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Should You Listen to Warren Buffett?


Welcome to Episode #30 of the Zacks Market Edge Podcast.

Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.

In this episode, Tracey is joined by Brian Bolan, Zacks Equity Strategist and Editor of the Game Changers and Stocks Under $10 portfolios.

Berkshire Hathaway (BRKB) just held its annual shareholder meeting in Omaha which draws thousands of faithful Warren Buffett fans every year. As a result, for the entire weekend, the financial press was filled with quotes from Warren Buffett.

Additionally, after the meeting, Warren Buffett, Charlie Munger and Bill Gates were interviewed for several hours on CNBC about their views on the economy and the stocks that Berkshire Hathaway owns, including IBM (IBM), Wells Fargo, American Express and Coca-Cola.

Warren Buffett has given out a lot of advice over the years.

But should you be following it?

Brian has never been a Buffett fan, but being a value investor, Tracey has read books and articles about the Oracle of Omaha over the years. She was once a Berkshire Hathaway shareholder (of the B shares.)

Have times changed since Buffett was investing in the 1970s which makes his advice less applicable to today’s market?

And does the size of Berkshire Hathaway, which is a large cap, mean that Buffett can no longer invest in the small cap value names he was famous for?

Brian does like one aspect of Buffett’s investing advice and that’s the buy and hold strategy but thinks the “hold” part is the most difficult for most investors. Tracey’s not a fan of the large cap dividend paying stocks that seem to dominate Berkshire’s stock portfolio now.

Tracey and Brian discuss what stocks they like now (hint, they aren’t IBM.)

Brian likes the disruptor technologies like the lending companies such as OnDeck Capital (ONDK) and Lending Club but also is a fan of the old line companies like Johnson & Johnson (JNJ) if you’re investing for the long haul and looking for a dividend.

Tracey, following Buffett’s lead, likes companies with well known brands such as Snap-On (SNA) and Bank of the Ozarks (OZRK).

Is the Oracle of Omaha still worth listening to in 2016? Check out this week’s podcast to find out.


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