Years before Freddie Mac was rocked by an accounting scandal, billionaire investor Warren Buffett got on the phone with Freddie Mac chairman Leland C. Brendsel and explained why he was selling shares of the giant mortgage funding company.
Brendsel had made pledges about earnings growth at Freddie Mac, and Buffett was apparently worried about where such promises might lead.
Warren Buffett warned in 2000 that institutions with "a primary goal of earnings growth get into trouble... All my history is that all institutions that have a primary goal of earnings growth get into trouble... If you put a gun to my head, I would produce the earnings..."
According to Brendsel's notes, as Buffett prepared to part ways with Freddie Mac, he told Brendsel he was "grateful for the money you made me" and offered some characteristically pointed homespun advice: "If you really want a marriage to last, you want to marry someone with low expectations..."
1 comment:
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