Now it seems that another star of the 1970s and 1980s is also about to depart the stage, leaving a similar gap to fill – but this is in the investment field as opposed that of cricket. This star has continued to shine up until today. I'm referring of course to Warren Buffett and his remarkable achievements at Berkshire Hathaway. Like Hampshire, Buffett debuted in the 1960s but, as can be seen below of Berkshire Hathaway's net book value and stock price versus the S&P 500 index (Chart 1), he really came into his own in the 1970s. Also like Hampshire, Buffett too has been widely misunderstood; although Buffett has always gone to great lengths to appear to be an establishment figure. The press have tended to lap this up – believing in Buffett's genius as a stock pitcher, even though the data and even the latest newsletter from the Berkshire Hathaway AGM weekend in Omaha1 make it quite clear to anyone who looks closely enough that this isn't the source of Buffett's genius. Buffett realized, when he first acquired an insurance business, that the cash flow represented a great opportunity to invest premiums when they were received, make a profit on investing them, and then return a proportion (assuming an underwriting profit) of the original premium as and when claims had to be paid at a later date
