Dwight MacDonald was a prominent cultural critic during the 1950s. In Masscult & Midcult, he argued that a common feature of bad art is an emphasis on the artist, his personality, and his supposed genius rather than on the art itself. He mentioned Lord Byron as an example of this:
Byron's reputation was different from that of Chaucer, Spenser, Shakespeare, Milton, Dryden and Pope because it was based on the man--or what the public conceived to be the man-- rather than on his work. His poems were taken not as artistic objects in themselves but as expressions of their creator's personality.
There is a similar phenomenon in investing, in which many investment gurus are famous less for their ideas than for their personalities. They are famous for being themselves.
Warren Buffett is the most prominent example of this. Buffett was originally known for making a string of great investments and publishing shareholder letters that explained his philosophy of investing. Today, he's known for being "Uncle Warren," a down-to-earth Midwesterner who dispenses homespun advice in the manner of Will Rogers.
Buffett's ideas are no longer discussed or debated on their own merits; instead, public discussion of Buffett revolves around his witty sayings, personality quirks, and past successes. To the extent his ideas are mentioned, they're cast as pronouncements from "the Oracle of Omaha"-- i.e., Buffett doesn't deserves respect because his ideas are good, his ideas automatically deserve respect because they're his and he's Buffett.
MacDonald claimed that Byron's private writing was different from-- and much more cynical than-- what he wrote for public consumption: "Of course it wasn't really Byron himself but a contrived persona which fitted into the contemporary public's idea of a poet."
Likewise, there's a wide chasm between Buffett's public persona and his more cynical private beliefs. It wasn't always this way: one need only compare Buffett's letters from the 1970s to his CNBC interviews today to see how much his persona has changed.
The prologue to The New Market Wizards, Jack Schwager's trader interview book, includes a story from Ed Seykota:
One cold winter morning a young man walks five miles through the snow. He knocks on the Jademaster's door.
The Jademaster answers with a broom in his hand. "Yes?"
"I want to learn about Jade."
"Very well then, come in out of the cold."
They sit by the fire sipping hot green tea. The Jademaster presses a green stone into the young man's hand and begins to talk about tree frogs. After a few minutes, the young man interrupts.
"Excuse me, I came here to leam about Jade, not tree frogs."
The Jademaster takes the stone and tells the young man to go home and return in a week. The following week the young man returns. The Jademaster presses another green stone into the young man's hand and continues the story. Again, the young man interrupts. Again, the Jademaster sends him home. Weeks pass.
The young man interrupts less and less. The young man also learns to brew the hot green tea, clean up the kitchen and sweep the floors. Spring comes. One day, the young man observes, "The stone I hold is not genuine Jade."
Ostensibly, the moral of this story is that patience precedes wisdom. If a trader wants to become successful, he can't depend on other people for tips and easy answers. He must learn how to think for himself.
I have a different interpretation. Like the story itself, my interpretation is hokey and not entirely serious, but like the story I think it makes a valid point.
The story's real message is that many respected gurus are full of crap. The young would-be apprentice thought the jademaster would teach him valuable lessons. Instead, the jademaster exploited the young man's adulation and got him to perform free domestic labor, all while pulling his leg with a ridiculous story about tree frogs.
Warren Buffett is a modern-day jademaster. Buffett has carved a lot of jade over the course of his career, but many of the stones he's pressed into the public's hands are merely quartz.
When Buffett describes how Rose Blumkin was thrifty and dedicated to her business, he may as well be talking about tree frogs. Everyone knows that thrift, industriousness, and dedication are good qualities. The obvious doesn't become profound just because a guru says it.
When Buffett bemoans Corporate America's ethical lapses, he's fingering a particularly cheap lump of quartz. Buffett has treated Berkshire's minority shareholders admirably, but he's also used his image as an honest outsider to cut insider deals. His reputation as a man of strong principles has given him cover to violate some of them.
When Buffett praises quality businesses, he may as well be talking about tree frogs again. Like the jademaster, Buffett can talk interminably about his favorite subject without ever revealing the foundation of his success. Like the would-be apprentice, investors have to endure lots of diversionary stories before they figure it out for themselves.
I don't think anyone has interpreted the jademaster story this way before, but my whimsical interpretation does have one thing in common with the original: it argues that people can't depend on a guru for easy answers. That's true whether the guru is a long-forgotten gem carver or the world's richest investor.