It’s a rhetorical question.
In his highly anticipated annual letter to shareholders of Berkshire Hathaway, the legendary investor Warren Buffett said the following, clearly accepting blame for the lacklustre performance of his investment firm:
“During 2008 I did some dumb things in investments,… I made some errors of omission, sucking my thumb when new facts came in that should have caused me to re-examine my thinking and promptly take action.”
The book value of his firm – i.e. assets minus liabilities – fell to US$109.27 billion at end 2008 from a high of US$120.73 billion at the end of 2007. This is a decline of US$11.5 billion, or a 9.5% decline.
Compare Berkshire’s losses with those of Singapore’s sovereign wealth funds. Temasek Holdings lost S$58 billion or 31%, while GIC reportedly lost S$50 billion.
Yes – total losses amounting to more than S$100 billion.
Ho Ching has stepped down as Temasek’s CEO, but said she has “no regrets”.
In fact, I don’t remember anyone taking blame for the huge investment losses of our national reserves.
Just a week ago, PM Lee said:
“Some years it will go down, some years it will go up more. But on average it’s not bad. And we have to take a long-term view because this is not money for now, this is money for many years ahead. If you look at a long-term basis, on the overall, on the way the government has managed the money, we haven’t done badly.”
Maybe I shouldn’t ask if Temasek Holdings and GIC would do a Warren Buffett. Instead, I think Mr Buffett should not be too quick in accepting blame.
Mr Buffett, it’s only paper losses. Some years it will go down, some years it will go up more. It’s not your fault.