Warren Buffett was wrong to recommend S&P 500: Berkshire shareholder - Business Insider

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'Buffett needs to listen to Buffett again': Investor was wrong to recommend tech-heavy S&P 500, Berkshire Hathaway shareholder says

Warren Buffett recommended the S&P 500 several times at Berkshire Hathaway's shareholder meeting this month.a large chunk of the index, Tony Scherrer of Smead Capital ManagementHowever, Buffett warned against "gruesome" businesses that grow quickly, require lots of capital, and generate minimal profits in his 2007 shareholder letter.

The famed investor also described the benchmark index as "the best thing" for most people, and argued that telling them to park the majority of their wealth in index funds was "better advice" than most investment advisors offer.10 big-money investors each share the single market risk they think traders are overlooking right now

"He recently emphasized indexing and didn't shy folks away from today's glamour tech stocks which require more and more capital," Scherrer said in the blog post."The worst sort of business is one that grows rapidly, requires significant capital to engender the growth, and then earns little or no money," he said.

 

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Buffett is 100% correct on that recommendation.

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