The latest Buffett scandal is one of these latter cases, where his political involvement is now blowing up in his face. See Bloomberg's Buffett’s NetJets Countersued by U.S. for Unpaid Taxes
NetJets Inc., the private-plane company owned by Warren Buffett’s Berkshire Hathaway Inc. (BRK/A), was countersued by the U.S. over $366 million in taxes and penalties.Dr. Stephen Leeb, Chairman & Chief Investment Officer of Leeb Capital Management, also had this to say about Buffett in a recent King World News interview:
NetJets in November sued the U.S., saying the federal government had wrongly imposed taxes, interest and penalties totaling more than $642.7 million.
Claiming the federal Internal Revenue Service wrongfully assessed a so-called ticket tax -- an excise tax on payments made in exchange for air transportation -- to private aircraft owners maintaining their own planes, the Columbus, Ohio-based company demanded refunds and abatements.
The federal government, in a revised answer and countersuit filed yesterday in federal court in Columbus, rejected NetJets’ claims and alleged that four of the company’s units owe unpaid taxes and penalties.
“I hate to say this because I’ve been a fan of Warren Buffet for so many years, but he lives and breathes the S&P. That’s his Bible, so to speak, stocks. He comes out and makes a comment (denigrating gold) that is so off base and so misleading, it sort of tells you even the best and the smartest are getting a little bit desperate in terms of trying to hide what is really happening to this world.Buffett would no doubt say he'd use the cash to buy other assets, rather than sit on it. However, the point is that Buffett's attacks on gold and defense of stocks does not take into account the change in social mood that could affect these asset values for years to come. Furthermore, as his experience with derivatives, currency and commodity plays shows, Buffett isn't following the advice he gives individual investors. One possible outcome is that Buffett does well with derivative bets and complex financial arrangements, offsetting the decline in his stock portfolio. Meanwhile, individual investors only holding stocks lose a large portion of their assets. Worst of all for Buffett, gold outperforms stocks and suddenly everyone hates Buffett and thinks he's an old codger out of tough with the times.
There is no doubt in my mind that if you were to ask Buffett straight out, ‘Let’s suppose, Berkshire Hathaway, someone makes you an off for the entire stock. Would you rather that offer be in dollars or in gold?’
Now if he tells you dollars, you say, ‘Mr. Buffett, read above where you point out that dollar values have gone down by 80% or 90% over the past 30 to 50 years. Down relative to what? Gold. So you (Mr. Buffett) are telling me despite dollar values being down and steadily going down, you would still rather take dollars than gold? Get real.’
My point here is when you get guys like Buffett so desperate that they are making these contradiction in terms (3 paragraphs from each section in the article) and seeing them contradict each other, people like that making those kinds of mistakes tells you there is a certain psychology of desperation. People are scared to death, especially policymakers.”
Of course, if Buffett is lambasted and say, has a negative cover story, it might well signal the time to go long and buy-and-hold stocks.
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