- Billionaire investor Dan Loeb favorably quoted Warren Buffett this week after blowing up the Berkshire Hathaway boss as a hypocrite in 2015.
- “We highlight a remark from Warren Buffett: ‘Companies get the shareholders they deserve,'” Third Point chief wrote in a letter to Disney CEO Bob Chapek.
- Loeb called Buffett in 2015 for criticizing hedge funds, activist investors, financial institutions, and tax minimizers, despite acting similarly to them.
- Loeb said at the time that Buffett “has a lot of wisdom”
- Visit the Business Insider home page for more stories.
Billionaire hedge fund manager Dan Loeb quoted Warren Buffett in a letter this week asking for changes to Disney. The Third Point boss criticized the famous Berkshire Hathaway investor and CEO as a hypocrite in 2015.
Loeb, whose fund owned $ 613 million in Disney stock at the last count, advised CEO Bob Chapek to set aside $ 3 billion in annual dividends and invest the savings in Disney Plus, his direct-to-consumer streaming service. Business Insider got a copy of the letter.
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“We emphasize a remark by Warren Buffett: ‘Companies get the shareholders they deserve,'” Loeb wrote, citing Buffett’s 1979 letter to shareholders.
“Disney deserves growth-oriented and long-term investors, and we believe a strategy focused on using Disney’s many assets to drive growth in the DTC business will appeal to them even further.”
Third Point declined to comment.
Loeb’s use of a Buffett quote underscores his mixed feelings about the Berkshire boss, which he snatched at the SkyBridge Alternatives Conference in Las Vegas in 2015.
“I love reading Warren Buffett’s letters and I love comparing his words to his actions,” joked the activist investor before adding, “He’s a very wise guy.”
“I love the way he criticizes hedge funds, yet he had the first hedge fund,” continued Loeb. “He criticizes activists, he was the first activist. He criticizes financial services companies, yet he loves investing in them. He thinks we should all pay taxes, yet he avoids them himself.”
Loeb added that Buffett “has a lot of wisdom” but that “we need to be aware of the disconnect between his wisdom and the way he behaves.”
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Loeb made some valid points: Buffett managed “partnerships”, or funds limited to a handful of investors, in the 1950s and 1960s, took control of Berkshire Hathaway when it was a struggling textile company, includes American Express and Bank of America among its largest holdings and works hard to minimize tax payments.
Buffett, however, has exhibited a long-term, no-direct-intervention approach over the past few decades that contrasts sharply with typical strategies of hedge funds and activist investors.
In addition, he has donated nearly half of his Berkshire Class A shares – worth approximately $ 72 billion at the current share price – to charity and pledged to donate over 99% of his wealth.
Loeb may disagree with Buffett on some arguments, but he apparently sees his argument that companies choose their shareholders as a compelling reason for switching to Disney.