What Buffett Knows About Capitalism (That You Don't) | AT E13

Warren Buffett has just made his first investment in Google, while at the same time, he is sitting on a record amount of cash, which he hasn't invested. It is the perfect time to understand his investment philosophy, which, surprising as it may sound, goes against every tenet of mainstream economics that we are constantly bombarded with. Buffett has made money because he does not believe in the foundational myths of mainstream economics - that markets are efficient, free markets make it tough for any single company to control the market, and that everyone has equal opportunity in free market capitalism. Buffett's method is exactly the opposite. It depends on, what I call, the Three Ms: 1) Market Irrationality 2) Monopoly 3) Money Power. This video is meant to expose this truth about Buffett's methods. It is not a rant against him, because he has made his money fair and square, following the REAL rules of competition under capitalism. ------------------------------------------------------------------------------------ 00:00: How Buffett Ignores Mainstream Economic Myths 01:42: The Three Ms: Market Irrationality, Monopoly, and Money Power 02:34: 'Mr. Market' - How Market Irrationality is an Opportunity 03:22: Salad Oil Scandal: Why Buffett Bet on American Express 05:21: Buffett's Bet on Monopolies - Buffalo Evening News Case 07:07: Buffett's 'Euphemism' for Monopoly - 'Moat' 07:56: Only Big Business and Monopolies in Buffett's Equity Portfolio 08:53: 'Ham Sandwich' Companies - No Talent Needed 09:19 Money Power and the Cost of Capital 09:50: 'Our' Cost of Capital vs Buffett's 'Negative' Cost of Capital 10:40: The Logic of the Insurance Business 11:10: How Insurance Float Generates a Negative Cost of Capital 12:06: Mainstream Economics and the 'Fairy Tale' of Capital Access 12:59: How Reputation and Clout Help the Superrich 13:39: How Buffett Understood 'Real' Competition #stockmarket #warrenbuffett #google