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The wisdom of Warren Buffett

It is never a waste of time to read Warren Buffett’s letter to stockholders in the Berkshire Hathaway annual report. Published last month, the report suggests to me that the “Oracle of Omaha” should probably be added to Mount Rushmore when the time comes.

The letter coincides with the release of the HBO documentary “Becoming Warren Buffett,” which traces the life of this extraordinary man from his days as a child who had a paper route with 500 customers.

Tapping the brakes when the market runs wild

News outlets, namely The New York Times, recently revealed the existence of a lonely recluse rarely seen in public who manages $30 billion for a select group of clients — clients who have enjoyed results that rival those of Warren Buffett. The “spotlight,” as it were, illuminated Seth Klarman thanks to the leak of a letter discussing his thoughts about a Trump presidency and its effects on financial markets.

Since when is protecting workers’ retirement savings a bad thing?

The current administration has pledged to overturn the Labor Department’s fiduciary duty rule — a new rule forcing financial services providers to offer retirement account investment products chosen in “the sole interest of the beneficiary of the plan.”

In other words, it mandates the behavior that defines a “professional.” To me, the word “professional” has always meant a person who recommends for clients what they would purchase for themselves knowing what they know about the possible alternatives and prices.

Insulating your investments from the effects of ‘policy risk’

In the absence of a “black swan” event — a difficult-to-predict, typically catastrophic occurrence — the stock market is poised to continue a rise that reflects what promises to be lower taxes, less regulation and continued low interest rates, even if the latter rise a moderate degree.

So economic risk appears to be minimal, and this is reflected in the run-up of stock prices since the election. What is not being factored in is something referred to as “policy risk,” which includes the impact of proposals and laws created in recent days by the incoming administration.

Caring enough to provide decent pay

Reflecting on both Martin Luther King’s legacy and the complement of caregivers helping with my father in the final years of his life left me thinking about how the diversity of people from all walks of life creates such a powerful unifying force in society. The demographic bubble of baby boomers now heading deeper into retirement will depend on the strength of that unifying force more than ever in the coming years.

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