Warren Buffett: Richest Man & Garbage Man

Warren Buffett is the world's richest man according to Forbes. He is estimated to be worth $62 billion. His flagship investment vehicle is Berkshire Hathaway. He has guided Berkshire's investments since the late 1960s. His investment philosophy is simple. Buy well-run disposable branded products that make loyal- repeat- user consumers. Then it's just multiplication of the population that takes over. The premise of the philosophy is at once brilliant and also vulgar.

The investment portfolio of Berkshire feature the likes of Coca-Cola, Anheuser-Buch,Gillette, McDonalds,Dairy Queen, Mars-Sees Candies, Wrigley Chewing Gum, American Express, Wal-Mart, Procter & Gamble etc. The consumer disposables created his wealth but also fostered human obestity and mountains of packaging and manufacturing garbage as a by-product. Most people only talk about the wealth side of the equation. But on a zero sum planet "wealth" has to come from some other thing that is diminished like water, clean environments, etc.

But things are changing. Now and increasingly in the future successful inventors and investors will have a guiding philosophy that first asks the question, " How much garbage will my product produce?" and secondly ask "How much will my product improve what nature offers perfectly?"

Hedge Funds & Private Equity: Bite-size Poison

Today "The Wall Street Journal" carried an article titled, " Investors Riding The 'Cash' Rapids". The point of the article was that this time it's different, risk has finally become manageable to the point of being a financial non-event. Why? Because the new template used by fund mangers utilizes the securitization of debt tthat supports investments. So defaults become affordable. The debt is made into bite-sized portions that can be eaten by financial appetites of all sizes. So if the worst happens in an investment, the effects are muffled because of the broadness of the participants.

That's novel. So financial poison is less lethal if more is distributed in smaller doses. But what about the half-life of financial poison? Doesn't it build up in the financial body until a critical mass of poison kills the polluted financial system? Caveat emptor.