In an interview that is sure to shake the pillars of Wall Street, billionaire investor Warren Buffett revealed to our crack reporter Kent Baleevit that he actually made his wealth from risky penny stocks and day trading. "C'mon, Kent ... long term value investing? Who has time for that crap? I'm an old man ... I need to make my money quick and get to the casino before the lines at the early-bird buffet get too long."

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Turning His Back on Value
Although Warren Buffett is one of the investors widely credited with popularizing long-term value investing, in point of fact he has long since abandoned that approach. "Here's the thing, Kent … I just got tired of waiting. Do you know how long it takes to make money from holding undervalued stocks?"

Apparently academic research played a significant role in Buffett's change of heart. Many academics have written papers that demonstrate that there is no system that can reliably beat the market, and that market-beating investors are just a statistical anomaly. This view has perhaps been best expressed in Burton Malkiel's book "A Random Walk Down Wall Street".

"See, Kent? I read these papers and these books and they made a really impressive case that it was just impossible to consistently beat the markets. They had a lot of stats and cool charts and everything. So, I looked at the billions and billions of dollars that I had, and the hundreds of thousands of dollar that they had, and decided that they must know something I didn't. So, I decided to abandon long-term value investing".

When asked if he had any plans to continue investing, the famous Omaha investor was practically ebullient. "Day trading, baby! It's exciting and these sites make it so easy. I mean, I just log on to read the news and there's a "Trade" button everywhere I look. And when I trade, it makes this cool sound … like the machine is happy. And if I trade a thousand times this month? I'll get to be in their Super-Duper Special Trader Club, and that will give me access to these software packages that I could just go out and buy for $100".

Making Dollars Out Of Pennies
Instead of buying giant boring companies and holding for decades, Buffett has thrown his lot in with the penny stocks. After all, those efficient market hypothesizers that proved that it's impossible to beat the market have based their case largely on information - the idea being that all that can be known about a big company is already known, but that it might be possible for lesser-known companies to have some outperformance potential. Not only that - at just pennies a share an investor can own hundreds of thousands of shares at a time.

On top of that, Buffett has discovered that there are some truly amazing opportunities in penny stocks. "Yeah, this one company? They're going to cure cancer. I called the CEO and he told me so himself. I did some research afterwards on Google and I didn't see any articles about it in Science or Nature, but the CEO assured me that those journals are just fronts for the hedge fund industry and his company had to keep all of the really interesting information to themselves or the pharmaco-industrial-media-complex would steal it all."

"Oh, and this other company? They know how to change your car's engine to run on water. And there's one here that can clean up pollution. And then there are these China companies. I don't really know what they do, but they're Chinese, so that has to work right? I mean, I know they don't have any auditors and they're actually headquartered in the Caymans, but I'm sure it's all fine. I mean, it's China!"

Day Trading - The Real Secret to Wealth?
Buffett has also apparently turned to day trading to supplement his income. Apparently, dozens of helpful millionaires log on to message boards every day just to help investors like him make more money. "Yeah, Kent, it's really cool. I read about all this money that people were making, and these systems that could double or triple my money in just a couple of weeks. So, I had to check it out, right?"

"Once I got to doing research online, it really just changed my life. There were all these guys talking about how they doubled their money in just a week and all I had to do was follow their picks and I could do the same. How awesome is that? I mean, I know there are all those newsletters out there that promise to double my money, but they charge money. And hey, I'm Warren-freaking-Buffett. I don't spend money if I don't have to, right? And besides, it's the internet … it must be true, right? I mean, I'm a billionaire and I never give any of my ideas away a minute sooner than I have to, but there's all of these rich people online just waiting to help you!".

On The Markets and Corporate Strategy
Buffett was not just going to talk about his new investment strategies. He also wanted to offer a few thoughts on the markets themselves and corporate policies. "Here's the thing … I know the market is rigged, but that's actually a good thing. I mean, I've never once lost money because I made any kind of mistake - it was just a conspiracy by shorts and journalists to bring down the stocks and hurt innocent investors like me. Once we stop them from exposing the problems these companies have and raising any kind of doubts whatsoever, all of those stocks will go right back up".

Turning to acquisitions, Buffett questioned why all of these companies are so active in mergers and acquisitions. "I don't see why these companies keep buying and selling these units. I mean, they're just enriching the bankers and amusing themselves, right?"

"I know I used to do deals, but I've sworn off of them now". When asked why he would stop such a successful strategy, he answered, "well, it's those academics again. I read some papers that said that deals don't add value and the markets are always efficient … so any sort of deal done at any premium has to be a bad move. Who was I going to believe? My own track record of value-building deals or a paper written by an academic who never had to meet a payroll in his life?"

The Bottom Line
To say the least, Buffett's newfound market wisdom is intriguing. After years of building incredible wealth with a very well-described and consistent strategy, Buffett has decided to believe those who lack the patience or ability to replicate the strategy and assert that it therefore cannot work. Likewise, this famous investor's embrace of modern investment strategies like day trading and penny stocks is sure to force a reevaluation of these neglected sectors.

Happy April Fool's Day from Financial Edge! This article was written for fun, and was not intended to offend or misinform.

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