does with the activities of all those evil investment bakers. Buffett goes for ‘long term value’ by investing in real companies that produce real goods and services (even if, like Coca Cola, you could argue that they rot kids’ teeth and make people fat). Investment bankers are mere frenetic gamblers fiddling, like Faustus, with dangerous arcane financial devices of no social use whatsoever. He creates, they just churn. He’s the acceptable old style face of capitalism – in for the long term – whereas they are the vampire squids of unacceptability, ready to suck on anything they can get their fangs into for ten minutes. And we love him because he got Goldman Sachs by the short and curlies, when they badly needed $5 billion he had kicking around as loose change.

This is all very well, but the truth is the business and financial world has moved on since Buffett’s visionary days. He’s also apparently not averse to the odd punt on derivatives. And he picks the odd bummer, getting into oil at the top of the market last year and even taking a very unwise punt on a pair of Irish banks. So he may be conservative but he isn’t infallible.

There is another potential criticism of Buffett. He’s famously averse to backing innovation – anything that is a start-up with no proven track record. He prefers mature business that have shown they are viable but where he detects oodles of steady, long term value. You could argue that having the stomach to back creativity and get behind new ideas is vital to capitalism’s survival. It’s also very hard to do because winners are tough to pick.

One thing it’s hard to fault him on is his philanthropy. He refuses steadfastly to indulge his kids, who will get nothing when he passes. (His daughter Susie explained how she asked for an extension to her kitchen so she could fit a table for two in it. He refused. This strikes me as plain unreasonable and mean. At his worst he can come over as a crusty old bore, even if he does utter the odd memorable witticism.)

He’s terrible at spending money and is going to leave the lot to Bill Gates’ charitable foundation. But Buffett dislikes the vanity of having his name on anything. As he himself has said: ‘I don’t have a problem with guilt about money. The way I see it is that my money represents an enormous number of claim checks on society. It’s like I have these little pieces of paper that I can turn into consumption. If I wanted to, I could hire 10,000 people to do nothing but paint my picture every day for the rest of my life. And the GDP would go up. But the utility of the product would be zilch, and I would be keeping those 10,000 people from doing AIDS research, or teaching, or nursing. I don’t do that though. I don’t use very many of those claim checks. There’s nothing material I want very much. And I’m going to give virtually all of those claim checks to charity when I die.’