I have been highly critical of Warren Buffett over the years.  He is obviously one of the best investors of all time (if not the best), but he is a disappointment when it comes to his politics.

It is for similar reasons that I have been critical of Rand Paul in the past, although Rand Paul has been much better since his failed presidential campaign.  Both Warren Buffett and Rand Paul are the sons of libertarian congressmen.

Ron Paul is certainly the most pro liberty congressman of the 20th and 21st centuries.  He might be the most pro liberty congressman ever, but it is hard to compare with some going back to the 1700s and 1800s.

Howard Buffett – the father of Warren – was probably the second most pro liberty congressman of the 20th century.  He was a non-interventionist, and he understood free market economics.  He was an advocate of the gold standard.

Ron Paul rubbed off more on his son than Howard Buffett did on his. Of course, I wish Rand were more like his father, but at least they are in the same ballpark.  Warren Buffett is very different from his father unfortunately.

Warren Buffett is a capitalist in the sense that he invests his capital and he strives to make a profit.  The problem is that he is not a believer in the free market.  He promotes big government way too much, and he has no excuse because he failed to learn from his father.

I don’t know if Warren Buffett promotes big government because he can use it to his own benefit up to a certain point.  Or maybe he really does believe the things that he says.  I suspect it is something of a combination of the two, as with so many quasi-socialists and promoters of big government.  Buffett probably instinctively knows that the government can work in his favor at certain times, and he is willing to turn a blind eye to the damages that it does to middle class America.

Buffett has been doing his seemingly ritualistic interview with Becky Quick on CNBC.  She is one of the few people who gets inside access to Buffett and can get him to open up about certain things in public.  It was surprising to hear Buffett actually praising the cut in corporate tax rates to a certain extent.

Buffett also recently put out his annual letter to the shareholders of Berkshire Hathaway.  In terms of advice, there is useful information. Buffett shows that he became extremely wealthy by being patient and not necessarily running with the herd.  He takes a rather conservative approach, as you can see by his comments warning about acquisitions.

The letter states: “Our aversion to leverage has dampened our returns over the years.  But Charlie and I sleep well.  Both of us believe it is insane to risk what you have and need in order to obtain what you don’t need.  We held this view 50 years ago when we each ran an investment partnership, funded by a few friends and relatives who trusted us.  We also hold it today after a million or so ‘partners’ have joined us at Berkshire.”

I part ways with Buffett when he starts giving advice to the lay person about investing.  He says to buy and hold.  He says to buy a broad index fund.  He tends to take the opposing view of what his dad held in that Warren does not advocate gold, even when it comes to investing.

The problem is that Warren Buffett is not giving the same advice as what got him wealthy.  Although he comes across as a conservative investor, he focused his efforts into the things he knew.  He bought shares in companies that he thought were undervalued and had great potential.  Buffett didn’t get rich buying index funds.

The one thing I really like about Buffett as an investor is that he is good at staying away from the herd mentality.  He has famous quotes in this area.  He says to hold when everyone else is in a buying frenzy.  He buys when there is blood in the streets.  On this, it is good to listen to Warren Buffett.

If only he understood better, or acknowledged, that these bubbles and busts are related to central banking.  He may be 87 years old now, but he should go back and read some of the material that his father put out.  He could still learn something at his age.