Warren Buffett Says Greedy Money Managers Are to Blame for Public Pension Problems

My closest connection to Warren Buffett is through a friend of mine who works for BNSF and once spent a day riding on a train with the billionaire sampling dishes for a new dining car menu. I am not a Berkshire Hathaway investor. I have never previously read any of Buffett’s annual letters. But I was intrigued on Tuesday by a New York Times article that quoted an allegation leveled by Buffett: he said that recent failures by money managers who charge exorbitant fees—yet often underperform the stock market—are responsible for much of the financial damage suffered by public employee pension funds. Considering the fact that the Dallas Police and Fire Pension just settled with its advisory firm, CDK, for around $2 million (a small chunk of the estimated $320 million in losses), I figured he was onto something.

So today, when I finally had a few spare minutes, I tracked down the letter. I learned two things: first, I need to switch to GEICO. Second, Buffett is a really good and surprisingly witty writer. I enjoyed his appropriate use of italics for emphasis. And the repeated GEICO jokes, which weren’t really jokes but an effective sales technique. There’s a reason this guy makes money.

The part of the letter quoted below is especially worth a read. Who else would use advice from a pig seller to explain the short-sighted loss of $100 billion by pension funds, endowments, and rich people over the last decade? Warren Buffett, that’s who.

Read more: http://www.dmagazine.com/frontburner/2017/03/warren-buffett-says-greedy-money-managers-are-to-blame-for-public-pension-problems/