A surprising nomination is circulating in financial circles: Ryan Cohen, the CEO of GameStop, as the potential successor to Warren Buffett’s investment philosophy. Michael Burry, famed for his prescience in the 2008 financial crisis – chronicled in “The Big Short” – has publicly endorsed Cohen, suggesting the video game retailer’s leader embodies a similar approach to value investing and capital allocation as the legendary Berkshire Hathaway chairman.
Burry, who now publishes his investment insights on Substack, highlighted Cohen’s patience and long-term perspective during an early conversation in , after both investors had accumulated significant stakes in the then-struggling GameStop. Cohen reportedly demonstrated a willingness to accept extended timelines for investment returns, a hallmark of Buffett’s strategy. “I believed he possibly had the temperament to be the next Buffett, but I did not get to know him that well,” Burry wrote.
Embracing the Buffett Model
Cohen himself has openly acknowledged Buffett’s influence, citing the Berkshire Hathaway CEO as one of the “two biggest influences” on his professional life, alongside his father. He credits Buffett with instilling in him the ability to think independently, to be “greedy when others are fearful,” and to exercise discipline in capital allocation – core tenets of value investing.
This admiration translated into action after Cohen sold his stake in Chewy, the online pet supplies retailer he co-founded, in . He reportedly reinvested the proceeds – exceeding $3 billion – into two companies favored by Buffett: Apple and Wells Fargo. His subsequent foray into activist investing, taking a stake in GameStop in and securing a board seat in , further cemented his reputation as a contrarian investor willing to bet against prevailing market sentiment.
While the GameStop investment became synonymous with the “meme stock” phenomenon of , briefly inflating the retailer’s market capitalization to $34 billion – a figure now roughly tripled – Burry argues Cohen’s approach extends beyond capitalizing on short squeezes. He points to Cohen’s appointment as GameStop’s CEO in and subsequent moves as evidence of a broader, Buffett-inspired strategy.
Notably, Cohen has signaled ambitions to transform GameStop into a diversified holding company, similar to Berkshire Hathaway. He secured board approval in to invest in other companies’ stock, and has taken control of GameStop’s securities portfolio. The company’s investor relations webpage has even been redesigned to mimic the famously minimalist aesthetic of Berkshire Hathaway’s website.
Cohen’s commitment to frugality also echoes Buffett’s principles. He currently forgoes a salary, mirroring Buffett’s decades-long practice of receiving a modest $100,000 annual salary as Berkshire’s CEO. Cohen maintains a substantial personal stake in GameStop, holding roughly 9% of the company’s shares, aligning his interests with those of other shareholders – a practice Buffett also exemplifies with his significant holdings in Berkshire Hathaway.
Big-Game Hunters
Buffett’s success with Berkshire Hathaway has been built on acquiring businesses with strong fundamentals and allowing them to operate with a high degree of autonomy, while strategically allocating capital between subsidiaries and external investments. He also benefited from the “float” generated by Berkshire’s insurance operations – the cash held between premium collection and claim payments – which provided a readily available source of funding for acquisitions.
Cohen appears to be pursuing a similar strategy with GameStop, amassing a substantial cash reserve – approximately $9 billion as of – through a series of share offerings and debt issuances. He has publicly stated his intention to pursue a “transformational” acquisition, aiming to increase GameStop’s market value to over $100 billion and achieve $10 billion in annual adjusted profits.
Burry has proposed a potential acquisition strategy for GameStop, suggesting targets like ADT, Wayfair, and Assured Guaranty. He envisions a scenario where GameStop acquires these businesses and operates as a diversified holding company, generating excess capital for further investment – an approach he terms “Instant Berkshire.”
Burry has recently increased his own stake in GameStop, citing the stock’s attractive valuation and Cohen’s potential. He believes the company offers “tremendous optionality” in a market filled with overvalued assets. GameStop’s shares currently trade near its tangible asset value, making it, in Burry’s view, a relatively low-risk investment.
‘Tremendous Optionality’
While acknowledging Cohen’s promising track record, finance professor David Kass of the University of Maryland suggests he has the potential to follow a similar game plan to Buffett. However, Larry Cunningham, author and director of the University of Delaware’s Weinberg Center, cautions against expecting a perfect replication of Buffett’s success, citing the unique combination of temperament, discipline, structure, and historical circumstances that contributed to his extraordinary career.
Burry, a longtime admirer of Buffett himself, recognizes the difficulty of the comparison. Nevertheless, he believes Cohen is uniquely positioned to pursue a similar path, stating, “Just about every investor that knows Buffett’s story well has thought of doing something like this. I believe What we have is the first time someone is poised to do it — and is doing it in a most unusual and fairly ingenious way.”
