As the new year gets underway, it’s time for Warren Buffet’s eagerly awaited but also much feared yearly Analyst Recommendations. From this room at the Omaha office, the world’s wealthiest investor ever had some surprising advice going into 2016.
“Thank you for watching. This year, I want to highlight a few stock analysts in particular”, Mr. Buffett opened the video broadcast, “and unfortunately, that is not because they did a good job. I feel it is my obligation to warn you”, he said. “They may work for the big firms, they may have appeared on Best Analyst lists, but I’m telling you: Don’t listen to a word the following folks have to say about stocks in 2016.”
The list started with Betsy Graseck, of Morgan Stanley, specializing in large-cap banks. Mr. Buffett pointed out that Mrs. Graseck, while named as a top analyst in 2013, had recently settled with her new boyfriend. “No offense, but this guy she’s seeing now, he’s the worst. He’s into numerology and astrology and I’m suspecting it’s affecting her analysis. Her recent prediction that Goldman Sachs (NYSE: GS) would drop to $6,66 on June 6th this year seemed a bit off. And just yesterday, she was babbling about Citi (NYSE:C) being a strong Sell because the Moon and Jupiter are about to collide. I mean, even I know that’s crappy astrology.”
A second warning was raised for Daniel Ford of Barclays, specializing in utilities. While Mr. Buffett was positive about his earlier performance, he was certain Mr. Ford’s ratings could not be trusted this year. “He’s a nice guy. He surely is… but he’s too stubborn to wear his damn glasses”, sighed Mr. Buffett, pointing at his own. “When you unintentionally break into your neighbors home, twice, and try to open your boss’s car thinking it has to be yours, that’s a problem”, he added.
Harsh words were also heard about John Pitzer of Credit Suisse, specializing in technology stock. “I feel for John”, Mr. Buffett said, shaking his head. Mr. Pitzer married in early 2015 to a young woman, part of a tightly-knit Mafia family in New York, he revealed. “It’s like watching the Sopranos”, he gestured, “all of a sudden John started handing out sky high ratings for, what, businesses selling garbage collection vehicles, roulette wheels and of course, pizza ovens. Unbelievable.”
Brian Abrahams of Wells Fargo, focused on Healthcare, was also on the list. “I used to respect analysts from Wells Fargo”, Mr. Buffett shared, “but this guy, he’s gone off the cliff.” Mr. Abrahams, it turns out, has come to rely increasingly on various types of mushrooms for relaxation, and can now barely function. “It’s just sad. I saw him on MSNBC the other day. Oh man. He went on and on about the color constrast between CVS and Merck, and he was dead certain the entire healthcare sector was about to merge into a rainbow”.
A final warning was for Jeffrey Zekauskas, of J.P. Morgan, specialized in chemicals. “Jeff was always a great analyst, lots of solid ratings”, Mr. Buffett remembered, “but this year I’m really not expecting much of him”. Mr. Zekauskas, fond of Apple products but also very clumsy, managed to lose his MacBook Air 5 times last year. “Last time he swore it was stolen by a group of trained rats. I… don’t know about that, but I heard his boss gave him a children’s tablet to work on for 2016. I mean, there’s not a lot of analysts coloring Disney princesses”, Mr. Buffett concluded his damning list.
Next week: Mr. Buffett explains how stock analysts hairstyles can tell you when they are lying.