The Sweet Sorrow Of Warren Buffett's Parting

It’s poetic that Warren Buffett is now stepping down at Berkshire Hathaway after one of the most extraordinary investing careers in modern history.

I’ll save you the adulation for his investing acumen and commitment to high-quality American companies, as the financial news will be replete with these testimonials for the foreseeable future.

I’ve occasionally tried to shine a slightly different light on Buffett because, in addition to being a savvy investor, he was also a tremendous beneficiary of monetary policy that simply kept markets moving higher over time. But don’t get me wrong: Buffett’s knack for outperforming the overall market undoubtedly solidifies him as legend.

He’s also far more of a shark than most people believe him to be. Some of the stories that get passed around in the financial underworld paint a very different picture of Warren Buffett than the jolly old man happy to sit and laugh with Becky Quick. His patience was unmatched, and his ability to leverage his brand into extraordinarily favorable transactions with companies who desperately needed capital became the best self-fulfilling prophecy investment tool there ever was.

Because Buffett had all the capital and all the brand equity in the world—and because his cheery demeanor belied his ruthless style—companies sought him out not only when they needed capital, but also a vote of confidence.

As I reflect on it now, Buffett was the perfect balance of cutthroat investor and public relations polish. And whether his “never bet against America” shtick was honestly how he felt or not, it was instrumental in driving decades of goodwill toward the American financial system. He was the cornerstone of the list of reasons people globally wanted to invest in American exceptionalism.

Buffett put an investing face to many of the greatest American companies in history. Names like Bank of America, Coca-Cola, McDonald’s, American Express, and Apple all became widely accepted as “blue chips,” with some measure of Warren Buffett’s help, as his image and likeness acted as liaison between major corporations and Main Street investors.

But while many people will spend today celebrating his legendary career and speculating about the future of Berkshire Hathaway, to me the timing really does make it feel like sweet sorrow.

As everybody knows, Berkshire is flush with almost $350 billion in cash. Media has harped on how large its cash position has gotten and everyone has speculated about how and when it said cash may be deployed. Ergo, one way to look at Berkshire today is that the company is waiting to pounce on the next great opportunity. But another way to look at it is that, sadly, there’s nothing worth buying. Buffett’s legacy will not be a couple of major parting investments in America, or in up-and-coming U.S. companies as he has preached, but rather a declaration that there simply isn’t anything out there that deserves his capital right now.

At the same time, a broader debate is raging in the country about whether or not our productive capacity and manufacturing ethos have been stripped from our nation. There’s no more hotly contested topic right now than our nation’s major trade imbalance and our fiscal policy of exporting printed U.S. dollars while importing an unsustainably high quality of life—fueled by a growing debt pile and major fiscal deficits.

The country that helped make Berkshire Hathaway early on was a country rooted in manufacturing and production. Early on, Buffett acquired..