 Good day fellow investors. Now Warren Buffett is famous for his quotes and there are many many quotes and they are great quotes especially for creating a mental investing mindset. However, not all those quotes should be taken for granted and in this video we'll discuss three quotes that can be considered lies because Warren says one thing but does the other thing. So let's immediately start with the first quote. Buy businesses that an idiot can run because sooner or later an idiot will run them. So Buffett has been constantly saying that for 50 years now but there is a big difference between what Warren says and what he does. Let's first see what is an easy simple business great business at a great valuation that Warren bought in 1972. In 1972 Warren bought Sees candy for 25 million which is a very very low price when you think that since then so in the what we are 45 years Sees candy earned 1.9 billion in pre-tax earnings so he paid 25 million for 1.9 billion in pre-tax earnings that's an excellent return. Sees candy it's a box of chocolate so very simple business an idiot can run it and there is the brand so great investment. However Sees candy is just a small part of Berkshire if you look a bit more big deeper you'll see that many many investments are complicated ones and no idiot can run those businesses. One example is Berkshire's reinsurance business in every letter to shareholders and annual report Buffett spends a ton of words to praise Ajit Jain which is the CEO of Berkshire reinsurance. If we look at this part from Warren Buffett's letter to shareholders we can see that he's saying how he has some terrific managers running disciplined operations that possess hard to replicate business models. When he describes reinsurance he says that Ajit insures risks that no one else has the desire or capital to take on no one else so this is really not something an idiot can do. His operations Ajit combines capacity speed decisiveness and most important brains in a manner unique in the insurance business so this is clear how no idiot can run Berkshire reinsurance it has to be a genius so one thing he says the other he does. Another example are Buffett's deals with Free G's Paulo Lehmann. In 2013 they bought Heinz so that was a company with very small margins and then Buffett put in the money and the pub his public face and Lehmann Brazilian investor put his knowledge and operational activity into the company. 11 of the 12 CEOs from Heinz got sacked and thousands of people lost their jobs so Paulo Lehmann improved operation increased margins increased profitability and make that investment work. There are few Paulo Lehmanns in this world so again he has a genius running companies turning them around and then he's saying that you should find businesses that an idiot can run no idiots can run Heinz or can do what Paulo Lehmann did. The same holds for Buffett's failed acquisition of unilever again low margins stagnating company then they would put in Paulo Lehmann fire all the management that's why the management was opposed to their position and that's why the acquisition didn't go through because the management knew their heads would roll so they were opposed okay and Free G said we are not going to do hostile takeovers that's too complicated nevertheless Paulo Lehmann is a shark and he knows his business so Buffett simply says okay that's not me or he used to comment about behind's acquisition that that's simple how capitalism works you have to fire people you have to make things more efficient that's true but he leaves the dirty work to others so it's not really that idiots can run his investments very very smart people dedicated people run his investments so the takeaway from the first quote is find companies with great amazing management and sell them when something changes there are no more businesses that can be run by idiots in this environment competition technology everything is moving so fast you need excellent management you need people that are capable that know what they're doing and that are dedicated to their business so that's the first Warren Buffett lie second let's say lie or misunderstanding is the first rule of investing according to Buffett is never lose money second rule is look again rule number one okay I say never lose money but I think the investment population doesn't understand really what Buffett wants to say if we take a look at a 52 year performance on Berkshire Highway you see two measures the first column is the book value of Berkshire and in 52 years only two years 2001 and 2008 have been negative however the market value of Berkshire's stock has had 11 negative years the same as the SAP 500 so what Buffett wants to say with not losing money is not losing book value book value he doesn't care about market moves the market will always be volatile and you have to take advantage of that however losing money is investing there where there is risk of permanent capital loss or inadequate returns on earnings on fundamentals Buffett doesn't care that much about what the market is doing so don't think that you are not allowed to lose 10 20 percent or even 50 percent in a year Buffett lost 50 twice in market value however the book value stayed stable so that's a difference that many don't understand Buffett is not afraid to lose market value he's afraid and focused on book value a big difference the third thing Warren Buffett does differently than what he says is that he has been saying for the past 50 years that he doesn't care what the Fed is doing and that if he would knew what the Fed will do tomorrow that wouldn't change his investment strategy now that was good for 50 years because the Fed's influence on the stock market was minimal when there was a recession the Fed would lower interest rates when everything was good interest rates would immediately shoot out so it was a balancing mechanism that was worked well for 50 70 years however since 2008 the Fed increased in its balance sheet up normally in order to stabilize the financial world you can see here how correlated is the SAP 500 with the Fed's balance sheet in blue practical perfect correlation since 2009 so it's certainly no coincidence that the stock market is up three times and Fed's balance sheet is up five times you see here that from 2000 to 2008 the Fed's balance sheet was really growing slowly in order to keep enough money into the system since then it exploded so up to 2008 it was okay not to care about what the Fed is doing but since then I think Buffett is watching and we have to watch what the Fed is doing and try to position ourselves to at least hedge the risks of what's going on how is Buffett hedging himself for the risks well he has 100 billion in cash he never had so much money in cash and he's piling piling that cash which means he's preparing himself for something he's preparing himself for bargains and the bargains will come when interest rates increase when interest rates increase he will be helping those companies that go bankrupt buying them with preferred shares on the chip so buying options on their future stock prices while getting huge returns on his money he's waiting he might wait another year five years ten years he doesn't care he knows that that will give the highest return on that 100 billion buying a company now okay if it's really a good one a complicated one like Sergio Paolo Lehmann injecting his knowledge into the company okay just buying something just to buy he doesn't do that and that's why the cash pile is huge so to conclude I'm still a fan of Buffett I really admire him but I think we should learn from what he is doing and not from what he's saying there is a big difference between Warren Buffett and Charlie Munger his partner Warren Buffett wants to be liked by people Charlie Munger doesn't care what you you or me think about him and therefore if you listen to Charlie his words are much heavier and carry much more truth Buffett wants to be liked by you and therefore he will say what you want to hear so that's very important so to learn okay listen to both of them but try to follow what they are doing and what they have been doing not so much what they are saying especially Buffett I'll be doing soon a video on Charlie Munger which is I think even better than Buffett because he tells the truth and that's what you want to learn you want to make money not feel good about your investments so thank you for watching click like if you like the content don't forget to subscribe if you haven't yet share this video with your friends if you think it can add value to them I'm looking forward to your comments any other lies that Buffett is saying or anybody else that you think is saying one thing and doing the other share it with us we are here to learn all together and create a community of investors thank you for watching again and I'll see you in the next video