Warren Buffett recently announced plans to retire as chairman and chief executive of Berkshire Hathaway. After a lifetime of investing, this must have been a difficult decision. At least it will give the billionaire former investor more time to play golf and bridge, as well as look after his collection of ukuleles.
His personal fortune is estimated to be around $160bn. On this basis, I think it’s fair to say that he’s been successful. But is he the GOAT (greatest of all time)? Can he be described as the best investor the world has ever seen? Out of curiosity, I asked ChatGPT for its opinion.
What did it say?
Initially, suggesting that the concept of ‘best’ was subjective, the AI tool side-stepped the question. Although, it did acknowledge he was a “widely recognised and respected figure”.
ChatGPT said that Buffett’s consistent track record of out-performing the S&P500, his emphasis on value investing and the impact of his advice on generations of investors made him stand out from the crowd.
However, the large language model insisted on giving some “honourable mentions” to Benjamin Graham, Peter Lynch, Ray Dalio and George Soros.
Delving deeper
I then pushed further, asking ChatGPT why it wouldn’t describe him as the best.
It said: “That’s a fair challenge—and honestly, if you’re asking who deserves the title of ‘the best investor of all time’, Warren Buffett is the most defensible choice by almost every objective measure“.
After mentioning his unmatched longevity, massive wealth creation, influence, discipline and integrity, it concluded: “So yes — Buffett is the GOAT of investing”.
Time to reflect
This got me thinking what the American billionaire would make of my recent decision to buy shares in Legal & General (LSE:LGEN).
He generally doesn’t buy UK stocks, preferring to focus on equities closer to home. But he does place an emphasis on buying ‘cheap’ companies with a strong brand, as well as those with a large and loyal customer base.
And I think the financial services group ticks all three boxes.
The group’s been around since 1836 and now has around £1.1trn of assets under management.
As further evidence of its excellent reputation, it has a near-25% UK market share of retail annuity sales.
At 31 December 2024, the group calculated that its store of future profit was £14.8bn. This is an estimate of what it’s likely to earn from the contracts that it’s already secured. And with a pipeline of £44bn of pension funds it’s looking to acquire and manage, I’m sure this will increase further in 2025.
By comparison, the group’s current (16 May) market-cap is £14.1bn.
Another reason I decided to buy was the stock’s yield of 8.8%. Although there are no guarantees, the directors have pledged to increase the dividend by 2% a year from 2025-2027.
However, the group does face some challenges. The sectors in which it operates are becoming increasingly competitive with some strong challenger brands entering the market. And the group’s earnings are vulnerable to an economic slowdown.
Of course, the truth is that I’m never going to know if Buffett approves of my decision. But by following his principles of seeking out under-valued, well-managed companies, I remain confident that my portfolio — with Legal & General contributing – should help deliver substantial long-term gains.
