Bloomberg Reports Roubini in Good Company as Investor with Most Wisdom

Author: Nouriel Roubini  ·  October 29th, 2009  ·  257906http%3A%2F%2Fwww.economonitor.com%2Fnouriel%2F2009%2F10%2F29%2Fbloomberg-reports-roubini-in-good-company-as-investor-with-most-wisdom%2FBloomberg+Reports+Roubini+in+Good+Company+as+Investor+with+Most+Wisdom2009-10-29+11%3A52%3A08Nouriel+Roubinihttp%3A%2F%2Fwww.economonitor.com%2Fnouriel%2F2009%2F10%2F29%2Fbloomberg-reports-roubini-in-good-company-as-investor-with-most-wisdom%2F › Share This Print

From Bloomberg:

Oct. 29 (Bloomberg) — The Oracle of Omaha retains his pre-eminence as a market visionary, outshining a new wave of financial strategists and the best-known central bankers.

Billionaire investor Warren Buffett, chairman and chief executive officer of Berkshire Hathaway Inc., is regarded as the best assessor of financial markets by a plurality of almost one-fourth of respondents to the quarterly poll of investors, traders and analysts who subscribe to the Bloomberg terminal.

The closest runner-up, Bill Gross, the founder and co- chief investment officer of Pacific Investment Management Co., is chosen by 16 percent. Billionaire investor George Soros gets 10 percent, followed by Nouriel Roubini, the New York University professor who in 2006 predicted the financial crisis, and Marc Faber, publisher of the Gloom, Boom & Doom Report.

Fewer than 1 in 10 cited Federal Reserve Chairman Ben Bernanke, despite high marks for his performance as a central banker. Only 3 percent pick Alan Greenspan, the former Fed chairman.

“The other people in the list have their merit, but I think consistency — which does not mean total absence of mistakes — is the key to rating Buffett,” says poll respondent Frédéric Bach, 46, a partner and head of fixed- income investments at London-based Falcon Money Management LLP, which manages $4 billion. “I would add a non-financial element: there is some humility in the man, as when he opted out of tech stocks because he didn’t understand them. Who in finance nowadays will admit they are wrong, or they don’t understand something?”

Obama Rating

Investors’ confidence in President Barack Obama and his economic team dropped sharply during the past three months, even as the Standard & Poor’s 500 Index rose about 7 percent and Obama was awarded the Nobel Peace Prize. Among global investors, 57 percent say they hold a favorable opinion, down from 73 percent in a July poll.

Among U.S. investors, two-thirds hold an unfavorable opinion of Obama. Treasury Secretary Timothy Geithner and Lawrence Summers, head of the National Economic Council, also get negative grades from U.S. respondents.

The quarterly Bloomberg Global Poll of investors and analysts in six continents was conducted Oct. 23-27. It is based on interviews with a random sample of 1,452 Bloomberg subscribers, representing decision makers in markets, finance and economics. The poll has a margin of error of plus or minus 2.6 percentage points.

The Bloomberg Global Poll is conducted by Selzer & Co., a Des Moines, Iowa-based public-opinion research company.

Buffett Missteps

Buffett’s lofty standing follows some recent high-profile setbacks, among them an investment in Houston-based ConocoPhillips, the third-largest U.S. oil company, which the billionaire called a “major mistake,” and the purchase of shares in two Irish banks that soon afterward plummeted in value as the financial crisis struck.

Berkshire Hathaway showed a 9.6 percent decline in book value last year, only the second time the measure has fallen since Buffett took over in 1965, and the company’s stock price underperformed the S&P 500 during the year ended Sept. 30.

Still, Buffett also seized advantage of the financial panic last fall to make big purchases in well-known companies at depressed prices, extending $8 billion in financing to New York- based Goldman Sachs Group Inc. and Fairfield, Connecticut-based General Electric Co. at 10 percent yields after the Lehman Brothers Holdings Inc. failure froze credit markets.

Jeff Matthews, author of “Pilgrimage to Warren Buffett’s Omaha” and founder of the hedge fund Ram Partners LP in Greenwich, Connecticut, says the long arc of Buffett’s investing career makes him stand out.

‘One-Hit Wonders’

“There have been a lot of one-hit wonders over the last 40 years,” Matthews says. “Warren Buffett has outlasted them all.”

Among U.S. investors, Pimco’s Gross rated as highly as Buffett. Newport Beach, California-based Pimco, the world’s biggest manager of bond funds with $840 billion in assets, has called for a “new normal” in the global economy that will include heightened government regulation, lower consumption, slower growth and a shrinking global role for the U.S. economy. Pimco is a unit of Munich-based insurer Allianz SE.

“While not always on-point, he brings a rigorously analyzed yet pragmatic perspective that yields some value at any point in time,” says poll respondent Michael Martin, senior vice president and general counsel of MDAdvantage Insurance Co. of New Jersey. “The facts, as Gross and his team have determined, appear to indicate a long and perhaps very difficult path for this country and others like it.”

International Luster

While Obama has lost some of his international luster, he continues to be viewed positively outside the U.S. In interviews, poll respondents cited the turnaround of the U.S. economy under his leadership.

“The world is facing the worst economic period of its recent history,” says Francesco Scotto, 36, head of treasury products for BNP Paribas Fortis in Milan. “Acting on both the real and the financial economy, the U.S. government helped in the best possible way the American economy to exit from the crisis.”

U.S. investors’ highly critical view of the Obama administration is at odds with the views not only of investors elsewhere but also the general public at home. Most polls of Americans have shown only small erosion in Obama’s popularity over the past three months and the president is viewed favorably by comfortable margins of the U.S. public.

The Obama policy agenda has a more direct impact on U.S. investors’ bank balances, says Ann Selzer, president of Selzer & Co., which conducted the poll.

‘Skin in the Game’

“They have a different kind of skin in the game,” Selzer says. “They worry about potential government interference in their ability to make money for themselves and their employers and their clients. They see higher taxes and controls on executive pay on the horizon and it can’t possibly make them happy.”

Bernanke’s leadership of the Fed is held in high esteem across every region, with a favorable view from 69 percent of investors worldwide, down slightly from 74 percent in July.

Geithner is viewed positively by 48 percent against 43 percent with a negative opinion.

The worldwide verdict on Summers is negative, with 42 percent rating him unfavorably versus 34 percent favorably.

Click here for additional information on methodology and a full list of survey questions.

To contact the reporter on this story: Mike Dorning in Washington at mdorning@bloomberg.net.