Only When The Tide Goes Out

Buffett coined this phrase in his 2001 Berkshire Hathaway Chairman's Letter, in a section warning about weaknesses in the reinsurance industry — specifically that many reinsurers had been taking on risks far beyond their capital base during the boom years. The same letter explicitly addressed Enron's collapse and broader corporate misconduct, giving the metaphor its sharpest resonance: when a recession or crisis arrives, it exposes the companies that had been operating recklessly under cover of a rising market.