Miscellany: Betting on Buffet

Betting on Buffet

It is possible that we are currently witnessing one of the biggest single successful investment calls since George Soros and sterling.

Warren Buffet, some time ago, took a large short position on the US dollar. At his last AGM he explained that the decision had not been profitable so far but he remained confident about the call.

Now everybody makes a wrong call from time to time – if only because even right calls can be confuted by poor timing. Keynes’s quip that the market can stay irrational for longer than you can stay solvent is an ever-present reminder that even rational decisions can have serious downsides.

For some time – and even this week – some commentators have been arguing that this time Buffet got it wrong. As every day goes by it is increasingly likely that he got it very, very right. Just how right might come to be measured by whether the Soros coup will appear to be small change or not.

Perhaps we need a new investment homily to go with all those other contradictory quips beloved of the market: “Don’t bet against Buffet”.

It’s all Greek to me

Speaking of being right, wrong, right at the wrong time, vice versa and so on it may well be that the Australian Government is the only government in the world which seems to think that Colin Powell’s resignation as US Secretary of State is not a setback for moderation.

Admittedly any objective assessment of his record might suggest that they are right – if for all the wrong reasons.

A sidelight on Powell’s reputation for moderation, according to the BBC Website at least, dates back to the first Gulf War when visitors to his office were struck by a quotation which was sealed into the glass covering on his desk. The quote, from Thucydides, said: “Of all manifestations of power, restraint impresses men most”.

In the Times Literary Supplement’s October 8 NB column the quote was described as central to the Powell doctrine citing a 1998 amplification in which Powell expounded on Thucydides as his favourite historian.

But, NB goes on to say, a University of Wisconsin classics scholar, Shifra Sharlin, has claimed in an article in the magazine Raritan, that the quote is a fabrication. She’s used fact checkers, various sources and even called the US State Department way back in 2002 seeking a source for the quote.

Tim Rood at Oxford leapt to Powell’s defence a week later in the TLS. While admitting that he couldn’t find the quote either, he did suggest that it was a reasonable paraphrase of the argument Thucydides puts in the mouth of the general Nicias in a speech trying to dissuade the Athenians from invading Sicily. Now the Athenian invasion of Sicily makes the US invasion of Iraq look like the most successful military and political operation of all time and Napoleon’s retreat from Moscow one of the greatest victories of all time. But it does appear, nevertheless, that Powell’s favourite quote about moderation was about as accurate as his WMD presentation to the UN.

Whether it is accurate or not is possibly less relevant than a bigger question: why do the Greeks and their experiences resonate so much with Powell and so many others right now?

In her book, Dionysus since 69, Edith Hall says that: “more Greek tragedy has been performed in the past 30 years than at any point in history since Greco-Roman antiquity”.

Recently Donald Kagan (not to be confused with Robert the neo-con) edited his multi-volume work on the Peloponnesian Wars down to a single volume which has become a best-seller. During the lead-up to the Iraq War I was trying to decide whether to read it or not. When I mentioned to a friend that I was thinking of reading the new Kagan he looked at me sceptically and asked whether or not I’d be better off re-reading Thucycdides.

In the end I opted for Kagan and was struck even more forcefully than ever before by the overwhelming lesson from the Peloponnesian Wars: if you had known what the outcome would be, would you have decided to do it? The answer is straightforward for Howard, George Dubya and Tony Parkinson of The Age – of course! But for the rest of us, those Greeks – once again – have something to teach us.

Misquotations and fabrications

Misquotes and fabrications are common in public discourse – although some of them are more a case of mis-remembering.

Abraham Lincoln didn’t live long enough to say all the things falsely attributed to him in US politics most years.

Environmentalists adore the Cree Indian chief speech which adorns various green posters and eloquently makes the case against modern industry and anything but new age spiritual relationships with the Earth. That one was a fairly modern invention by a white man but it does read well.

Even the greats get it wrong. Reviewing the Dionysus book (also in the TLS) the classicist Mary Beard (see Miscellany on the Parthenon last week) recounted the famous story of Bobby Kennedy on April, 4 1968 the day after the assassination of Martin Luther King. Bobby quotes the lines from the chorus in Aeschylus’ Agamemnon: “Even in our sleep, pain which cannot forget falls drop by drop upon the heart, until in our despair, against our will, comes wisdom through the awful grace of God.”

At the time I thought it was a class act and – let’s be fair to Powell and Kennedy – can you imagine Howard or George Dubya quoting Thucydides or Aeschylus? If you are feeling depressed think for a hilarious moment of George trying to pronounce them.

But the Bobby quote was – according to Beard – mis-remembered as well, although she was generous enough to ascribe it to a faulty US translation used in universities there.

And, to pre-empt criticism I concede that there is a touch of doubt as to whether Keynes said precisely what I quoted him as saying above. None of us are totally innocent!

Ron Walker and Bernie Ecclestone

Ron Walker has assured us all that Bernie Eccletone’s role in F1 is OK. Now while crikey has been totally unfair and unkind in suggesting that Ron should have been more explicit in pointing out that he has a bit of an interest in the subject, it is perhaps more interesting that Ron’s prediction looks like being wrong.

According to the weekend Financial Times Bernie hasn’t managed to negotiate an early hurdle in the battle for control of F1 racing too well.

Bernie tried to persuade the English courts that the battle ought to be heard under Swiss law. His appeal was disallowed with Lord Carnwarth finding that “the overall dispute concerns the control and future of Formula One racing” and that no purpose other than to “increase delay and expense” would be served by moving the case to Switzerland.

The FT says the case, lodged by creditor banks against Bernie’s Bambino family trust and Formula One Holdings will now be heard in London at the end of the month. The FT also predicts that the banks are likely to form an alliance with the big car-makers taking part in FI and that, even if Bernie wins, a split and rival championship is likely.

Fantasy and the clash of cultures

The cult science fiction writer, Terry Pratchett, recently visited Australia. While at a seminar at ANU for he said: “The situation facing us is not a war of Islam against Christianity but…..more like a conflict of stupid people against stupid people”.

While we always love apposite quotes it did raise a question about sci-fi and politics. Much sci-fi was very political and reflected particular world-views. Robert Heinlein was a right winger from way back with plots verging on endorsements of fascism. Isaac Asimov fought the fight between barbarism and social democracy and – like Balzac – retrospectively linked many of his books into a continuing, connected saga to make it all the more convincing.

In more recent years swords, sorcery and wizardry have pushed the category into entirely new directions even if Lord of the Rings is arguably as much about world war one as about the one true ring.

In Australia sci-fi has tended to be subordinated to the interest in Australian crime fiction with authors such as Peter Corris, J.R. Carroll, Shane Maloney, Kerry Greenwood, Peter Temple et al showing the way.

However, there has been Australian sci-fi and Race Mathews is next week launching Black Inc’s The Best Australian Science Fiction Writing a Fifty Year Collection. It’s edited by Rob Gerrand – a spin doctor who also writes sci-fi, business books and the odd novel.

Not sure whether rockets or elves predominate but well worth looking at anyway