Diary

Nobody knows
Yogi Berra once observed "Prediction is difficult, especially about the future". It seems that, in investing, even the inevitable isn't as certain as you think. In a YouTube video dated 04-Aug-2010 (don't bother watching it, I'm giving you all you need to know), Robert Miles made three predictions:

1. Howard Buffett become non-executive chariman after Warren's departure
2. CEO would likely be David Sokol
3. CIO (Chief Investment Officer) would likely to be Li Lu. Munger called it a "foregone conclusion"

Points 2 and 3 must have looked like pretty safe bets at the time. As a point of fact, no outsider actually knew that Buffett had Sokol  in mind as his successor. Within a little over a year of the broadcast, Sokol left Berskhire after the whole Lubrizol thing. I'm not sure why Li Lu left - I get the impression that he didn't think it was the place for him. Point 1 is still an open question.

It's still not entirely clear to me if Li Lu is an extraordinary investor. An article on Alice Schroeder's site seems to sum the situation nicely.One part of the problem is that no-one seems to report what his performance actually was, or what it held. His most famous investment was in BYD (Build Your Dreams), which turned out to be a ten-bagger. The WSJ called his performance "unremarkable" (what's that it terms of solid numbers?). He did, however, obtain a 7-fold gain on shoe-maker Timberland. It's difficult to draw any meaningful conclusion from this. Perhaps "unremarkable" by WSJ's standards are "remarkable" by mine (where are those numbers?), or he had two lucky bets in 10 years with the rest a pile of abject mediocrity. Answers on a postcard, please.

For those wanting to take a wry look at the folly of prognosticating the future, check out the Wikipedia artcile on Incorrect Predicitions. My favourite must surely be:

Television won't last because people will soon get tired of staring at a plywood box every night. --  Darryl Zanuck, movie producer, 20th Century Fox, 1946.