A Different Application Of GAAP

In February 2001, legendary financial writer Carol Loomis, commented on Warren Buffett’s age in a piece for Fortune.  Jack Welch was just retiring at GE and the question of Buffett’s retirement was implicit.  How long should the chairman remain?

I wrote a letter to Mr. Buffett suggesting he should adopt a different method of accounting for age.  Use Celsius.  In Celsius, 70 is only 21.  The idea is that you are as old as you think you are and if 21 makes you feel better then change the accounting methods.  Keeping track of age in Celsius may be within Generally Accepted Accounting Principles (GAAP.)  I have checked and it is not prohibited.

He replied with a brief letter which I came upon recently.

letter from warren buffett

He is now 29 Celsius and seems to still have the energy to continue his success.

There is a worthwhile compendium of articles here.  There will be a benefit to read them and absorb the wisdom.  Especially notice The Superinvestors of Graham-and-Doddsville.

As investors, we could all do well to adopt his enthusiasm and ruthless objectivity.

Contact: don@moneyfyi.com  

Don Shaughnessy is a retired partner in an international public accounting firm and is presently with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario.

This entry was posted in Investing, Personal Finance and tagged , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s