Warren Buffett had at least 3 chances to bail out Lehman Brothers before it collapsed. Here’s why he didn’t take them.

warren Buffett
Warren Buffett.

  • Warren Buffett had at least three opportunities to save Lehman Brothers from bankruptcy.
  • The investor analyzed the embattled bank and decided it was too risky to help.
  • Lehman Brothers’ collapse was a key catalyst for the global financial crisis.
  • See more stories on Insider’s business page.

Warren Buffett had at least three chances to bail out Lehman Brothers before the investment bank collapsed in September 2008, fueling the global financial crisis. The billionaire investor and Berkshire Hathaway CEO rejected the first two invitations, and a technology mix-up meant he didn’t get the third one.

Buffett has repeatedly underscored the severity of the situation in the fall of 2008, when investors were pulling billions of dollars out of money-market funds, and credit markets were frozen.

It was “as close to a total meltdown throughout the financial system as you can imagine,” Buffett said at Berkshire’s 2008 shareholder meeting. “We really were looking into the abyss at that time.”

“I describe it as an economic Pearl Harbor,” he told Vice News in 2018, a decade after the financial crisis began.

Lehman CEO Richard Fuld first called Buffett in March 2008 to suggest Berkshire inject several billion dollars into the ailing bank, the investor told CNBC in 2018.

Buffett was open to the idea, and spent a night in his office scouring hundreds of pages of Lehman’s latest financial reports. He jotted down every red flag he spotted, and soon had a lengthy list.

“There was clearly a lot of trouble there,” Buffett told The Wall Street Journal in 2018.

“I just saw a lot of things that made me very worried about their financial condition, and what would be happening to them under the circumstances that were happening on Wall Street,” the investor told CNBC.

Lehman executives tried their luck again in the weeks before the bank’s collapse, Reuters reported. However, Buffett rejected the overture and dismissed the idea of an investment as “unrealistic.”

Barclays’ president at the time, Bob Diamond, called Buffett in September 2008. The British bank was looking to buy Lehman, and he asked Buffett if Berkshire would insure Lehman’s trades until Barclays shareholders could vote on the prospective deal.

Buffett was staying at a hotel at the time, and asked Diamond to fax him the details, he told CNBC. However, the Barclays boss was operating out of the Federal Reserve and couldn’t find a fax machine, so he left Buffett a voicemail instead. The investor didn’t notice, and only heard it the following summer when his daughter spotted it and played it for him.

Regardless, Buffett told CNBC that he couldn’t have offered the sweeping guarantee that Diamond wanted.

“It would have been an unlimited exposure that wouldn’t have made sense,” he said, especially “with the whole world falling apart.”

While Berkshire had the cash to swoop in and save Lehman, Buffett dismissed the idea that doing so would have prevented the financial crisis. “I really don’t think the world would have changed,” he said.

While Buffett said no to Lehman, he noted in his 2010 shareholder letter that Berkshire deployed about $16 billion in the 25 days after the bank filed for bankruptcy on September 15, 2008. For example, it made vital investments in Goldman Sachs, General Electric, and other struggling businesses.

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Warren Buffett’s favorite investment won’t be as appealing if lawmakers pass a 2% tax on stock buybacks

Warren Buffett
Warren Buffett.

  • Warren Buffett’s Berkshire Hathaway spent $31 billion on stock buybacks in the year to June 30.
  • Democratic senators have proposed a 2% tax on share repurchases.
  • Berkshire would have owed $620 million under the buyback tax in the year to June 2021.
  • See more stories on Insider’s business page.

Warren Buffett’s favorite investment over the past year could shoot up in price if US lawmakers succeed in slapping a 2% tax on buybacks.

The famed investor is itching to deploy $80 billion of Berkshire Hathaway‘s cash. However, he has struggled to find bargains with the US stock market at record highs, and private equity firms and special-purpose acquisition vehicles (SPACs) driving up the price of acquisitions.

The lack of compelling investments spurred Buffett to spend a record $31 billion repurchasing Berkshire stock in the 12 months to June 30. Meanwhile, his company sold a net $2.7 billion of equities in the period, and its only major deal was a roughly $8 billion purchase of natural gas infrastructure.

Buffett’s go-to investment could become significantly less attractive if Sen. Sherrod Brown and Sen. Ron Wyden have their way. The two senators are seeking to pass the Stock Buyback Accountability Act, which would impose a 2% excise tax on share repurchases.

The legislators want to encourage corporate executives to invest in their companies and workers instead of using spare cash to reward shareholders. The tax promises to raise more than $100 billion for the federal government over the next decade, a Brown aide told The Wall Street Journal. The funds raised could be spent on healthcare, education, infrastructure, and other public programs.

However, the bill would be a blow to Berkshire and other companies that spend billions of dollars on buybacks annually. All things being equal, if the tax had been rolled out last summer, Buffett’s company would have owed about $620 million on its buybacks during the 12 months to June 2021 – equivalent to 5% of the $12 billion of income tax it paid in 2020.

Buffett has repeatedly trumpeted the value of buybacks for companies that have ample cash and can repurchase their shares at a material discount to their intrinsic value. The investor has noted that sensible buybacks increase shareholders’ ownership of a company by reducing its outstanding shares, help stock sellers get a price, signal that executives are acting in shareholders’ interests, carry less risk than acquisitions, and don’t incur taxes like dividends – at least for now.

Berkshire’s buybacks have already grown more expensive over the past year as its stock price has risen. A tax would make them even less attractive, further limiting Buffett’s spending options.

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Warren Buffett’s Berkshire Hathaway took a $2.4 billion hit from the 9/11 attacks. The investor warned a nuclear assault could have bankrupted his company.

warren buffett
Warren Buffett.

  • Warren Buffett’s Berkshire Hathaway took a major financial hit from the September 11 attacks.
  • The investor’s company stomached $2.4 billion in underwriting losses from the disaster.
  • Berkshire sold a bunch of terrorism insurance after 9/11, but was careful to limit its exposure.
  • See more stories on Insider’s business page.

Warren Buffett’s Berkshire Hathaway recorded a hefty $2.4 billion of underwriting losses from the terrorist attacks on September 11, 2001. However, a nuclear assault could have put the investor’s company out of business entirely, along with its insurance peers.

“Had a nuclear device been available to Osama bin Laden, the loss could have bankrupted most of the industry, Berkshire very much included,” Buffett wrote in a Washington Post editorial in November 2001. He added that the total insured losses could have surpassed $1 trillion, exceeding the combined value of the world’s property-casualty insurers at the time.

Berkshire counts Geico, National Indemnity, and General Reinsurance among its subsidiaries, making it one of the largest insurers in the world. Its underwriting losses from 9/11 dealt a $1.5 billion blow to its net earnings, fueling a sharp decline from $3.3 billion in 2000 to less than $800 million in 2001. Berkshire stomached an estimated 3% to 5% of the global insurance industry’s losses from the incident.

Buffett kicked himself in his letter to Berkshire shareholders in 2001. He knew a major terrorist attack could occur, and was aware of the devastating impact it might have on Berkshire. Yet he failed to adjust the insurance policies his company was writing, which would have softened the blow to its bottom line.

“I violated the Noah rule: Predicting rain doesn’t count; building arks 
does,” he said. The investor added that Berkshire was perfectly willing to pay out upwards of $2 billion following a catastrophe, but in the case of 9/11, it hadn’t charged enough for assuming the risk that led to a loss of that scale.

Berkshire wasn’t cowed by the episode, however. In the months after 9/11, it was one of the few insurers to actively cover terrorism losses. For example, it wrote policies for multiple international airlines, Chicago’s Sears Tower, and a North Sea oil platform, Buffett disclosed in his letter.

“Whatever the world’s problems, our checks will clear,” he proclaimed. Buffett is known for prizing financial security and ensuring Berkshire has ample cash to weather difficult periods.

While Berkshire sold a significant amount of terrorism insurance after 9/11, it limited its coverage of nuclear, chemical, and biological attacks, Buffett noted during his company’s annual shareholder meeting in 2002.

A major nuclear explosion would pose an existential threat to Berkshire, he explained, while a biological attack in a major factory or office building would result in workers’ compensation losses that could “make the World Trade Center loss look like nothing.”

Buffett emphasized that the human cost of a terrorist attack far exceeds the insurance costs, but asserted that Berkshire has to consider whether it can cover claims. If the company collapsed into bankruptcy, it wouldn’t be able to compensate those involved in the disaster, not to mention others who suffered injuries years ago but rely on insurance payouts to live, he said.

Charlie Munger, Buffett’s business partner and Berkshire’s vice-chairman, underscored the tragedy of 9/11, but framed it as an important lesson for the company.

“To the extent that September 11th has caused us to be less weak, foolish, and sloppy, as we plainly were in facing some plain reality, it’s a plus,” he said at the meeting in 2002.

Berkshire’s fallout from 9/11 pales in comparison to the deaths, injuries, and national trauma caused by the attack. But it showed that even careful insurers can be caught off-guard by catastrophes, and taught Buffett and Munger some important lessons.

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Billionaire investor Leon Cooperman warns bitcoin buyers, rings the inflation alarm, and rules out an imminent market crash in a new interview. Here are the 14 best quotes.

Leon Cooperman
Leon Cooperman.

  • Leon Cooperman doesn’t expect a market crash, or recession for another year at least.
  • The billionaire investor sounded the inflation alarm and cautioned against betting on bitcoin.
  • Cooperman called out Robinhood users for boosting meme stocks to heady valuations.
  • See more stories on Insider’s business page.

Billionaire investor Leon Cooperman ruled out an imminent market crash, blasted the Federal Reserve for overstimulating the economy, and warned against holding bitcoin in a CNBC interview this week.

Cooperman, who converted his Omega Advisors hedge fund into a family office in 2018, also rang the inflation alarm, questioned the hype around meme stocks, and bemoaned the tiny yields from bonds and saving accounts.

Here are Cooperman’s 14 best quotes from the interview, lightly edited and condensed for clarity:

1. “Big declines come about because of recession. We’re coming out of a recession, we’re not going into one anytime soon. That’s at least a year away, maybe longer.” – Cooperman listed higher inflation, a falling dollar, and the Fed reducing, or eliminating its economic support as likely catalysts for the next downturn.

2. “The Fed is wrong on inflation. This idea that inflation is transitory is a pipe dream. 65% of business costs are labor. You know anybody working for less money in this environment?”

3. “The Fed has been the handmaiden to this administration. We’re running enormous fiscal deficits and the Fed has been funding it.”

4. “The market structure is broken. There’s no stabilizing forces in the market now, it’s all run by machines. When there’s a real reason for the market to go down, it’ll go down so quickly your head’s gonna spin.”

5. “If you don’t understand bitcoin, it means you’re old. I’m 78, I’m old, I don’t understand it. One thing I do know is it’s not in the interest of the US government to further a substitute for the US dollar.”

6. “I’d be very careful with bitcoin. I don’t think it makes a great deal of sense. If you’re nervous about the world, gold would be a better store of value than bitcoin.”

7. “Most companies are not overvalued against interest rates today. Some things are overpriced, are crazy – I call that the Robinhood market. I hope they know what they’re doing, but I doubt it.”

8. “Negative interest rates are ridiculous. There’s a bunch of academicians running monetary policy around the world. Bonds are totally mispriced. The idea of buying 10-year German bonds and getting less back in 10 years than you invest today – I really don’t get it at all.”

9. “There’s gotta be a return from investing in fixed income. The government’s gotta sell a lot of bonds. What schnook is gonna buy a bond today?”

10. “I’m listening to Fed-speak, I’m looking at inflation, market action, gold, bitcoin, the dollar exchange rate, and interest rates overall. I’m watching a lot of things for a signal to change.” – outlining what he’s monitoring to determine when it’s time to get out of the market.

11. “I’m a perennial optimist. I kind of agree with Warren Buffett. People don’t get rich being short America.”

12. “I don’t like the attack on the wealthy. I’m giving all my money away so I couldn’t care less, but I’m a capitalist with a heart. This constant attacking of wealthy people is very disturbing to me.”

13. “You could take away all the money from the wealthy and still not cover the fiscal problems for the country.”

14. “If you go to your financial planner and ask them what are you gonna earn on your savings, the answer is ‘bupkus.’ You can’t earn any money on your savings, you can’t afford to retire. That reduces the opportunity for the young people entering the labor force. The world has been turned upside down. This has got to change.”

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Warren Buffett’s global market indicator hits a record 142%, signaling stocks are too expensive and could crash

warren buffett newspaper
Warren Buffett.

  • The global version of the “Buffett indicator” has reached a record high of 142%.
  • Warren Buffett’s namesake gauge divides the total market cap of global stocks by worldwide GDP.
  • Buffett said the indicator spiking before the dot-com crash was a “very strong warning signal.”
  • See more stories on Insider’s business page.

Warren Buffett’s favorite market indicator has surged to a record high of 142%, signaling US and international stocks are heavily overpriced and could plummet in the months ahead.

The global version of the “Buffett indicator” takes the combined market capitalization of the world’s publicly traded stocks, and divides it by global GDP. A reading north of 100% indicates the global stock market is overvalued relative to the world economy.

“BOOM! Global stocks have gained another $1.6 trillion in market capitalization this week,” Welt market analyst Holger Zschaepitz tweeted on Sunday. “Equities now worth $120.3 trillion, highest in history.”

“Global stock market cap now equal to 142% of world GDP, an all-time high as well,” he added.

Buffett trumpeted his namesake gauge in a Fortune magazine article in 2001. The billionaire boss of Berkshire Hathaway described it as “probably the best single measure of where valuations stand at any given moment.”

Moreover, Buffett said it should have been a “very strong warning signal” when the yardstick skyrocketed during the dot-com bubble. He added that buying stocks at a reading of 70% or 80% would likely be lucrative, but investors would be “playing with fire” when the ratio approaches 200%.

The US stock market is firmly in “fire” territory with a current Buffett indicator reading of 208%. That figure is well above its 187% reading in the second quarter of 2020, when the pandemic was in full swing and GDP was about 15% lower.

However, the Buffett indicator isn’t flawless. For example, it compares the current value of the stock market to past GDP. Governments around the world have also battled the pandemic by ramping up stimulus and shutting down large parts of their economies over the past 18 months, artificially inflating the yardstick’s readings.

Here’s the global version of the Buffett indicator:

Global Buffett Indicator
The global version of the Buffett indicator.

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Warren Buffett’s Berkshire Hathaway has scored a $2 billion gain on BYD stock this year

warren buffett
Warren Buffett.

  • Warren Buffett’s Berkshire Hathaway has made a $2 billion gain on BYD this year.
  • Berkshire spent $232 million in 2008 for a stake in the automaker worth nearly $8 billion today.
  • The Chinese group’s sales of electric and hybrid vehicles rose by over 300% year-on-year in August.
  • See more stories on Insider’s business page.

Warren Buffett’s Berkshire Hathaway has racked up a $2 billion gain on BYD stock this year, boosting the value of its bet on the Chinese electric-vehicle company to almost $8 billion – a 3,400% gain on its investment in under 13 years.

The famed investor’s company spent $232 million to buy 225 million shares of BYD in 2008. Its stake was worth $5.9 billion at the end of last year, Berkshire’s latest annual report shows. Yet BYD’s stock price has surged by about 23% since then, lifting the value of Berkshire’s roughly 8% stake to $7.9 billion.

BYD’s Hong Kong-listed shares climbed 8% on Monday alone after the automaker revealed its sales of passenger vehicles more than quadrupled year-on-year to 60,500 units in August. It sold a total of 261,000 passenger vehicles in the first eight months of this year – more than triple the 85,000 it sold in the same period of 2020.

The robust sales growth reflected a 125% rise in sales of fully electric vehicles to 149,000 units in the first eight months of this year, along with a 485% increase in sales of plug-in hybrids to 112,000 units. In contrast, BYD’s sales of gas-powered vehicles dropped 22% to 106,000 units during that period.

Buffett’s business partner and Berkshire’s vice-chairman, Charlie Munger, has repeatedly sung BYD’s praises since he first brought the company to Buffett’s attention. For example, he described BYD’s founder and CEO, Wang Chuanfu, as a mixture of inventor Thomas Edison and former GE boss Jack Welch in a Fortune interview in 2009.

Munger has been right about BYD’s prospects so far. The company has grown its revenue by nearly six-fold to the equivalent of $24 billion since Berkshire invested, and more than tripled its net income to around $1 billion.

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Warren Buffett’s deputy explained how he snowballed his retirement account from $70,000 into $264 million, how he shrugs off losses, and how people can save a fortune

Ted Weschler
Ted Weschler.

  • Warren Buffett’s deputy grew his retirement fund from $70,000 to $264 million in less than 30 years.
  • Ted Weschler explained his strategy and shared tips for savers in a recent interview.
  • Weschler revealed how he deals with losses and spoke about his role at Berkshire Hathaway.
  • See more stories on Insider’s business page.

Warren Buffett’s deputy grew his retirement fund from $70,000 to $264 million in under 30 years. He detailed how he did it, revealed the way he shrugs off investment losses, and offered tips on saving for retirement in a recent Washington Post interview.

Ted Weschler, who helps Buffett manage Berkshire Hathaway’s investment portfolio, discussed his approach with Allan Sloan for the writer’s latest column. ProPublica first disclosed the size of Weschler’s nest egg in June, citing federal tax returns it obtained.

“In a perfect world, nobody would know about this account,” Weschler told Sloan in an email, adding that he hoped the revelation would motivate people to start saving and investing early in their careers.

The investor opened his independent retirement account (IRA) in 1984. He was 22 and earning a salary of $22,000 a year as a junior financial analyst at WR Grace, a chemicals company. Maximizing his contributions and capitalizing on a generous employer match, he grew his account to over $70,000 by the end of 1989 – the year he quit his job to start a private equity firm, and transferred his savings into a self-directed IRA under his control.

Weschler went on to launch a hedge fund in 2000, which delivered after-fee, compounded annual returns of 22% for its clients between 2000 and 2011. He joined Berkshire in 2012 after shelling out $5 million to join Buffett for his annual charity lunch in 2010 and 2011.

The investor’s retirement fund ballooned in value by more than 300,000% between 1989 and 2018, despite his IRA shedding 52% of its value in 1990 after two key holdings tanked that year. However, Weschler brushed off the unrealized loss by focusing on learning from it.

“One of my personal investment mantras is that there’s no such thing as a loss, it’s just an unmonetized lesson,” he told Sloan.

Notably, Weschler converted his IRA into a Roth IRA in 2012, paying over $28 million of federal income tax to do so. The switch means he won’t owe any taxes when he cashes out his retirement account.

Buffett’s deputy told Sloan that he’s paid less attention to his nest egg since joining Berkshire, partly because there’s no longer an overlap between the investments he analyzes for work and those he would buy for his account. He now seeks out companies that can absorb at least $500 million without giving Berkshire a stake of 10% or more, implying he focuses on businesses with a market capitalization of over $5 billion.

Echoing Buffett, Weschler underscored to Sloan the value of index funds for people who don’t have the time or interest to study investments closely. He pointed out that if his $70,535 in savings at the end of 1989 had been parked in Vanguard’s S&P 500 index fund, it would be worth about $1.6 million as of June 30 this year – a roughly 23-fold gain.

“That $1.6 million drives some very simple advice: Start early, maximize the (employer) match, invest 100% in equities, and ignore all the other noise,” Weschler said.

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Zoom’s CEO thanks Charlie Munger for embracing Zoom during the pandemic – and offers his personal tech support

Charlie Munger
Charlie Munger.

  • Warren Buffett’s business partner embraced Zoom during the pandemic.
  • Charlie Munger, 97, touted the video-conferencing tool’s convenience and growth prospects.
  • Zoom CEO Eric Yuan thanked Munger this week and offered to provide him with personal tech support.
  • See more stories on Insider’s business page.

Warren Buffett’s 97-year-old business partner, Charlie Munger, surprisingly embraced Zoom during the pandemic. Eric Yuan, the founder and CEO of the video-conferencing platform, celebrated the veteran investor’s endorsement of his product on an earnings call this week.

“I have fallen in love with Zoom,” Munger, the vice-chairman of Berkshire Hathaway, said in a CNBC interview filmed at Berkshire’s annual shareholder meeting in May. “Zoom is here to stay. It just adds so much convenience.”

Munger added that he struck a deal in Australia using the communications tool. He trumpeted its prospects at Daily Journal’s annual meeting in February as well.

“When the pandemic is over, I don’t think we’re going back to just the way things were,” the newspaper publisher’s chairman said. “We’re going to do a lot less travel and a lot more Zooming.”

Yuan thanked Munger for his vote of confidence in a tweet in late June. He tipped his hat again during Zoom’s second-quarter earnings call on Monday, and offered to troubleshoot any issues the investor runs into.

“I’d like to thank Charlie Munger of Berkshire Hathaway for his remarks about how Zoom has added so much convenience to his life,” he said.

“We are so delighted to count Charlie as a happy user,” Yuan continued. “And I nominate myself to be Charlie’s personal Zoom tech support if he ever needs it.”

Yuan may have Munger firmly in his corner, but Buffett is far more skeptical. “I’m just not a Zoom guy,” he told CNBC in May. “I don’t see any plus to it, particularly,” he continued, noting that a computer screen filled with people’s faces added nothing to his experience.

“I’d rather have my feet on the desk, and I find the telephone a very satisfactory instrument,” Buffett added.

Zoom’s stock price has more than quintupled since the start of 2020, fueled by surging demand for video calls and virtual meetings during the pandemic. Its revenue surged 54% year-on-year to over $1 billion last quarter, driving net income up 71% to $317 million.

However, the stock fell as much as 12% in premarket trading on Tuesday after the company forecasted around $1 billion of revenue in both the third and fourth quarters of this year.

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Warren Buffett used Afghanistan to explain the role of luck in his career – and call for higher taxes on the rich

Warren Buffett
Warren Buffett.

  • Warren Buffett has underlined how lucky he is by pointing to Afghanistan.
  • The investor won the “ovarian lottery” by being born in the US, where his skills are rewarded.
  • Buffett has also invoked Afghanistan to highlight inequality and push for higher taxes.
  • See more stories on Insider’s business page.

Warren Buffett’s talent for spotting undervalued businesses has made him one of the wealthiest men in history. However, he has repeatedly underscored the outsized role that luck has played in his career, and highlighted Afghanistan to hammer his point home.

Winning the lottery

The famed investor and Berkshire Hathaway CEO popularized the term “ovarian lottery,” or the idea that the circumstances of a person’s birth shape their opportunities in life.

“It’s the most important event in which you’ll ever participate,” Buffett said at Berkshire’s annual shareholder meeting in 1997. “It’s going to determine way more than what school you go to, how hard you work, all kinds of things. You’re going to get one ball drawn out of a barrel that probably contains 5.7 billion balls now, and that’s you.”

Buffett noted that he and his business partner, Charlie Munger, won the lottery by being born white, smart, able-bodied, male, and in America.

“When we were born, the odds were over 30-to-1 against being born in the United States,” Buffett said at the meeting. “Just winning that portion of the lottery, enormous plus. We wouldn’t be worth a damn in Afghanistan.”

“We’d be giving talks, nobody’d be listening,” he continued. “Terrible.”

The US has richly rewarded the two men’s knack for valuing businesses, but that wouldn’t be the case in every country, Buffett continued.

“Is that the greatest talent in the world? No,” he said. “It just happens to be something that pays off like crazy in this system.”

Buffett repeated that point more than a decade later, adding that many important jobs are far less lucrative.

“The market system rewards me outlandishly for what I do,” Buffett told Time magazine in 2012. “But that doesn’t mean I’m any more deserving of a good life than a teacher or a doctor or someone who fights in Afghanistan.”

Sharing the jackpot

Buffett has drawn comparisons between the US and Afghanistan to emphasize how inequality starts at birth. He’s called for a system that incentivizes people to use their skills if they’re valued by the market and society, but also helps people who don’t hit the jackpot in life.

That type of system “makes sure that just because at that one moment in time they got the wrong ticket, they don’t live a life that’s dramatically worse than the people that were luckier,” Buffett said at the 1997 meeting.

The Berkshire chief has also pointed to Afghanistan to make his case for higher taxes on the wealthy.

“While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks,” he said in a New York Times column titled “Stop Coddling the Super-Rich” in 2011.

Buffett’s comments show he’s aware of his numerous advantages and privileges, which include living in a country that rewards his skills and protects his wealth. Afghanistan is his go-to example of a much tougher situation, fueling his belief that the less fortunate should be lifted up and the most affluent should share more of their wealth.

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Warby Parker is going public with a Buffett among its investors – but it’s Jimmy, not Warren

jimmy buffett
Jimmy Buffett.

  • Warby Parker’s investors include a Buffett, but it’s Jimmy, not Warren.
  • The eyewear retailer disclosed the musician is a shareholder in its S-1 filing this week.
  • The two Buffetts aren’t related but call each other “Uncle Warren” and “Cousin Jimmy.”
  • See more stories on Insider’s business page.

Warby Parker is going public with a Buffett among its shareholders. But it’s Jimmy, not Warren.

The eyewear retailer – which is pursuing a direct listing after securing a private valuation of $3 billion last year – listed Jimmy Buffett as a stockholder in its S-1 filing this week. Jimmy Buffett is a musician whose hits include “Margaritaville” and “Cheeseburgers in Paradise,” while Warren Buffett is an investor and the CEO of Berkshire Hathaway.

The two Buffetts took a DNA test to check whether they shared more than a last name, but learned they weren’t related, The New York Times reported in 2018. They call each other “Uncle Warren” and “Cousin Jimmy” anyway, the newspaper said.

Both men oversee corporate empires. Berkshire owns dozens of businesses including Geico and See’s Candies, and holds multibillion-dollar stakes in Apple, Coca-Cola, and other public companies. Meanwhile, Margaritaville spans hotels, restaurants, drinks, merchandise, retirement homes, casinos, and even a Broadway musical.

Jimmy has known Warren for around 30 years, and the singer has attended Berkshire’s annual shareholder meetings many times and performed a few skits for the crowd, he told MarketWatch in 2018. Warren has also given business advice to Jimmy, and underscored to Bloomberg the value of the musician’s followers and their lifelong loyalty to him.

“Jimmy doesn’t need a revolving group of fans,” he said. “He basically just accumulates them, and he doesn’t lose them. Except when they get old and die.”

Buffett isn’t the only familiar name on Warby Parker’s shareholder list. It also features “Originals” author Adam Grant, who turned down the chance to invest when the company’s cofounders were college students, and Alexander von Furstenberg, the investment chief of Ranger Global Advisors and the son of fashion designer Diane von Furstenberg.

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