Unofficial blog tracking Warren Buffett's investment decisions, commentary and wisdom
Friday, February 12, 2010
Thursday, February 11, 2010
Tuesday, February 9, 2010
Taxpayers Will Get Bailout Money Back
Henry Paulson, the former Treasury chief, and billionaire Warren Buffett said taxpayers will recover every cent paid out to banks during the economic meltdown and may even turn a profit.
The staunch Democrat investor and the Treasury secretary under President George W. Bush spoke onstage Tuesday before 2,400 at the Greater Omaha Chamber of Commerce's annual meeting.
Paulson in his recently released book defended the government which scrambled to prevent failing U.S. banks from dragging down the global economy with them.
"As bad as this is, when we look back it's not as bad as it could have been," Paulson said.
And he said the United States is better off today than most countries.
"Every other major economy has many more significant challenges than we do," Paulson said. But he said several significant challenges remain.
Paulson said he thinks compensation is normally out of whack on Wall Street, but now in the wake of all the government bailouts, many executive pay packages are excessive.
"I think today restraint is very much in order for the top people," Paulson said.
Paulson's 500-page book, "On the Brink: Inside the Race to Stop the Collapse of the Global Financial System," offers a chronological account of the rush to prevent an economic disaster as Lehman Brothers and American International Group spun toward collapse in September 2008. Paulson served as treasury secretary from June 2006 to January 2009.
Buffett led the talk by asking Paulson about the book but didn't make many comments himself.
Buffett said Paulson's book gave him an appreciation of how well former President George W. Bush understood the economy and events during the crisis.
"Through the book, I gained more appreciation for what he did in this situation," Buffett said.
But Buffett, the longtime Democrat, also pointed out Paulson's positive statements about President Barack Obama.
Buffett praised the actions of Paulson, Federal Reserve Chairman Ben Bernanke and Paulson's successor, Treasury Secretary Timothy Geithner.
Paulson also thanked Buffett, an icon to thousands of investors, who advised the former Treasury chief during the worst days of the economic downturn.
"He was a real source of strength during the financial crisis," Paulson said.
source: associated press
The staunch Democrat investor and the Treasury secretary under President George W. Bush spoke onstage Tuesday before 2,400 at the Greater Omaha Chamber of Commerce's annual meeting.
Paulson in his recently released book defended the government which scrambled to prevent failing U.S. banks from dragging down the global economy with them.
"As bad as this is, when we look back it's not as bad as it could have been," Paulson said.
And he said the United States is better off today than most countries.
"Every other major economy has many more significant challenges than we do," Paulson said. But he said several significant challenges remain.
Paulson said he thinks compensation is normally out of whack on Wall Street, but now in the wake of all the government bailouts, many executive pay packages are excessive.
"I think today restraint is very much in order for the top people," Paulson said.
Paulson's 500-page book, "On the Brink: Inside the Race to Stop the Collapse of the Global Financial System," offers a chronological account of the rush to prevent an economic disaster as Lehman Brothers and American International Group spun toward collapse in September 2008. Paulson served as treasury secretary from June 2006 to January 2009.
Buffett led the talk by asking Paulson about the book but didn't make many comments himself.
Buffett said Paulson's book gave him an appreciation of how well former President George W. Bush understood the economy and events during the crisis.
"Through the book, I gained more appreciation for what he did in this situation," Buffett said.
But Buffett, the longtime Democrat, also pointed out Paulson's positive statements about President Barack Obama.
Buffett praised the actions of Paulson, Federal Reserve Chairman Ben Bernanke and Paulson's successor, Treasury Secretary Timothy Geithner.
Paulson also thanked Buffett, an icon to thousands of investors, who advised the former Treasury chief during the worst days of the economic downturn.
"He was a real source of strength during the financial crisis," Paulson said.
source: associated press
Dairy Queen To Expand
International Dairy Queen, the ice cream retailer owned by Warren Buffett's Berkshire Hathaway Inc (BRKa.N) (BRKb.N), said on Tuesday that it planned in 2010 to open its first stores in Egypt and Macau.
Dairy Queen said Egyptian-run Boraie Development would open the first DQ Grill & Chill restaurant in Cairo this summer. It said there was "potential" to open 40 to 50 restaurants in four or five additional Egyptian cities.
The company also said the Hon Hoi Group (International) Co planned to open a Dairy Queen in Macau this spring and a second location in the region later this year. It said Hon Hoi operates restaurants in Macau, China and Canada.
Based in Minneapolis, Dairy Queen said it had more than 5,700 stores in 19 countries, including 652 locations outside the United States and Canada.
Berkshire bought Dairy Queen in 1998. Buffett, 79, is the world's second-richest person, and habitually snacks on a $1 Dairy Queen dessert prior to Berkshire's annual meetings on Saturday mornings in its Omaha, Nebraska, hometown.
source: reuters
Monday, February 8, 2010
Sunday, February 7, 2010
The Tao of Buffett
Mary Buffett, who was married to Warren's son Peter for 12 years, has captured the essence of the Omaha native in several books, which she's written with co-author David Clark. Their latest, The Tao of Buffett, includes 125 Buffettesque quotes along with brief explanations. Alas, these quotes offer no sure route to billionaire-dom. Warren advises wannabes to understand their investments and find great deals. But if his words of wisdom often sound suspiciously like common sense, at least they are delivered in his trademark style.
Mary Buffett spoke to Forbes.com about patience, discipline and Warren Buffett's pleasure dome.
Forbes.com: What's the most important lesson you've learned from Warren Buffett?
Mary Buffett: Patience and discipline. And doing something you love. So many people--and Warren has said this--are doing it for the money. That's really not the right reason. If you're doing something you love, you're more likely to put your all into it, and that generally equates to making money. He always says when he gets up in the morning he goes to his pleasure dome, which is his office.
A lot of people read books like this because they want to learn from gurus. But they ignore the fact that smart investing really requires a lot of hard work and research. Just absorbing The Tao Of Buffett won't make you a good investor.
Yes and no. I think if you follow the principles of the Tao of Buffet you can be a good investor. But investors don't necessarily have the patience to wait for the great company with the great underlying economics at the right price. When Warren bought Dairy Queen, I joked, "He probably wanted to buy it when he was eight years old, but it wasn't the right price." So he waited 50 years or so.
Can you recommend any investing-related New Year's resolutions?
I wouldn't recommend anything. Of course, I'd always recommend Berkshire Hathaway as a great investment because it's an unbelievably diversified company. I guess I would just say if you're investing in something, invest in it as if you were buying the whole company. Look at historically what its earnings have been. And have a fair amount of ability to predict what that company will do in the future.
Let's talk about the words of wisdom in your book. I like No. 44: The smarter the journalists are, the better off society is.
It's true. I mean, all of our information that we get now, whether it's for investment ideas or just the morality of life comes from the media. So we're really dependent on journalists for accuracy, and for the analysis of what's going on. You want intelligent people doing the job.
You say that investors shouldn't take risks when they're young. That seems counterintuitive. When should you take risks?
Never. I would say people that are young generally take more risks than people who are experienced. But that's something that even Warren as a child really started to evaluate. Predictable products equal predictable earnings. So you know, for instance, that if the stock market dropped tomorrow people would still be drinking Coca-Cola, people would still be shaving, people would still be chewing gum. Warren says, "I don't think the Internet is going to change how people chew gum." He looks for businesses that he can predict where they'll be in 10 or 15 years.
You also quote Warren saying he never gets good ideas talking to people. So where do they come from? Thin air?
He says, "My idea of a group decision is to look in the mirror." He has a history of standing alone that dates back to the early days of his investments. Living in Omaha instead of New York, I think he has less influence from Wall Street than other people. Most of the stocks of the companies he's bought, he bought when no one wanted them. If he had taken advice from Wall Street, he would have missed some of the greatest investments.
He also says, "If we can't find things within our circle of competence, we don't expand the circle. We wait."
Warren believes that if he doesn't understand a business, it's not worth looking at it, even if the business is popular at the time. If he can't find an investment that's selling at an attractive price, he'll wait and wait and wait. In the late 1960s he wrote to his investing partners that he couldn't find any investments that he understood at attractive prices. He waited until 1973 when the stock market collapsed and some of the best companies were selling at bargain prices. Pick the wrong company at the right price and you lose. Pick the right company at the wrong price and you lose. You have to pick the right company at the right price and to do that you have to wait and wait--patiently.
Saturday, February 6, 2010
Buffett Tells Hog-Product Staff They’re on Farming Superhighway
Warren Buffett, the billionaire chairman of Berkshire Hathaway Inc., told employees of the firm’s hog-products unit he expects the operation to expand for decades.
“CTB has been moving ahead every year since we bought it,” Buffett said in a video posted on the Web site of CTB Inc., Omaha, Nebraska-based Berkshire’s agriculture-equipment unit. “We’ll hit a bump in the road every now and then but we’re looking at a superhighway out there in front of us.”
Buffett became the second-richest American by investing in businesses he expects to grow for decades. He’s said his $26 billion takeover of railroad Burlington Northern Santa Fe Corp., announced in November, will benefit Berkshire “over the next century.” CTB, which Berkshire bought in 2002, may produce profits beyond the year 2200, Buffett, 79, said in the video.
“Most years are going to be good, a few years will be standouts, and there will be a few that are bummers,” Buffett said. “But that’s the way we look at everything here at Berkshire Hathaway. We’re going to be in these businesses for 100 years or 200 years.”
CTB, which sells feeders and stalls under the PigTek and Chore-Time Hog brands, has expanded abroad by buying businesses in Israel, Germany and the Netherlands. Chief Executive Officer Victor Mancinelli persuaded Buffett to buy his firm. Howard Buffett, a farmer and the billionaire’s son, endorsed the deal.
Good Things
“I checked with Howie; he told me CTB was an absolute first-class company and he’d heard good things about Vic,” Buffett said. “Howie would rather spend an evening on a tractor in the field than a date with Angelina Jolie, which is not true of all members of the family, but that’s true of Howie.”
Howard Buffett has been picked to succeed his father as Berkshire’s chairman when Warren Buffett’s tenure, entering its fifth decade, comes to a close. The elder Buffett, who owns about a quarter of Berkshire and is its CEO, has said settling on his eventual replacement as chief is the No. 1 responsibility of the firm’s board.
In the CTB video, Buffett praised Mancinelli. “Vic is a manager that could run any company in the Fortune 500,” Buffett said. “He’s done a wonderful job for us.”
U.S. hog farmers have shrunk the size of sow herds to the smallest since at least 1976, as feed prices jumped to a record in 2008 and the recession and an outbreak of swine flu sapped pork demand in 2009.
‘Year After Year’
“There will be low prices and there will be high prices,” Buffett said. “But the one thing you can be sure about is that our industry is going to be there year after year after year.”
Berkshire’s acquisition of CTB was valued at $177 million, according to Bloomberg data. Six years later, in 2008, the unit produced pretax earnings of $89 million, Buffett said in the company’s 2009 annual letter. CTB bought six companies in the interim, including Swine Services Specialists Inc. and Porcon group of Deurne, the Netherlands.
“The CTB story is just starting,” Buffett said. “I am 79 so I’ll be 100 in 2030. Stay tuned for a rebroadcast at that time and I’ll be telling you about all kinds of wonderful things that have happened in the company. It’s in the right industry. Farming is as fundamental as things get in this country.”
source: bloomberg, warren buffett
“CTB has been moving ahead every year since we bought it,” Buffett said in a video posted on the Web site of CTB Inc., Omaha, Nebraska-based Berkshire’s agriculture-equipment unit. “We’ll hit a bump in the road every now and then but we’re looking at a superhighway out there in front of us.”
Buffett became the second-richest American by investing in businesses he expects to grow for decades. He’s said his $26 billion takeover of railroad Burlington Northern Santa Fe Corp., announced in November, will benefit Berkshire “over the next century.” CTB, which Berkshire bought in 2002, may produce profits beyond the year 2200, Buffett, 79, said in the video.
“Most years are going to be good, a few years will be standouts, and there will be a few that are bummers,” Buffett said. “But that’s the way we look at everything here at Berkshire Hathaway. We’re going to be in these businesses for 100 years or 200 years.”
CTB, which sells feeders and stalls under the PigTek and Chore-Time Hog brands, has expanded abroad by buying businesses in Israel, Germany and the Netherlands. Chief Executive Officer Victor Mancinelli persuaded Buffett to buy his firm. Howard Buffett, a farmer and the billionaire’s son, endorsed the deal.
Good Things
“I checked with Howie; he told me CTB was an absolute first-class company and he’d heard good things about Vic,” Buffett said. “Howie would rather spend an evening on a tractor in the field than a date with Angelina Jolie, which is not true of all members of the family, but that’s true of Howie.”
Howard Buffett has been picked to succeed his father as Berkshire’s chairman when Warren Buffett’s tenure, entering its fifth decade, comes to a close. The elder Buffett, who owns about a quarter of Berkshire and is its CEO, has said settling on his eventual replacement as chief is the No. 1 responsibility of the firm’s board.
In the CTB video, Buffett praised Mancinelli. “Vic is a manager that could run any company in the Fortune 500,” Buffett said. “He’s done a wonderful job for us.”
U.S. hog farmers have shrunk the size of sow herds to the smallest since at least 1976, as feed prices jumped to a record in 2008 and the recession and an outbreak of swine flu sapped pork demand in 2009.
‘Year After Year’
“There will be low prices and there will be high prices,” Buffett said. “But the one thing you can be sure about is that our industry is going to be there year after year after year.”
Berkshire’s acquisition of CTB was valued at $177 million, according to Bloomberg data. Six years later, in 2008, the unit produced pretax earnings of $89 million, Buffett said in the company’s 2009 annual letter. CTB bought six companies in the interim, including Swine Services Specialists Inc. and Porcon group of Deurne, the Netherlands.
“The CTB story is just starting,” Buffett said. “I am 79 so I’ll be 100 in 2030. Stay tuned for a rebroadcast at that time and I’ll be telling you about all kinds of wonderful things that have happened in the company. It’s in the right industry. Farming is as fundamental as things get in this country.”
source: bloomberg, warren buffett
Thursday, February 4, 2010
Selling $8 billion Notes to Finance BNI Purchase
Berkshire Hathaway Inc. is selling an $8 billion offering of senior secured notes to help finance its takeover of Burlington Northern Santa Fe Corp.
source: wall street journal, warren buffett
source: wall street journal, warren buffett
Berkshire Hathaway Downgraded
Standard & Poor downgraded its long-term counterparty credit rating on Berkshire Hathaway to AA+ from AAA on the firm's impending acquisition of Burlington Northern Santa Fe Corp. The outlook is stable.
"The rating actions are based on our view that Berkshire's overall capital adequacy, as well as that of its insurance operations, has weakened to levels no longer consistent with a 'AAA' rating and is not expected to return to extremely strong levels in the near term," said John Iten, an S&P credit analyst, in a statement.
"The rating actions are based on our view that Berkshire's overall capital adequacy, as well as that of its insurance operations, has weakened to levels no longer consistent with a 'AAA' rating and is not expected to return to extremely strong levels in the near term," said John Iten, an S&P credit analyst, in a statement.
Wednesday, February 3, 2010
BYD Auto Invests In Solar
Chinese car and battery maker BYD Co Ltd, 10 percent owned by US billionaire Warren Buffett's Berkshire Hathaway, will invest 22.5bn yuan($3.3 billion) over five years to build China's largest solar power battery plant.
Monday, February 1, 2010
My $650,100 Lunch with Warren Buffett
What would you pay to have lunch with the richest man in the world? For me and Mohnish Pabrai — a friend who, like me, runs a U.S.-based investment fund — the answer is $650,100. That's how much we forked out for the privilege of dining with Warren Buffett on June 25.
It was worth every dime. Buffett is the most successful investor in history, yet he has reached that pinnacle while also being supremely ethical. As remarkable for his philanthropy as for his stock-picking, he's giving the bulk of his billions to the Bill & Melinda Gates Foundation; likewise, the fee for our lunch would go to the Glide Foundation, which helps the poor and homeless. Lunch with Buffett, we figured, would be a good way to give to charity, but it would also be the ultimate capitalist master class — a chance to see up close what makes the Sage of Omaha tick and to learn from his wisdom.
And so it was that my wife and I sat down for lunch with Buffett in a cozy, wood-paneled alcove of the Manhattan steakhouse Smith & Wollensky. Mohnish brought along his wife and two daughters, who sat on either side of Buffett. When the menus arrived, Buffett, now 77 years old, joked with the girls that he doesn't eat anything he wouldn't touch when he was less than 5. His order: a medium-rare steak with hash browns and a cherry coke — a fitting choice, given that his company, Berkshire Hathaway, is Coca-Cola's largest shareholder.
Characteristically, Buffett had done his homework: he'd found out in advance, for example, that my wife was born in Salisbury, North Carolina. But after a minimum of small talk to put us at ease, it was down to more serious matters. When I mentioned how difficult I'd recently found it to do the right thing by lowering the fees I charged my fund's shareholders, Buffett nodded sympathetically and observed, "People will always try to stop you doing the right thing if it is unconventional." When I asked if it would get any easier, he replied with a wry smile: "Just a little."
Buffett has made a point of doing business with integrity — and of working only with people who share his values. As we learned, he credits his father with teaching him early on to rely on his own sense of what's right, rather than looking for affirmation from others. "It's very important to live your life by an internal yardstick," he told us, noting that one way to gauge whether or not you do so is to ask the following question: "Would you rather be considered the best lover in the world and know privately that you're the worst — or would you prefer to know privately that you're the best lover in the world, but be considered the worst?"
When it comes to investing, nothing is more important than the ability to think rationally for oneself — and Buffett is unsurpassed on this front. In the late '90s, he was criticized for his refusal to invest in booming tech and Internet stocks — a decision that was vindicated when the bubble burst. Buffett has made a fine art of keeping this kind of distracting noise at bay: he said he even limits his contact with managers of businesses in which he invests, preferring to assess their companies' financial records — a more neutral source of information. Equally vital to his success, Buffett said he focuses only on investments that lie well within his "circle of competence." As a result, he confided, whenever he makes an investment, he has no doubt at all that he's right.
For most people, attaining the intellectual clarity and emotional detachment that investing requires is tough. But Buffett, for all his affability, is shrewd about disengaging himself to avoid any unnecessary distractions that might impair his judgment. People often try to convince him to meet with them so they can pitch investments to him, he said, but he sees through their many ruses — not least their flattery — and is comfortable saying no far more often than he says yes.
One thing Buffett wasn't about to say no to was dessert. He delighted in sampling an array of them, telling the waiter: "Just bring a couple of spoons, and I'll have a little of everyone's." His zest for life is clearly undiminished — indeed, in Berkshire's latest annual report, he wrote that he and his octogenarian partner Charlie Munger "tap-dance to work."
What better role model could you ask for than this? And how do you put a price on the opportunity to spend nearly three hours in his company? Well, two days after our meal, the auction closed on eBay for next year's lunch with Buffett. The winner, a Chinese money manager named Zhao Danyang, bid $2.1 million. So, that proves it: our $650,100 lunch was a total bargain.
Guy Spier is CEO of Aquamarine Capital Management
source: time, warren buffett
It was worth every dime. Buffett is the most successful investor in history, yet he has reached that pinnacle while also being supremely ethical. As remarkable for his philanthropy as for his stock-picking, he's giving the bulk of his billions to the Bill & Melinda Gates Foundation; likewise, the fee for our lunch would go to the Glide Foundation, which helps the poor and homeless. Lunch with Buffett, we figured, would be a good way to give to charity, but it would also be the ultimate capitalist master class — a chance to see up close what makes the Sage of Omaha tick and to learn from his wisdom.
And so it was that my wife and I sat down for lunch with Buffett in a cozy, wood-paneled alcove of the Manhattan steakhouse Smith & Wollensky. Mohnish brought along his wife and two daughters, who sat on either side of Buffett. When the menus arrived, Buffett, now 77 years old, joked with the girls that he doesn't eat anything he wouldn't touch when he was less than 5. His order: a medium-rare steak with hash browns and a cherry coke — a fitting choice, given that his company, Berkshire Hathaway, is Coca-Cola's largest shareholder.
Characteristically, Buffett had done his homework: he'd found out in advance, for example, that my wife was born in Salisbury, North Carolina. But after a minimum of small talk to put us at ease, it was down to more serious matters. When I mentioned how difficult I'd recently found it to do the right thing by lowering the fees I charged my fund's shareholders, Buffett nodded sympathetically and observed, "People will always try to stop you doing the right thing if it is unconventional." When I asked if it would get any easier, he replied with a wry smile: "Just a little."
Buffett has made a point of doing business with integrity — and of working only with people who share his values. As we learned, he credits his father with teaching him early on to rely on his own sense of what's right, rather than looking for affirmation from others. "It's very important to live your life by an internal yardstick," he told us, noting that one way to gauge whether or not you do so is to ask the following question: "Would you rather be considered the best lover in the world and know privately that you're the worst — or would you prefer to know privately that you're the best lover in the world, but be considered the worst?"
When it comes to investing, nothing is more important than the ability to think rationally for oneself — and Buffett is unsurpassed on this front. In the late '90s, he was criticized for his refusal to invest in booming tech and Internet stocks — a decision that was vindicated when the bubble burst. Buffett has made a fine art of keeping this kind of distracting noise at bay: he said he even limits his contact with managers of businesses in which he invests, preferring to assess their companies' financial records — a more neutral source of information. Equally vital to his success, Buffett said he focuses only on investments that lie well within his "circle of competence." As a result, he confided, whenever he makes an investment, he has no doubt at all that he's right.
For most people, attaining the intellectual clarity and emotional detachment that investing requires is tough. But Buffett, for all his affability, is shrewd about disengaging himself to avoid any unnecessary distractions that might impair his judgment. People often try to convince him to meet with them so they can pitch investments to him, he said, but he sees through their many ruses — not least their flattery — and is comfortable saying no far more often than he says yes.
One thing Buffett wasn't about to say no to was dessert. He delighted in sampling an array of them, telling the waiter: "Just bring a couple of spoons, and I'll have a little of everyone's." His zest for life is clearly undiminished — indeed, in Berkshire's latest annual report, he wrote that he and his octogenarian partner Charlie Munger "tap-dance to work."
What better role model could you ask for than this? And how do you put a price on the opportunity to spend nearly three hours in his company? Well, two days after our meal, the auction closed on eBay for next year's lunch with Buffett. The winner, a Chinese money manager named Zhao Danyang, bid $2.1 million. So, that proves it: our $650,100 lunch was a total bargain.
Guy Spier is CEO of Aquamarine Capital Management
source: time, warren buffett
Sunday, January 31, 2010
Upbeat About America's Future
Our economic system has worked extraordinarily well over time. It has unleashed human potential as no other system has, and it will continue to do so.
source: forbes, warren buffett
source: forbes, warren buffett
Raises stake in Munich Re to 5%
Warren Buffett has raised his holding in Munich Re, the world's leading re-insurance company, a statement to financial markets said on Thursday.
Buffett now owns directly or indirectly more than five percent of the voting rights in Munich Re, after taking options on 1.945 percent of its capital in addition to a previous stake of 3.08 percent.
source: afp, warren buffett
Buffett now owns directly or indirectly more than five percent of the voting rights in Munich Re, after taking options on 1.945 percent of its capital in addition to a previous stake of 3.08 percent.
source: afp, warren buffett
Friday, January 29, 2010
Berkshire is undervalued
“You can certainly say that Berkshire is undervalued by 30 per cent or 40 per cent. That undervaluation adds an attractive margin of safety at this point in the market cycle. ”
— Larry Coates, manager of the Oak Value Fund
— Larry Coates, manager of the Oak Value Fund
Thursday, January 28, 2010
Top 10 paradoxes of Warren Buffett
Warren Buffett is different from the rest of the super-rich in many ways, large and small.
He makes investment sound simple and has a talent for explaining it to the public.
But, as his biographer, Alice Schroeder says in BBC Two's 'The World's Greatest Money Maker: Evan Davis meets Warren Buffett', his method is "simple, but it's not easy".
There's more to the billionaire investor than meets the eye. However simple he'd like to make earning $40bn (£25bn) look, the Buffett story isn't entirely straightforward.
Here are 10 paradoxes that could offer an insight:
1. Mr Buffett has managed to make more money than other investors by being less ambitious. While Wall Street whizz kids set their sights on high returns, using leverage, Mr Buffett's steady annual compounding of increases, avoiding debt, has worked better.
2. Mr Buffett uses a conservative approach to picking investments - "don't lose money" is one of his favourite rules. But much of his cash comes from insurance companies that specialise in very high risk events - catastrophe insurance.
3. Mr Buffett is famous for his analytical study of the figures and unemotional response to the market. And yet among his greatest assets are his personality and reputation - both unquantifiable - and the trust they engender in potential business partners.
4. Extremely cautious with money, Mr Buffett is nevertheless happy to make "big bets" when he likes a company or a share. Unlike most investors, he believes that, for professionals at least, diversifying one's investments only means including among them, second rate choices.
5. He has come a long way in his life, but still lives within a mile or two of where he was born.
6. Mr Buffett has made more money than almost everyone, but appears to have no use for it personally - except for the single indulgence of his private jet, which he called "The Indefensible".
7. The most acquisitive man in the world is also one of the most philanthropic. Three years ago, Mr Buffett announced he was giving away the bulk of his fortune to charity, including $31bn to the Bill and Melinda Gates Foundation.
8. Mr Buffett says he has "no strategy" for Berkshire Hathaway, and yet he puts endless time and energy into communicating his ideas about markets and how to run businesses.
9. The man who is famous for a simple, down-to-earth approach to money-making has been chairman of investment bank Salomon Brothers, has a huge investment in another, Goldman Sachs, and trades in currency and derivatives.
10. Mr Buffett is one of the world's best-known business people, and yet he has no use for marketing or promotion of his business, Berkshire Hathaway.
source: bbc news, warren buffett
He makes investment sound simple and has a talent for explaining it to the public.
But, as his biographer, Alice Schroeder says in BBC Two's 'The World's Greatest Money Maker: Evan Davis meets Warren Buffett', his method is "simple, but it's not easy".
There's more to the billionaire investor than meets the eye. However simple he'd like to make earning $40bn (£25bn) look, the Buffett story isn't entirely straightforward.
Here are 10 paradoxes that could offer an insight:
1. Mr Buffett has managed to make more money than other investors by being less ambitious. While Wall Street whizz kids set their sights on high returns, using leverage, Mr Buffett's steady annual compounding of increases, avoiding debt, has worked better.
2. Mr Buffett uses a conservative approach to picking investments - "don't lose money" is one of his favourite rules. But much of his cash comes from insurance companies that specialise in very high risk events - catastrophe insurance.
3. Mr Buffett is famous for his analytical study of the figures and unemotional response to the market. And yet among his greatest assets are his personality and reputation - both unquantifiable - and the trust they engender in potential business partners.
4. Extremely cautious with money, Mr Buffett is nevertheless happy to make "big bets" when he likes a company or a share. Unlike most investors, he believes that, for professionals at least, diversifying one's investments only means including among them, second rate choices.
5. He has come a long way in his life, but still lives within a mile or two of where he was born.
6. Mr Buffett has made more money than almost everyone, but appears to have no use for it personally - except for the single indulgence of his private jet, which he called "The Indefensible".
7. The most acquisitive man in the world is also one of the most philanthropic. Three years ago, Mr Buffett announced he was giving away the bulk of his fortune to charity, including $31bn to the Bill and Melinda Gates Foundation.
8. Mr Buffett says he has "no strategy" for Berkshire Hathaway, and yet he puts endless time and energy into communicating his ideas about markets and how to run businesses.
9. The man who is famous for a simple, down-to-earth approach to money-making has been chairman of investment bank Salomon Brothers, has a huge investment in another, Goldman Sachs, and trades in currency and derivatives.
10. Mr Buffett is one of the world's best-known business people, and yet he has no use for marketing or promotion of his business, Berkshire Hathaway.
source: bbc news, warren buffett
No New Shares Will Be Issued When Entering S&P
Berkshire does not intend to issue any additional shares of its common stock other than the common stock it will issue upon the completion of the previously announced acquisition of BNSF.
source: thestreet, warren buffett
source: thestreet, warren buffett
Warren Buffett Quotes
A public-opinion poll is no substitute for thought.
Warren Buffett
Beware of geeks bearing formulas.
Warren Buffett
Chains of habit are too light to be felt until they are too heavy to be broken.
Warren Buffett
Derivatives are financial weapons of mass destruction.
Warren Buffett
I always knew I was going to be rich. I don't think I ever doubted it for a minute.
Warren Buffett
I am quite serious when I say that I do not believe there are, on the whole earth besides, so many intensified bores as in these United States. No man can form an adequate idea of the real meaning of the word, without coming here.
Warren Buffett
I buy expensive suits. They just look cheap on me.
Warren Buffett
I don't look to jump over 7-foot bars: I look around for 1-foot bars that I can step over.
Warren Buffett
I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years.
Warren Buffett
If a business does well, the stock eventually follows.
Warren Buffett
If past history was all there was to the game, the richest people would be librarians.
Warren Buffett
In the business world, the rearview mirror is always clearer than the windshield.
Warren Buffett
It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently.
Warren Buffett
It's better to hang out with people better than you. Pick out associates whose behavior is better than yours and you'll drift in that direction.
Warren Buffett
It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.
Warren Buffett
Let blockheads read what blockheads wrote.
Warren Buffett
Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it.
Warren Buffett
Of the billionaires I have known, money just brings out the basic traits in them. If they were jerks before they had money, they are simply jerks with a billion dollars.
Warren Buffett
Only buy something that you'd be perfectly happy to hold if the market shut down for 10 years.
Warren Buffett
Only when the tide goes out do you discover who's been swimming naked.
Warren Buffett
Our favorite holding period is forever.
Warren Buffett
Price is what you pay. Value is what you get.
Warren Buffett
Risk comes from not knowing what you're doing.
Warren Buffett
Risk is a part of God's game, alike for men and nations.
Warren Buffett
Rule No.1: Never lose money. Rule No.2: Never forget rule No.1.
Warren Buffett
Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks.
Warren Buffett
Someone's sitting in the shade today because someone planted a tree a long time ago.
Warren Buffett
The business schools reward difficult complex behavior more than simple behavior, but simple behavior is more effective.
Warren Buffett
The first rule is not to lose. The second rule is not to forget the first rule.
Warren Buffett
The investor of today does not profit from yesterday's growth.
Warren Buffett
The only time to buy these is on a day with no "y" in it.
Warren Buffett
The smarter the journalists are, the better off society is. For to a degree, people read the press to inform themselves-and the better the teacher, the better the student body.
Warren Buffett
There seems to be some perverse human characteristic that likes to make easy things difficult.
Warren Buffett
Time is the friend of the wonderful company, the enemy of the mediocre.
Warren Buffett
Value is what you get.
Warren Buffett
Wall Street is the only place that people ride to in a Rolls Royce to get advice from those who take the subway.
Warren Buffett
We believe that according the name 'investors' to institutions that trade actively is like calling someone who repeatedly engages in one-night stands a 'romantic.'
Warren Buffett
We enjoy the process far more than the proceeds.
Warren Buffett
We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.
Warren Buffett
When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact.
Warren Buffett
When you combine ignorance and leverage, you get some pretty interesting results.
Warren Buffett
Why not invest your assets in the companies you really like? As Mae West said, "Too much of a good thing can be wonderful".
Warren Buffett
Wide diversification is only required when investors do not understand what they are doing.
Warren Buffett
You do things when the opportunities come along. I've had periods in my life when I've had a bundle of ideas come along, and I've had long dry spells. If I get an idea next week, I'll do something. If not, I won't do a damn thing.
Warren Buffett
You only have to do a very few things right in your life so long as you don't do too many things wrong.
Warren Buffett
Your premium brand had better be delivering something special, or it's not going to get the business.
Warren Buffett
source: brainyquotes, warren buffett
Warren Buffett
Beware of geeks bearing formulas.
Warren Buffett
Chains of habit are too light to be felt until they are too heavy to be broken.
Warren Buffett
Derivatives are financial weapons of mass destruction.
Warren Buffett
I always knew I was going to be rich. I don't think I ever doubted it for a minute.
Warren Buffett
I am quite serious when I say that I do not believe there are, on the whole earth besides, so many intensified bores as in these United States. No man can form an adequate idea of the real meaning of the word, without coming here.
Warren Buffett
I buy expensive suits. They just look cheap on me.
Warren Buffett
I don't look to jump over 7-foot bars: I look around for 1-foot bars that I can step over.
Warren Buffett
I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years.
Warren Buffett
If a business does well, the stock eventually follows.
Warren Buffett
If past history was all there was to the game, the richest people would be librarians.
Warren Buffett
In the business world, the rearview mirror is always clearer than the windshield.
Warren Buffett
It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently.
Warren Buffett
It's better to hang out with people better than you. Pick out associates whose behavior is better than yours and you'll drift in that direction.
Warren Buffett
It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.
Warren Buffett
Let blockheads read what blockheads wrote.
Warren Buffett
Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it.
Warren Buffett
Of the billionaires I have known, money just brings out the basic traits in them. If they were jerks before they had money, they are simply jerks with a billion dollars.
Warren Buffett
Only buy something that you'd be perfectly happy to hold if the market shut down for 10 years.
Warren Buffett
Only when the tide goes out do you discover who's been swimming naked.
Warren Buffett
Our favorite holding period is forever.
Warren Buffett
Price is what you pay. Value is what you get.
Warren Buffett
Risk comes from not knowing what you're doing.
Warren Buffett
Risk is a part of God's game, alike for men and nations.
Warren Buffett
Rule No.1: Never lose money. Rule No.2: Never forget rule No.1.
Warren Buffett
Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks.
Warren Buffett
Someone's sitting in the shade today because someone planted a tree a long time ago.
Warren Buffett
The business schools reward difficult complex behavior more than simple behavior, but simple behavior is more effective.
Warren Buffett
The first rule is not to lose. The second rule is not to forget the first rule.
Warren Buffett
The investor of today does not profit from yesterday's growth.
Warren Buffett
The only time to buy these is on a day with no "y" in it.
Warren Buffett
The smarter the journalists are, the better off society is. For to a degree, people read the press to inform themselves-and the better the teacher, the better the student body.
Warren Buffett
There seems to be some perverse human characteristic that likes to make easy things difficult.
Warren Buffett
Time is the friend of the wonderful company, the enemy of the mediocre.
Warren Buffett
Value is what you get.
Warren Buffett
Wall Street is the only place that people ride to in a Rolls Royce to get advice from those who take the subway.
Warren Buffett
We believe that according the name 'investors' to institutions that trade actively is like calling someone who repeatedly engages in one-night stands a 'romantic.'
Warren Buffett
We enjoy the process far more than the proceeds.
Warren Buffett
We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.
Warren Buffett
When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact.
Warren Buffett
When you combine ignorance and leverage, you get some pretty interesting results.
Warren Buffett
Why not invest your assets in the companies you really like? As Mae West said, "Too much of a good thing can be wonderful".
Warren Buffett
Wide diversification is only required when investors do not understand what they are doing.
Warren Buffett
You do things when the opportunities come along. I've had periods in my life when I've had a bundle of ideas come along, and I've had long dry spells. If I get an idea next week, I'll do something. If not, I won't do a damn thing.
Warren Buffett
You only have to do a very few things right in your life so long as you don't do too many things wrong.
Warren Buffett
Your premium brand had better be delivering something special, or it's not going to get the business.
Warren Buffett
source: brainyquotes, warren buffett
Wednesday, January 27, 2010
Buys 3% of Munich Re Ag
Warren Buffett now owns a 3% stake in one of the largest reinsurance companies, Munich Re Ag, valued at $1 billion.
source: wsj, warren buffett
source: wsj, warren buffett
The Success of Warren Buffett
I just completed my read of "The Snowball – Warren Buffett and the Business of Life" by Alice Schroeder. This biography covers some 800 pages and provides a perspective on a unique individual. I must admit, he is much different than what I expected. The following is my summary of the major factors that have contributed to Mr. Buffett's incredible success and wealth:
Singular focus – Since Warren Buffett was a young boy, he had almost a singular focus to accumulate wealth. He also believed his way to wealth would be through the stock market. At a very early age, he knew what he wanted and where he wanted to go. Successful people always have long-term visions of their life. This is a lesson especially for younger folks. You will only really succeed in life once you know what you want to accomplish. As Yogi Berra said, "If you don't know where you are going, you may end up some place else."
Dedication - Mr. Buffett spends about 18 hours every day dedicated to investing capital. This is the type of dedication needed to succeed at his level. I doubt he wastes anytime in front of the television or shopping at the mall. Almost all his time is spent thinking and working on Berkshire Hathaway. This type of dedication can have its drawbacks as well. The book does not portray his family life in a very positive manner. He was separated from his first wife (it appears they did not divorce for P.R. reasons) and did not spend much time with his children as they grew up. There is only so much time in a day, and he spent it mostly on business-related activities.
Independent thinking – Buffett has come up with his criteria for investing in companies. These criteria have been developed over years of studying and reading about his craft. He will only invest in companies that meet these criteria. He does not feel pressured when things do not go his way nor when outside sources suggest new rules for investing. The most telling story of this was back in 1999 during the "technology stock bubble". Many people were saying he was too old and out of touch. They said he did not understand the "new economy". Buffett continued to plot his course using the rules he knew and understood. He has been vindicated as the technology market crashed and Berkshire Hathaway has continued to thrive.
Alliances – Mr. Buffett has developed partners and allies to help him attain his goals. He uses these partners to manage his businesses, help find new investments, and to obtain access to capital. Mr. Buffett will be the first to tell you that his wealth would be a small fraction of what it is today without these business associates.
Integrity – Buffett has spent a lifetime being honest and fair with his partners, business associates, and investors. This has given him the title of the most trusted man in corporate America. Being the most trusted man in corporate America benefits him in many ways. Investors are confident they will be treated fairly. Deals are be made in short order without the need for an army of attorneys, bankers, and auditors. The list of benefits goes on and on.
Long-term strategy – Early in Buffett's career, there were times in which he pursued short term money making strategies. However, as the size of his investment portfolio grew, this was not a sustainable strategy. This long-term strategy has benefited him and his investors immensely. He does not get caught up with the whims of the market and short-term prices. He merely seeks investments that can sustain a competitive advantage over the long term. A company can not control its stock price, but it can control its profits and cash flows generated from operations. As long as it supplies a steady stream of cash flows, the long term stock price will take care of itself.
Creativity – Buffett is a creative thinker. This is not a gift, but is the result of his other traits described above. His ability to see things differently is a result of his experience and dedication to business. If something works in one industry, he tries to apply the same principles to other industries.
There is no doubt that God blessed Warren Buffett with significant talents. However, his gifts and talents do not seem to be out of the ordinary. The skills described above seem to be the ones that most play out to his success. I found this very uplifting as most of the above skill sets can be learned by anyone and can be applied in almost any aspect of our lives and careers.
Please note, I do not believe that success is only defined by the size of one's wallet. But I do believe Mr. Buffett success lies in his ability to pursue and achieve his goals.
source: boston.com, warren buffett
Singular focus – Since Warren Buffett was a young boy, he had almost a singular focus to accumulate wealth. He also believed his way to wealth would be through the stock market. At a very early age, he knew what he wanted and where he wanted to go. Successful people always have long-term visions of their life. This is a lesson especially for younger folks. You will only really succeed in life once you know what you want to accomplish. As Yogi Berra said, "If you don't know where you are going, you may end up some place else."
Dedication - Mr. Buffett spends about 18 hours every day dedicated to investing capital. This is the type of dedication needed to succeed at his level. I doubt he wastes anytime in front of the television or shopping at the mall. Almost all his time is spent thinking and working on Berkshire Hathaway. This type of dedication can have its drawbacks as well. The book does not portray his family life in a very positive manner. He was separated from his first wife (it appears they did not divorce for P.R. reasons) and did not spend much time with his children as they grew up. There is only so much time in a day, and he spent it mostly on business-related activities.
Independent thinking – Buffett has come up with his criteria for investing in companies. These criteria have been developed over years of studying and reading about his craft. He will only invest in companies that meet these criteria. He does not feel pressured when things do not go his way nor when outside sources suggest new rules for investing. The most telling story of this was back in 1999 during the "technology stock bubble". Many people were saying he was too old and out of touch. They said he did not understand the "new economy". Buffett continued to plot his course using the rules he knew and understood. He has been vindicated as the technology market crashed and Berkshire Hathaway has continued to thrive.
Alliances – Mr. Buffett has developed partners and allies to help him attain his goals. He uses these partners to manage his businesses, help find new investments, and to obtain access to capital. Mr. Buffett will be the first to tell you that his wealth would be a small fraction of what it is today without these business associates.
Integrity – Buffett has spent a lifetime being honest and fair with his partners, business associates, and investors. This has given him the title of the most trusted man in corporate America. Being the most trusted man in corporate America benefits him in many ways. Investors are confident they will be treated fairly. Deals are be made in short order without the need for an army of attorneys, bankers, and auditors. The list of benefits goes on and on.
Long-term strategy – Early in Buffett's career, there were times in which he pursued short term money making strategies. However, as the size of his investment portfolio grew, this was not a sustainable strategy. This long-term strategy has benefited him and his investors immensely. He does not get caught up with the whims of the market and short-term prices. He merely seeks investments that can sustain a competitive advantage over the long term. A company can not control its stock price, but it can control its profits and cash flows generated from operations. As long as it supplies a steady stream of cash flows, the long term stock price will take care of itself.
Creativity – Buffett is a creative thinker. This is not a gift, but is the result of his other traits described above. His ability to see things differently is a result of his experience and dedication to business. If something works in one industry, he tries to apply the same principles to other industries.
There is no doubt that God blessed Warren Buffett with significant talents. However, his gifts and talents do not seem to be out of the ordinary. The skills described above seem to be the ones that most play out to his success. I found this very uplifting as most of the above skill sets can be learned by anyone and can be applied in almost any aspect of our lives and careers.
Please note, I do not believe that success is only defined by the size of one's wallet. But I do believe Mr. Buffett success lies in his ability to pursue and achieve his goals.
source: boston.com, warren buffett
Tuesday, January 26, 2010
BRKB added to S&P 100 and 500
You’ve got a permanent stockholder for 6 or 7 percent of your shares.
We like permanent shareholders. That’s exactly what we’re looking for.
source: bloomberg, warren buffett
We like permanent shareholders. That’s exactly what we’re looking for.
source: bloomberg, warren buffett
Monday, January 25, 2010
No Reason For Special Bank Tax
I don’t see any reason why they should be paying a special tax. They are trying to punish people. I don’t see the rationale for it.
Look at the damage Fannie and Freddie caused, and they were run by the Congress. Should they have a special tax on congressmen because they let this thing happen to Freddie and Fannie? I don’t think so.
source: businessweek, warren buffett
Look at the damage Fannie and Freddie caused, and they were run by the Congress. Should they have a special tax on congressmen because they let this thing happen to Freddie and Fannie? I don’t think so.
source: businessweek, warren buffett
Sunday, January 24, 2010
Symetra goes ipo
SYA opened for trading on Friday and closed at $12.75 .
The insurance company raised nearly $365 million selling 30.4 million shares at $12. SYA originally sought to sell 27 million shares for between $12 and $14 each.
SYA reported net income of $96.2 million in the nine months that ended Sept. 30, up from $27 million from the same period in 2008, on revenue of $1.3 billion, up from $1.1 billion in the year-earlier period.
Berkshire Hathaway owns a 26% stake in the company.
The insurance company raised nearly $365 million selling 30.4 million shares at $12. SYA originally sought to sell 27 million shares for between $12 and $14 each.
SYA reported net income of $96.2 million in the nine months that ended Sept. 30, up from $27 million from the same period in 2008, on revenue of $1.3 billion, up from $1.1 billion in the year-earlier period.
Berkshire Hathaway owns a 26% stake in the company.
How To Make Big Stock Market Returns In The Long Run As An Investor Or Trader
A Powerful Stock Market Idea Whose Time Has Come...
Wikipedia defines "thinking outside the box" as:
Thinking outside the box is to think differently, unconventionally, from a new perspective. This phrase often refers to novel, creative and smart thinking. This is sometimes called a process of lateral thought or lateral thinking.
Most of us know what that means, but very few investors or traders use it (or know how to use it) when it comes to the stock market. We are all in agreement that at least 90% of all traders and investors lose most of their money in time. Surprisingly, most traders still employ the same strategies or approaches that would result in a 90% failure rate. To do the same thing over and over again and expecting to achieve a different result is insanity.
So you have to ask yourself: What are you doing that is so unique from the majority of already failed traders (of all nationalities and IQs) before you? If you cannot answer that question, in time you will undoubtedly fail as a trader. There is just no way around it. It is pure and simple logic.
Are you addressing your gambling habits? Money management issues? Discipline? Could it be that your approach to (or your view of) the market is not very sound to begin with and that is what's creating all those above issues for you? Perhaps you might want to use lateral thinking and try a different approach?
Beating the "Sage of Omaha" Warren Buffett's returns will no longer be an elusive and daunting task, because now you have access to a spectacularly novel approach to the stock market that will take your trading and investing to the next level. Improving your long term stock market returns is easier than you think, if you would only look at the stock market from a very simple and logical perspective.
Every investor/trader wants to emulate or beat Warren Buffet's awesome 23% forty-years average compound annual returns. Many have tried and nobody has been able to do it yet. Don't get fooled by that 23% return. This is compounding 23% upon compounding 23% for at least 40 years. That means running $10,000 into more than $50 million within the span of those 40 years.
What if your goal was to get those kinds of compounding returns? Do you have a master game plan to help you achieve those lofty goals? How do you go about trading if you want to trade your way to massive returns, or do feel it's impossible to get those kinds of compound returns as a trader and that you have to be as good an investor as Warren Buffet? Do you have to be a master chartist?
Can you do this with penny stocks? If you were to try this route, can you imagine over $1 million dollars worth of penny stocks you'll be holding and trading?
Are you going to do this with stock options? A million dollars worth of stock options? Is that the way? How about the futures or the forex? How about small caps, midcaps, or large cap stocks?
Have you been pulling your hair (or what little is left of it) for years trying to find elusive holy grails of trading/investing and spending huge sums of money going to seminars and learning from gurus from all corners of the Earth, ultimately with not much to show? Were you one of those eBay bidders vying for a one hour lunch with Warren Buffet for over $1 million dollars? That's crazy, especially when the answer to all your confusion is just right under your nose!
Have you seriously thought about how you are going to get where you want to be? Or, are you just trading aimlessly day by day to see what you can get, without any game plan? I don't trade without a master game plan. If you don't have a game plan, it's almost certain you will lose money over the long run. It took me years to finally figure out the right way or game plan to approach the stock market with the least confusion and the most profit potential. Don't get confused that a game plan is some get-rich scheme. This is not a get-rich scheme where you go to sleep for a few months and wake up a multimillionaire. My approach is a simple and logical long term approach to the stock market and gives you the best chance, of anything I've seen out there in all my years of trading and investing, at a chance of beating Warren Buffett's long term record. Fortunately, my approach does not require you to get involved with risky instruments such as futures, stock options, forex or penny stocks. In fact, the money management system described in my book presents a very strong case on why you should not get involved with those types of risky instruments because they are detrimental to your accounts. By employing lateral thinking, you can get massive returns without the traditional massive risks.
Find out how strong a foundation and what time-tested principles my system was constructed upon. Money management, the real holy grail of trading/investing, will no longer be an elusive concept. Again as a byproduct of lateral thinking, my book helps you with money management in the most impressive way possible. As a result, you will be awakened with a renewed enthusiasm for the stock market like never before. Also, my approach is highly scalable - everybody can use it; It doesn't matter whether you are rich or have only a few thousand to your name.
If you're a losing trader, a confused trader, a profitable trader who wants to be much more profitable, or someone who wants to trade for a living, then you might want to read about my logical and powerful approach that I use everyday to make a living trading (and creating an impressive stock portfolio) from the stock market. Get the introduction chapter of my system for FREE by emailing me at beanieville@gmail.com, or subscribe to our free newsletter in the "Subscribe" box of this blog by entering your email address.
Stop wasting money on so many of the nonsense monthly stock trading subscriptions that are everywhere. You should only have to pay once for advice so you can learn to fish for yourself. If you really learned something from stock picking subscriptions, then why do you have to continue paying richly sums to the gurus month after month, year after year? In my opinion, my money management approach, though simple, is the only road map you really need to achieve viable long term trading/investing success. Once you have this powerful idea and use it, I believe the way you see the stock market changes forever.
I personally live and breathe this approach everyday as a professional day trader and investor. As far as I'm concerned, my approach is original, powerful, and paradigm-shifting idea whose time has come. Get the powerful full hardcopy version of my system and start learning how to trade/invest stocks for a living the right way and to build long term wealth.
For most people, the manuscript may be the only thing that can transform their stock market failures into one of future success.
Get the powerful full 65-pages hardcopy 'How To Make Big Stock Market Returns In The Long Run As A Trader Or Investor' sent to your home address or P.O. Box for $500 plus shipping. Click here to order.
Best Wishes,
Beanieville Inc./Warren Buffett Blog
Testimonials:
Some unsolicited testimonials..........
Hi... I received the manual last Fri & read it cover to cover over the weekend... your ideas made a lot of sense... like so many others, I have been trading like a lost soul for many years with nothing to show for it... I started applying your methodology & picked...
(S.M., New York)
Since getting your manuscript last week I have applied it on 3 stocks with great success, I have done 6 trades and 5/6 have been profitable the other was minimal loss .02 per share but I pay no commissions other than exchange fees so it is really a good program for me.
(R. Beard, Missouri)
Thanks for the manuscript. It was a great read, and gave me some definite lateral insight thinking. It was worth every penny. Is your name/nickname beanie? Not sure what to call you........ I'm an R.N. with two artificial knees from giving to others my whole life, and now I'm in a position where none of our social systems will help me (because I have the "valuable R.N. license", so I will help myself, and make three times my hourly wage with the insights you have provided me. I will succeed because I am patient, and will do trades the way a sniper tracks his mark.
God bless you, and your family.
Regards, Karl
(Karl C, Colorado)
Beanie,
It's so simple......... Now I see the light!
(H. Small, Florida)
Dear Beanie,
I received your system last week and I was thrilled as to how easy to understand it was. I am a self employed business owner so I know exactly what you are talking about. The logic and simplicity of your system is astounding. I just can't believe I couldn't figure it out all these years being in the market. I wished I had your system in my hands sooner so I wouldn't have to waste my money worrying about what stock to pick next. It is so simple and away with the emotional up and down roller coaster feeling I endured with the fluctuation market. I am going to do things differently and will apply your system starting next week.
Thank you so much.
(Karen B., California)
Beanie man, you have the greatest ideas and the most useful approach to the market out there and I thought I seen it all. At first, I thought you were selling some shit vaporscript, but after having read it I realize you're so logical, insightful, and very intelligent guru. Just wanted to send you a testimonial because you've helped me so much. Thanks. Like you, I am going to rule the market.
(D. Nguyen, Texas)
Beanie,
I love u man, for all your help. Been doing it your way like.........................
Just killing it, my trading account and IRA. Cancelled all my subscriptions. Dude, I think you're gonna be famous one day!
(J. Mann, Illinois)
Beanie,
...made a small fortune so far trading your ideas. I started with only $28k. I chose to play ........ because I love these stocks. For the first time in my life I feel like I can do this for a living. Thank you from the bottom of my heart.
(C. Tyler)
Hello,
The manuscript/book came on Monday for two weeks. I read it (yes, my english is good enough for that) and it's nearly similar with my own ideas that i have for six or seven years. But with a couple of more ideas from you. That help me for more focused of the right things. I playing the last years with Hyips, Options and agressive Managed Account's. But the easy way (Your way) is the best way, i think.
(C. Willman)
Wikipedia defines "thinking outside the box" as:
Thinking outside the box is to think differently, unconventionally, from a new perspective. This phrase often refers to novel, creative and smart thinking. This is sometimes called a process of lateral thought or lateral thinking.
Most of us know what that means, but very few investors or traders use it (or know how to use it) when it comes to the stock market. We are all in agreement that at least 90% of all traders and investors lose most of their money in time. Surprisingly, most traders still employ the same strategies or approaches that would result in a 90% failure rate. To do the same thing over and over again and expecting to achieve a different result is insanity.
So you have to ask yourself: What are you doing that is so unique from the majority of already failed traders (of all nationalities and IQs) before you? If you cannot answer that question, in time you will undoubtedly fail as a trader. There is just no way around it. It is pure and simple logic.
Are you addressing your gambling habits? Money management issues? Discipline? Could it be that your approach to (or your view of) the market is not very sound to begin with and that is what's creating all those above issues for you? Perhaps you might want to use lateral thinking and try a different approach?
Beating the "Sage of Omaha" Warren Buffett's returns will no longer be an elusive and daunting task, because now you have access to a spectacularly novel approach to the stock market that will take your trading and investing to the next level. Improving your long term stock market returns is easier than you think, if you would only look at the stock market from a very simple and logical perspective.
Every investor/trader wants to emulate or beat Warren Buffet's awesome 23% forty-years average compound annual returns. Many have tried and nobody has been able to do it yet. Don't get fooled by that 23% return. This is compounding 23% upon compounding 23% for at least 40 years. That means running $10,000 into more than $50 million within the span of those 40 years.
What if your goal was to get those kinds of compounding returns? Do you have a master game plan to help you achieve those lofty goals? How do you go about trading if you want to trade your way to massive returns, or do feel it's impossible to get those kinds of compound returns as a trader and that you have to be as good an investor as Warren Buffet? Do you have to be a master chartist?
Can you do this with penny stocks? If you were to try this route, can you imagine over $1 million dollars worth of penny stocks you'll be holding and trading?
Are you going to do this with stock options? A million dollars worth of stock options? Is that the way? How about the futures or the forex? How about small caps, midcaps, or large cap stocks?
Have you been pulling your hair (or what little is left of it) for years trying to find elusive holy grails of trading/investing and spending huge sums of money going to seminars and learning from gurus from all corners of the Earth, ultimately with not much to show? Were you one of those eBay bidders vying for a one hour lunch with Warren Buffet for over $1 million dollars? That's crazy, especially when the answer to all your confusion is just right under your nose!
Have you seriously thought about how you are going to get where you want to be? Or, are you just trading aimlessly day by day to see what you can get, without any game plan? I don't trade without a master game plan. If you don't have a game plan, it's almost certain you will lose money over the long run. It took me years to finally figure out the right way or game plan to approach the stock market with the least confusion and the most profit potential. Don't get confused that a game plan is some get-rich scheme. This is not a get-rich scheme where you go to sleep for a few months and wake up a multimillionaire. My approach is a simple and logical long term approach to the stock market and gives you the best chance, of anything I've seen out there in all my years of trading and investing, at a chance of beating Warren Buffett's long term record. Fortunately, my approach does not require you to get involved with risky instruments such as futures, stock options, forex or penny stocks. In fact, the money management system described in my book presents a very strong case on why you should not get involved with those types of risky instruments because they are detrimental to your accounts. By employing lateral thinking, you can get massive returns without the traditional massive risks.
Find out how strong a foundation and what time-tested principles my system was constructed upon. Money management, the real holy grail of trading/investing, will no longer be an elusive concept. Again as a byproduct of lateral thinking, my book helps you with money management in the most impressive way possible. As a result, you will be awakened with a renewed enthusiasm for the stock market like never before. Also, my approach is highly scalable - everybody can use it; It doesn't matter whether you are rich or have only a few thousand to your name.
If you're a losing trader, a confused trader, a profitable trader who wants to be much more profitable, or someone who wants to trade for a living, then you might want to read about my logical and powerful approach that I use everyday to make a living trading (and creating an impressive stock portfolio) from the stock market. Get the introduction chapter of my system for FREE by emailing me at beanieville@gmail.com, or subscribe to our free newsletter in the "Subscribe" box of this blog by entering your email address.
Stop wasting money on so many of the nonsense monthly stock trading subscriptions that are everywhere. You should only have to pay once for advice so you can learn to fish for yourself. If you really learned something from stock picking subscriptions, then why do you have to continue paying richly sums to the gurus month after month, year after year? In my opinion, my money management approach, though simple, is the only road map you really need to achieve viable long term trading/investing success. Once you have this powerful idea and use it, I believe the way you see the stock market changes forever.
I personally live and breathe this approach everyday as a professional day trader and investor. As far as I'm concerned, my approach is original, powerful, and paradigm-shifting idea whose time has come. Get the powerful full hardcopy version of my system and start learning how to trade/invest stocks for a living the right way and to build long term wealth.
For most people, the manuscript may be the only thing that can transform their stock market failures into one of future success.
Get the powerful full 65-pages hardcopy 'How To Make Big Stock Market Returns In The Long Run As A Trader Or Investor' sent to your home address or P.O. Box for $500 plus shipping. Click here to order.
Best Wishes,
Beanieville Inc./Warren Buffett Blog
Testimonials:
Some unsolicited testimonials..........
Hi... I received the manual last Fri & read it cover to cover over the weekend... your ideas made a lot of sense... like so many others, I have been trading like a lost soul for many years with nothing to show for it... I started applying your methodology & picked...
(S.M., New York)
Since getting your manuscript last week I have applied it on 3 stocks with great success, I have done 6 trades and 5/6 have been profitable the other was minimal loss .02 per share but I pay no commissions other than exchange fees so it is really a good program for me.
(R. Beard, Missouri)
Thanks for the manuscript. It was a great read, and gave me some definite lateral insight thinking. It was worth every penny. Is your name/nickname beanie? Not sure what to call you........ I'm an R.N. with two artificial knees from giving to others my whole life, and now I'm in a position where none of our social systems will help me (because I have the "valuable R.N. license", so I will help myself, and make three times my hourly wage with the insights you have provided me. I will succeed because I am patient, and will do trades the way a sniper tracks his mark.
God bless you, and your family.
Regards, Karl
(Karl C, Colorado)
Beanie,
It's so simple......... Now I see the light!
(H. Small, Florida)
Dear Beanie,
I received your system last week and I was thrilled as to how easy to understand it was. I am a self employed business owner so I know exactly what you are talking about. The logic and simplicity of your system is astounding. I just can't believe I couldn't figure it out all these years being in the market. I wished I had your system in my hands sooner so I wouldn't have to waste my money worrying about what stock to pick next. It is so simple and away with the emotional up and down roller coaster feeling I endured with the fluctuation market. I am going to do things differently and will apply your system starting next week.
Thank you so much.
(Karen B., California)
Beanie man, you have the greatest ideas and the most useful approach to the market out there and I thought I seen it all. At first, I thought you were selling some shit vaporscript, but after having read it I realize you're so logical, insightful, and very intelligent guru. Just wanted to send you a testimonial because you've helped me so much. Thanks. Like you, I am going to rule the market.
(D. Nguyen, Texas)
Beanie,
I love u man, for all your help. Been doing it your way like.........................
Just killing it, my trading account and IRA. Cancelled all my subscriptions. Dude, I think you're gonna be famous one day!
(J. Mann, Illinois)
Beanie,
...made a small fortune so far trading your ideas. I started with only $28k. I chose to play ........ because I love these stocks. For the first time in my life I feel like I can do this for a living. Thank you from the bottom of my heart.
(C. Tyler)
Hello,
The manuscript/book came on Monday for two weeks. I read it (yes, my english is good enough for that) and it's nearly similar with my own ideas that i have for six or seven years. But with a couple of more ideas from you. That help me for more focused of the right things. I playing the last years with Hyips, Options and agressive Managed Account's. But the easy way (Your way) is the best way, i think.
(C. Willman)
8 Timeless Warren Buffett Predictions
Warren Buffett became one of the wealthiest people in the world by making predictions and putting money behind those predictions. Every time he buys a stock or a business or some other investment, he's forecasting the future.
Judging by the incredible returns of his holding company Berkshire Hathaway, Buffett and his colleagues are very good at making those predictions.
Of course, it helps when you can give your predictions plenty of time to come true. That's one reason Buffett's favorite holding period for investments in "outstanding businesses with outstanding managements" is "forever."After all,"We don't get paid for activity, just for being right. As to how long we'll wait, we'll wait indefinitely."
With that in mind, here are Warren Buffett Watch's 'timeless' predictions.
1. Recessions can't be avoided forever.As 2007 was coming to a close, Buffett told our Becky Quick that if unemployment picks up significantly, the "dominoes" will fall and the U.S. economy will fall into recession in 2008. He was right, but not alarmed. "It is the nature of capitalism to periodically have recessions. People overshoot." (He told Becky she's young enough to expect to see 6 or 7 or them.)
2. We'll survive current and future recessions just as we've survived past problems.As Buffett told us in August, 2007, (and repeated throughout 2008 and 2009):"We've got a wonderful economy... There's never been anything like that in the history of the world. We live seven times better than the people did a century ago on average... We've had problems all along. If you look at the last century, we had that Great Depression and World War Two, we had the Cold War, we had the atomic bomb, but the country does well."
3. Recessions will create opportunities."I made by far the best buys I've ever made in my lifetime in 1974. And that was a time of great pessimism and the oil shock and stagflation and all those sort of things. But stocks were cheap."
4. All stocks won't be cheap. Like Ted Williams waiting for the right pitch, a successful investor waits for the right stock at the right price, and it doesn't happen every day. "What's nice about investing is you don't have to swing at pitches. You can watch pitches come in one inch above or one inch below your navel, and you don't have to swing. No umpire is going to call you out." You get in trouble, Buffett says, when you listen to the crowd chanting "Swing, batter, swing!"
5.The crowd will make mistakes. Buffett cites this piece of advice from his mentor Benjamin Graham: "You're neither right nor wrong because other people agree with you. You're right because your facts are right and your reasoning is right-and that's the only thing that makes you right. And if your facts and reasoning are right, you don't have to worry about anybody else."
6. Investors will mistakenly think falling stock prices are bad."If they reduce the price of hamburgers at McDonald's today I feel terrific. Now I don't go back and think, gee, I paid a little more yesterday. I think I'm going to be buying them cheaper today. Anything you're going to be buying in the future, you want to have get cheaper."
7. Good times will prompt bad decisions. In his 2000 Letter to Berkshire shareholders, Buffett compared the crowd that buys big when prices are high to Cinderella at the ball. "They know that overstaying the festivities - that is, continuing to speculate in companies that have gigantic valuations relative to the cash they are likely to generate in the future - will eventually bring on pumpkins and mice. But they nevertheless hate to miss a single minute of what is one helluva party. Therefore, the giddy participants all plan to leave just seconds before midnight. There's a problem, though: They are dancing in a room in which the clocks have no hands."
8.There will be more dancing at another wild party followed by another painful hangover. Looking back at the Internet bubble, Buffett is quoted as saying, "The world went mad. What we learn from history is that people don't learn from history."
source: cnbc, warren buffett
Judging by the incredible returns of his holding company Berkshire Hathaway, Buffett and his colleagues are very good at making those predictions.
Of course, it helps when you can give your predictions plenty of time to come true. That's one reason Buffett's favorite holding period for investments in "outstanding businesses with outstanding managements" is "forever."After all,"We don't get paid for activity, just for being right. As to how long we'll wait, we'll wait indefinitely."
With that in mind, here are Warren Buffett Watch's 'timeless' predictions.
1. Recessions can't be avoided forever.As 2007 was coming to a close, Buffett told our Becky Quick that if unemployment picks up significantly, the "dominoes" will fall and the U.S. economy will fall into recession in 2008. He was right, but not alarmed. "It is the nature of capitalism to periodically have recessions. People overshoot." (He told Becky she's young enough to expect to see 6 or 7 or them.)
2. We'll survive current and future recessions just as we've survived past problems.As Buffett told us in August, 2007, (and repeated throughout 2008 and 2009):"We've got a wonderful economy... There's never been anything like that in the history of the world. We live seven times better than the people did a century ago on average... We've had problems all along. If you look at the last century, we had that Great Depression and World War Two, we had the Cold War, we had the atomic bomb, but the country does well."
3. Recessions will create opportunities."I made by far the best buys I've ever made in my lifetime in 1974. And that was a time of great pessimism and the oil shock and stagflation and all those sort of things. But stocks were cheap."
4. All stocks won't be cheap. Like Ted Williams waiting for the right pitch, a successful investor waits for the right stock at the right price, and it doesn't happen every day. "What's nice about investing is you don't have to swing at pitches. You can watch pitches come in one inch above or one inch below your navel, and you don't have to swing. No umpire is going to call you out." You get in trouble, Buffett says, when you listen to the crowd chanting "Swing, batter, swing!"
5.The crowd will make mistakes. Buffett cites this piece of advice from his mentor Benjamin Graham: "You're neither right nor wrong because other people agree with you. You're right because your facts are right and your reasoning is right-and that's the only thing that makes you right. And if your facts and reasoning are right, you don't have to worry about anybody else."
6. Investors will mistakenly think falling stock prices are bad."If they reduce the price of hamburgers at McDonald's today I feel terrific. Now I don't go back and think, gee, I paid a little more yesterday. I think I'm going to be buying them cheaper today. Anything you're going to be buying in the future, you want to have get cheaper."
7. Good times will prompt bad decisions. In his 2000 Letter to Berkshire shareholders, Buffett compared the crowd that buys big when prices are high to Cinderella at the ball. "They know that overstaying the festivities - that is, continuing to speculate in companies that have gigantic valuations relative to the cash they are likely to generate in the future - will eventually bring on pumpkins and mice. But they nevertheless hate to miss a single minute of what is one helluva party. Therefore, the giddy participants all plan to leave just seconds before midnight. There's a problem, though: They are dancing in a room in which the clocks have no hands."
8.There will be more dancing at another wild party followed by another painful hangover. Looking back at the Internet bubble, Buffett is quoted as saying, "The world went mad. What we learn from history is that people don't learn from history."
source: cnbc, warren buffett
Saturday, January 23, 2010
Kraft buying Cadbury was a bad idea
Kraft sold a very fine pizza business to Nestlé for less than its full value. While the headline price was $3.7bn (£2.3bn), the enormously tax-inefficient way in which it was done meant Kraft had made only $2.5bn on the deal.
Kraft had sold the pizza unit at nine times earnings and bought Cadbury at 16 to 17 times, once the reorganisation costs and deal expenses were taken into account.
source: telegraph, warren buffett
Kraft had sold the pizza unit at nine times earnings and bought Cadbury at 16 to 17 times, once the reorganisation costs and deal expenses were taken into account.
source: telegraph, warren buffett
Failed bankers should be punished
If I was running things, if a bank had to go to the government for help, the C.E.O. and his wife would forfeit all their net worth.
And that would apply to any C.E.O. that had been there in the previous two years.
source: the new york times, warren buffett
And that would apply to any C.E.O. that had been there in the previous two years.
source: the new york times, warren buffett
Friday, January 22, 2010
On Benanke's nomination
If I could vote twice I would. He should be. He did a magnificent job over this period… We can’t sit here and armchair quarterback him. But when we look back at September and October 2008, he took some extraordinary actions….we talked about it being an economic pearl harbor. He did what he should have done in response.
Q: What happens if he’s not recommended?
Well, just tell me a day ahead of time so I can sell some stocks.
source: wall street journal
Q: What happens if he’s not recommended?
Well, just tell me a day ahead of time so I can sell some stocks.
source: wall street journal
On the economic recovery
He's not sure when the economy will recover, but he expects the rebound to be slow because American consumers remain uneasy.
Buffett said he thinks the key to economic recovery will be getting money back into most people's pockets. He says the government's first stimulus plan didn't do that very well.
source: washington post
Buffett said he thinks the key to economic recovery will be getting money back into most people's pockets. He says the government's first stimulus plan didn't do that very well.
source: washington post
BRK.B splits 50:1 two days ago
We don't want any day traders. And we get very, very few of them in the end. We want to get the same kind of shareholders that we've attracted in the past, we want to get people who look at buying a share of Berkshire that they intend to hold forever...
There's been a little more action than is ideal today.
source: fox business
There's been a little more action than is ideal today.
source: fox business
On Goldman Sachs
So -- I never know what will happen in the next six months or one year in the stock market or the economy, but I felt Goldman Sachs was very well managed. We did put $5 million in before the government when - at a time when people were petrified in this country.
But I felt they had excellent management. I felt they had very conservative marks in terms of how they kept their books, and I wrote a check because I thought the country -- I thought Bernanke and Paulson would do the right thing, and Sheila Bair, and they did.
source: fox business
But I felt they had excellent management. I felt they had very conservative marks in terms of how they kept their books, and I wrote a check because I thought the country -- I thought Bernanke and Paulson would do the right thing, and Sheila Bair, and they did.
source: fox business
Warren Buffet at the Turn of the Millennium
During the remainder of the 1990's, the stock catapulted as high as $80,000 per share. Even with this astronomical feat, as the dot-com frenzy began to take hold, Warren Buffett was accused of "losing his touch". In 1999, when Berkshire reported a net increase of 0.5% per share, several newspapers ran stories about the demise of the Oracle. Confident that the technology bubble would burst, Warren Buffett continued to do what he did best: allocate capital into great businesses that were selling below intrinsic value. His efforts did not go unrewarded. When the markets finally did come to their senses, Warren Buffett was once again a star. Berkshire's stock recovered to its previous levels after falling to around $45,000 per share, and the man from Omaha was once again seen as an investment icon.
source: about.com
source: about.com
I'll Take a Coke
A year later, in 1988, he started buying up Coca-Cola stock like an addict. His old neighbor, now the President of Coca-Cola, noticed someone was loading up on shares and became concerned. After researching the transactions, he noticed the trades were being placed from the Midwest. He immediately thought of Buffett, whom he called. Warren confessed to being the culprit and requested they don't speak of it until he was legally required to disclose his holdings at the 5% threshold. Within a few months, Berkshire owned 7% of the company, or $1.02 billion dollars worth of the stock. Within three years, Buffett's Coca-Cola stock would be worth more than the entire value of Berkshire when he made the investment.
By 1989, Berkshire Hathaway was trading at $8,000 a share. Buffett was now, personally, worth more than $3.8 billion dollars. Within the next ten years, he would be worth ten times that amount. Before that would happen, there were much darker times ahead (read The Solomon Scandal).
source: about.com
By 1989, Berkshire Hathaway was trading at $8,000 a share. Buffett was now, personally, worth more than $3.8 billion dollars. Within the next ten years, he would be worth ten times that amount. Before that would happen, there were much darker times ahead (read The Solomon Scandal).
source: about.com
Warren Buffett Buys Nebraska Furniture Mart, Scott Fetzer and an Airplane for Berkshire Hathaway
For all the fine businesses Berkshire had managed collect, one of the best was about to come under its stable. In 1983, Warren Buffett walked into Nebraska Furniture Mart, the multi-million dollar furniture retailer built from scratch by Rose Blumpkin. Speaking to Mrs. B, as local residents called her, Buffett asked if she would be interested in selling the store to Berkshire Hathaway. Blumpkin's answer was a simple "yes", to which she responded she would part for "$60 million". The deal was sealed on a handshake and one page contract was drawn up. The Russian-born immigrant merely folded the check without looking at it when she received it days later.
Scott & Fetzer was another great addition to the Berkshire family. The company itself had been the target of a hostile takeover when an LPO was launched by Ralph Schey, the Chairman. The year was 1984 and Ivan Boesky soon launched a counter offer for $60 a share (the original tender offer stood at $50 a share - $5 above market value). The maker of Kirby vacuum cleaners and World Book encyclopedia, S&F was panicking. Buffett, who had owned a quarter of a million shares, dropped a message to the company asking them to call if they were interested in a merger. The phone rang almost immediately. Berkshire offered $60 per share in cold, hard, cash. When the deal was wrapped up less than a week later, Berkshire Hathaway had a new $315 million dollar cash-generating powerhouse to add to its collection. The small stream of cash that was taken out of the struggling textile mill had built one of the most powerful companies in the world. Far more impressive things were to be done in the next decade. Berkshire would see its share price climb from $2,600 to as high as $80,000 in the 1990's.
In 1986, Buffett bought a used Falcon aircraft for $850,000. As he had become increasingly recognizable, it was no longer comfortable for him to fly commercially. The idea of the luxury was hard for him to adjust to, but he loved the jet immensely. The passion for jets eventually, in part, led him to purchase Executive Jet in the 90's.
The 80's went on with Berkshire increasing in value as if on cue, the only bump in the road being the crash of 1987. Warren, who wasn't upset about the market correction, calmly checked the price of his company and went back to work. It was representative of how he viewed stocks and businesses in general. This was one of "Mr. Market's" temporary aberrations. It was quite a strong one; fully one-fourth of Berkshire's market cap was wiped out. Unfazed, Warren plowed on.
source: about.com
Scott & Fetzer was another great addition to the Berkshire family. The company itself had been the target of a hostile takeover when an LPO was launched by Ralph Schey, the Chairman. The year was 1984 and Ivan Boesky soon launched a counter offer for $60 a share (the original tender offer stood at $50 a share - $5 above market value). The maker of Kirby vacuum cleaners and World Book encyclopedia, S&F was panicking. Buffett, who had owned a quarter of a million shares, dropped a message to the company asking them to call if they were interested in a merger. The phone rang almost immediately. Berkshire offered $60 per share in cold, hard, cash. When the deal was wrapped up less than a week later, Berkshire Hathaway had a new $315 million dollar cash-generating powerhouse to add to its collection. The small stream of cash that was taken out of the struggling textile mill had built one of the most powerful companies in the world. Far more impressive things were to be done in the next decade. Berkshire would see its share price climb from $2,600 to as high as $80,000 in the 1990's.
In 1986, Buffett bought a used Falcon aircraft for $850,000. As he had become increasingly recognizable, it was no longer comfortable for him to fly commercially. The idea of the luxury was hard for him to adjust to, but he loved the jet immensely. The passion for jets eventually, in part, led him to purchase Executive Jet in the 90's.
The 80's went on with Berkshire increasing in value as if on cue, the only bump in the road being the crash of 1987. Warren, who wasn't upset about the market correction, calmly checked the price of his company and went back to work. It was representative of how he viewed stocks and businesses in general. This was one of "Mr. Market's" temporary aberrations. It was quite a strong one; fully one-fourth of Berkshire's market cap was wiped out. Unfazed, Warren plowed on.
source: about.com
Warren Buffett Wants Two Nickels to Rub Together
By the late '70s, the his reputation had grown to the point that the rumor Warren Buffett was buying a stock was enough to shoot its price up 10%. Berkshire Hathaway's stock was trading at more than $290 a share, and Buffett's personal wealth was almost $140 million. The irony was that Warren never sold a single share of his company, meaning his entire available cash was the $50,000 salary he received. During this time, he made a comment to a broker, "Everything I got is tied up in Berkshire. I'd like a few nickels outside."
This prompted Warren to start investing for his personal life. According to Roger Lowenstein's "Buffett", Warren was far more speculative with his own investments. At one point he bought copper futures which was unadulterated speculation. In a short time, he had made $3 million dollars. When prompted to invest in real estate by a friend, he responded "Why should I buy real estate when the stock market is so easy?"
Later, Buffett once again showed his tendency of bucking the popular trend. In 1981, the decade of greed, Berkshire announced a new charity plan which was thought up by Munger and approved by Warren. The plan called for each shareholder to designate charities which would receive $2 for each Berkshire share the stockholder owned. This was in response to a common practice on Wall Street of the CEO choosing who received the company's hand-outs (often they would go to the executive's schools, churches, and organizations). The plan was a huge success and over the years the amount was upped for each share. Eventually, the Berkshire shareholders were giving millions of dollars away each year, all to their own causes. The program was eventually discontinued after associates at one of Berkshire's subsidiaries, The Pampered Chef, experienced discrimination because of the controversal pro-choice charities Buffett chose to allocate his pro-rated portion of the charitable contribution pool. Another important event around this time was the stock price which hit $750 per share in 1982. Most of the gains could be attributed to Berkshire's stock portfolio which was now valued at over $1.3 billion dollars.
source: about.com
This prompted Warren to start investing for his personal life. According to Roger Lowenstein's "Buffett", Warren was far more speculative with his own investments. At one point he bought copper futures which was unadulterated speculation. In a short time, he had made $3 million dollars. When prompted to invest in real estate by a friend, he responded "Why should I buy real estate when the stock market is so easy?"
Later, Buffett once again showed his tendency of bucking the popular trend. In 1981, the decade of greed, Berkshire announced a new charity plan which was thought up by Munger and approved by Warren. The plan called for each shareholder to designate charities which would receive $2 for each Berkshire share the stockholder owned. This was in response to a common practice on Wall Street of the CEO choosing who received the company's hand-outs (often they would go to the executive's schools, churches, and organizations). The plan was a huge success and over the years the amount was upped for each share. Eventually, the Berkshire shareholders were giving millions of dollars away each year, all to their own causes. The program was eventually discontinued after associates at one of Berkshire's subsidiaries, The Pampered Chef, experienced discrimination because of the controversal pro-choice charities Buffett chose to allocate his pro-rated portion of the charitable contribution pool. Another important event around this time was the stock price which hit $750 per share in 1982. Most of the gains could be attributed to Berkshire's stock portfolio which was now valued at over $1.3 billion dollars.
source: about.com
Warren Buffett Gains Control of Berkshire Hathaway
Buffett's role at Berkshire Hathaway had actually been somewhat defined years earlier. On May 10, 1965, after accumulating 49% of the common stock, Warren named himself Director. Terrible management had run the company nearly into the ground, and he was certain with a bit of tweaking, it could be run better. Immediately Mr. Buffett made Ken Chace President of the company, giving him complete autonomy over the organization. Although he refused to award stock options on the basis that it was unfair to shareholders, Warren agreed to cosign a loan for $18,000 for his new President to purchase 1,000 shares of the company's stock.
Two years later, in 1967, Warren asked National Indemnity's founder and controlling shareholder Jack Ringwalt to his office. Asked what he thought the company was worth, Ringwalt told Buffett at least $50 per share, a $17 premium above its then-trading price of $33. Warren offered to buy the whole company on the spot - a move that cost him $8.6 million dollars. That same year, Berkshire paid out a dividend of 10 cents on its outstanding stock. It never happened again; Warren said he "must have been in the bathroom when the dividend was declared".
In 1970, Buffett named himself Chairman of the Board of Berkshire Hathaway and for the first time, wrote the letter to the shareholders (Ken Chace had been responsible for the task in the past). That same year, the Chairman's capital allocation began to display his prudence; textile profits were a pitiful $45,000, while insurance and banking each brought in $2.1 and $2.6 million dollars. The paltry cash brought in from the struggling looms in New Bedford, Massachusetts had provided the stream of capital necessary to start building Berkshire.
A year or so later, Warren Buffett was offered the chance to buy a company by the name of See's Candy. The gourmet chocolate maker sold its own brand of candies to its customers at a premium to regular confectionary treats. The balance sheet reflected what Californians already knew - they were more than willing to pay a bit "extra" for the special "See's" taste. The businessman decided Berkshire would be willing to purchase the company for $25 million in cash. See's owners were holding out for $30 million, but soon conceded. It was the biggest investment Berkshire or Buffett had ever made.
Following several investments and an SEC investigation (after causing a merger to fail, Warren and Munger offered to buy the stock of Wesco, the target company, at the inflated price simply because they thought it was "the right thing to do". Not surprisingly, the government didn't believe them), Buffett began to see Berkshire's net worth climb. From 1965 to 1975, the company's book value rose from $20 per share to around $95. It was also during this period that Warren made his final purchases of Berkshire stock (when the partnership dolled out the shares, he owned 29%. Years later, he had invested more than $15.4 million dollars into the company at an average cost of $32.45 per share). This brought his ownership to over 43% of the stock with Susie holding another 3%. His entire fortune was placed into Berkshire. With no personal holdings, the company had become his sole investment vehicle.
In 1976, Buffett once again became involved with GEICO. The company had recently reported amazingly high losses and its stock was pummeled down to $2 per share. Warren wisely realized that the basic business was still in tact; most of the problem were caused by an inept management. Over the next few years, Berkshire built up its position in this ailing insurer and reaped millions in profits. Benjamin Graham, who still held his fortune in the company, died in in September of the same year, shortly before the turnaround. Years later, the insurance giant would become a fully owned subsidiary of Berkshire.
It was shortly thereafter one of the most profound and upsetting events in Buffett's life took place. At forty-five, Susan Buffett left her husband - in form. Although she remained married to Warren, the humanitarian / singer secured an apartment in San Francisco and, insisting she wanted to live on her own, moved there. Warren was absolutely devastated; throughout his life, Susie had been "the sunshine and rain in my [his] garden". The two remained close, speaking every day, taking their annual two-week New York trip, and meeting the kids at their California Beach house for Christmas get-togethers. The transition was hard for the businessman, but he eventually grew somewhat accustomed to the new arrangement. Susie called several women in the Omaha area and insisted they go to dinner and a movie with her husband; eventually, she set Warren up with Astrid Menks, a waitress. Within the year, she moved in with Buffett, all with Susie's blessing.
source: about.com
Two years later, in 1967, Warren asked National Indemnity's founder and controlling shareholder Jack Ringwalt to his office. Asked what he thought the company was worth, Ringwalt told Buffett at least $50 per share, a $17 premium above its then-trading price of $33. Warren offered to buy the whole company on the spot - a move that cost him $8.6 million dollars. That same year, Berkshire paid out a dividend of 10 cents on its outstanding stock. It never happened again; Warren said he "must have been in the bathroom when the dividend was declared".
In 1970, Buffett named himself Chairman of the Board of Berkshire Hathaway and for the first time, wrote the letter to the shareholders (Ken Chace had been responsible for the task in the past). That same year, the Chairman's capital allocation began to display his prudence; textile profits were a pitiful $45,000, while insurance and banking each brought in $2.1 and $2.6 million dollars. The paltry cash brought in from the struggling looms in New Bedford, Massachusetts had provided the stream of capital necessary to start building Berkshire.
A year or so later, Warren Buffett was offered the chance to buy a company by the name of See's Candy. The gourmet chocolate maker sold its own brand of candies to its customers at a premium to regular confectionary treats. The balance sheet reflected what Californians already knew - they were more than willing to pay a bit "extra" for the special "See's" taste. The businessman decided Berkshire would be willing to purchase the company for $25 million in cash. See's owners were holding out for $30 million, but soon conceded. It was the biggest investment Berkshire or Buffett had ever made.
Following several investments and an SEC investigation (after causing a merger to fail, Warren and Munger offered to buy the stock of Wesco, the target company, at the inflated price simply because they thought it was "the right thing to do". Not surprisingly, the government didn't believe them), Buffett began to see Berkshire's net worth climb. From 1965 to 1975, the company's book value rose from $20 per share to around $95. It was also during this period that Warren made his final purchases of Berkshire stock (when the partnership dolled out the shares, he owned 29%. Years later, he had invested more than $15.4 million dollars into the company at an average cost of $32.45 per share). This brought his ownership to over 43% of the stock with Susie holding another 3%. His entire fortune was placed into Berkshire. With no personal holdings, the company had become his sole investment vehicle.
In 1976, Buffett once again became involved with GEICO. The company had recently reported amazingly high losses and its stock was pummeled down to $2 per share. Warren wisely realized that the basic business was still in tact; most of the problem were caused by an inept management. Over the next few years, Berkshire built up its position in this ailing insurer and reaped millions in profits. Benjamin Graham, who still held his fortune in the company, died in in September of the same year, shortly before the turnaround. Years later, the insurance giant would become a fully owned subsidiary of Berkshire.
It was shortly thereafter one of the most profound and upsetting events in Buffett's life took place. At forty-five, Susan Buffett left her husband - in form. Although she remained married to Warren, the humanitarian / singer secured an apartment in San Francisco and, insisting she wanted to live on her own, moved there. Warren was absolutely devastated; throughout his life, Susie had been "the sunshine and rain in my [his] garden". The two remained close, speaking every day, taking their annual two-week New York trip, and meeting the kids at their California Beach house for Christmas get-togethers. The transition was hard for the businessman, but he eventually grew somewhat accustomed to the new arrangement. Susie called several women in the Omaha area and insisted they go to dinner and a movie with her husband; eventually, she set Warren up with Astrid Menks, a waitress. Within the year, she moved in with Buffett, all with Susie's blessing.
source: about.com
Warren Buffett Goes to Work for Ben Graham
The couple took a house in the suburbs of New York. Buffett spent his days analyzing S&P reports, searching for investment opportunities. It was during this time that the difference between the Graham and Buffett philosophies began to emerge. Warren became interested in how a company worked - what made it superior to competitors. Ben simply wanted numbers whereas Warren was predominately interested in a company's management as a major factor when deciding to invest, Graham looked only at the balance sheet and income statement; he could care less about corporate leadership. Between 1950 and 1956, Warren built his personal capital up to $140,000 from a mere $9,800. With this war chest, he set his sights back on Omaha and began planning his next move.
On May 1, 1956, Warren Buffett rounded up seven limited partners which included his Sister Doris and Aunt Alice, raising $105,000 in the process. He put in $100 himself, officially creating the Buffett Associates, Ltd. Before the end of the year, he was managing around $300,000 in capital. Small, to say the least, but he had much bigger plans for that pool of money. He purchased a house for $31,500, affectionately nicknamed "Buffett's Folly", and managed his partnerships originally from the bedroom, and later, a small office. By this time, his life had begun to take shape; he had three children, a beautiful wife, and a very successful business.
Over the course of the next five years, the Buffett partnerships racked up an impressive 251.0% profit, while the Dow was up only 74.3%. A somewhat-celebrity in his hometown, Warren never gave stock tips despite constant requests from friends and strangers alike. By 1962, the partnership had capital in excess of $7.2 million, of which a cool $1 million was Buffett's personal stake (he didn't charge a fee for the partnership - rather Warren was entitled to 1/4 of the profits above 4%). He also had more than 90 limited partners across the United States. In one decisive move, he melded the partnerships into a single entity called "Buffett Partnerships Ltd.", upped the minimum investment to $100,000, and opened an office in Kiewit Plaza on Farnam street.
In 1962, a man by the name of Charlie Munger moved back to his childhood home of Omaha from California. Though somewhat snobbish, Munger was brilliant in every sense of the word. He had attended Harvard Law School without a Bachelor's Degree. Introduced by mutual friends, Buffett and Charlie were immediately drawn together, providing the roots for a friendship and business collaboration that would last for the next forty years.
Ten years after its founding, the Buffett Partnership assets were up more than 1,156% compared to the Dow's 122.9%. Acting as lord over assets that had ballooned to $44 million dollars, Warren and Susie's personal stake was $6,849,936. Mr. Buffett, as they say, had arrived.
Wisely enough, just as his persona of success was beginning to be firmly established, Warren Buffett closed the partnership to new accounts. The Vietnam war raged full force on the other side of the world and the stock market was being driven up by those who hadn't been around during the depression. All while voicing his concern for rising stock prices, the partnership pulled its biggest coup in 1968, recording a 59.0% gain in value, catapulting to over $104 million in assets.
The next year, Warren went much further than closing the fund to new accounts; he liquidated the partnership. In May 1969, he informed his partners that he was "unable to find any bargains in the current market". Buffett spent the remainder of the year liquidating the portfolio, with the exception of two companies - Berkshire and Diversified Retailing. The shares of Berkshire were distributed among the partners with a letter from Warren informing them that he would, in some capacity, be involved in the business, but was under no obligation to them in the future. Warren was clear in his intention to hold onto his own stake in the company (he owned 29% of the Berkshire Hathaway stock) but his intentions weren't revealed.
source: about.com
On May 1, 1956, Warren Buffett rounded up seven limited partners which included his Sister Doris and Aunt Alice, raising $105,000 in the process. He put in $100 himself, officially creating the Buffett Associates, Ltd. Before the end of the year, he was managing around $300,000 in capital. Small, to say the least, but he had much bigger plans for that pool of money. He purchased a house for $31,500, affectionately nicknamed "Buffett's Folly", and managed his partnerships originally from the bedroom, and later, a small office. By this time, his life had begun to take shape; he had three children, a beautiful wife, and a very successful business.
Over the course of the next five years, the Buffett partnerships racked up an impressive 251.0% profit, while the Dow was up only 74.3%. A somewhat-celebrity in his hometown, Warren never gave stock tips despite constant requests from friends and strangers alike. By 1962, the partnership had capital in excess of $7.2 million, of which a cool $1 million was Buffett's personal stake (he didn't charge a fee for the partnership - rather Warren was entitled to 1/4 of the profits above 4%). He also had more than 90 limited partners across the United States. In one decisive move, he melded the partnerships into a single entity called "Buffett Partnerships Ltd.", upped the minimum investment to $100,000, and opened an office in Kiewit Plaza on Farnam street.
In 1962, a man by the name of Charlie Munger moved back to his childhood home of Omaha from California. Though somewhat snobbish, Munger was brilliant in every sense of the word. He had attended Harvard Law School without a Bachelor's Degree. Introduced by mutual friends, Buffett and Charlie were immediately drawn together, providing the roots for a friendship and business collaboration that would last for the next forty years.
Ten years after its founding, the Buffett Partnership assets were up more than 1,156% compared to the Dow's 122.9%. Acting as lord over assets that had ballooned to $44 million dollars, Warren and Susie's personal stake was $6,849,936. Mr. Buffett, as they say, had arrived.
Wisely enough, just as his persona of success was beginning to be firmly established, Warren Buffett closed the partnership to new accounts. The Vietnam war raged full force on the other side of the world and the stock market was being driven up by those who hadn't been around during the depression. All while voicing his concern for rising stock prices, the partnership pulled its biggest coup in 1968, recording a 59.0% gain in value, catapulting to over $104 million in assets.
The next year, Warren went much further than closing the fund to new accounts; he liquidated the partnership. In May 1969, he informed his partners that he was "unable to find any bargains in the current market". Buffett spent the remainder of the year liquidating the portfolio, with the exception of two companies - Berkshire and Diversified Retailing. The shares of Berkshire were distributed among the partners with a letter from Warren informing them that he would, in some capacity, be involved in the business, but was under no obligation to them in the future. Warren was clear in his intention to hold onto his own stake in the company (he owned 29% of the Berkshire Hathaway stock) but his intentions weren't revealed.
source: about.com
Ben Graham - Buffett's Mentor
Ben Graham had become well known during the 1920's. At a time when the rest of the world was approaching the investment arena as a giant game of roulette, he searched for stocks that were so inexpensive they were almost completely devoid of risk. One of his best known calls was the Northern Pipe Line, an oil transportation company managed by the Rockefellers. The stock was trading at $65 a share, but after studying the balance sheet, Graham realized that the company had bond holdings worth $95 for every share. The value investor tried to convince management to sell the portfolio, but they refused. Shortly thereafter, he waged a proxy war and secured a spot on the Board of Directors. The company sold its bonds and paid a dividend in the amount of $70 per share.
When he was 40 years old, Ben Graham published Security Analysis, one of the greatest works ever penned on the stock market. At the time, it was risky; investing in equities had become a joke (the Dow Jones had fallen from 381.17 to 41.22 over the course of three to four short years following the crash of 1929). It was around this time that Graham came up with the principle of "intrinsic" business value - a measure of a business's true worth that was completely and totally independent of the stock price. Using intrinsic value, investors could decide what a company was worth and make investment decisions accordingly. His subsequent book, The Intelligent Investor, which Warren celebrates as "the greatest book on investing ever written", introduced the world to Mr. Market - the best investment analogy in history.
Through his simple yet profound investment principles, Ben Graham became an idyllic figure to the twenty-one year old Warren Buffett. Reading an old edition of Who's Who, Warren discovered his mentor was the Chairman of a small, unknown insurance company named GEICO. He hopped a train to Washington D.C. one Saturday morning to find the headquarters. When he got there, the doors were locked. Not to be stopped, Buffett relentlessly pounded on the door until a janitor came to open it for him. He asked if there was anyone in the building. As luck (or fate) would have it, there was. It turns out that there was a man still working on the sixth floor. Warren was escorted up to meet him and immediately began asking him questions about the company and its business practices; a conversation that stretched on for four hours. The man was none other than Lorimer Davidson, the Financial Vice President. The experience would be something that stayed with Buffett for the rest of his life. He eventually acquired the entire GEICO company through his corporation, Berkshire Hathaway.
Flying through his graduate studies at Columbia, Warren Buffett was the only student ever to earn an A+ in one of Graham's classes. Disappointingly. both Ben Graham and Warren's father advised him not to work on Wall Street after he graduated. Absolutely determined, Buffett offered to work for the Graham partnership for free. Ben turned him down. He preferred to hold his spots for Jews who were not hired at Gentile firms at the time. Warren was crushed.
Returning home, he took a job at his father's brokerage house and began seeing a girl by the name of Susie Thompson. The relationship eventually turned serious and in April of 1952 the two were married. They rented out a three-room apartment for $65 a month; it was run-down and served as home to several mice. It was here their daughter, also named Susie, was born. In order to save money, they made a bed for her in a dresser drawer.
During these initial years, Warren's investments were predominately limited to a Texaco station and some real estate, but neither were successful. It was also during this time he began teaching night classes at the University of Omaha (something that wouldn't have been possible several months before. In an effort to conquer his intense fear of public speaking, Warren took a course by Dale Carnegie). Thankfully, things changed. Ben Graham called one day, inviting the young stockbroker to come to work for him. Warren was finally given the opportunity he had long awaited.
source: about.com
When he was 40 years old, Ben Graham published Security Analysis, one of the greatest works ever penned on the stock market. At the time, it was risky; investing in equities had become a joke (the Dow Jones had fallen from 381.17 to 41.22 over the course of three to four short years following the crash of 1929). It was around this time that Graham came up with the principle of "intrinsic" business value - a measure of a business's true worth that was completely and totally independent of the stock price. Using intrinsic value, investors could decide what a company was worth and make investment decisions accordingly. His subsequent book, The Intelligent Investor, which Warren celebrates as "the greatest book on investing ever written", introduced the world to Mr. Market - the best investment analogy in history.
Through his simple yet profound investment principles, Ben Graham became an idyllic figure to the twenty-one year old Warren Buffett. Reading an old edition of Who's Who, Warren discovered his mentor was the Chairman of a small, unknown insurance company named GEICO. He hopped a train to Washington D.C. one Saturday morning to find the headquarters. When he got there, the doors were locked. Not to be stopped, Buffett relentlessly pounded on the door until a janitor came to open it for him. He asked if there was anyone in the building. As luck (or fate) would have it, there was. It turns out that there was a man still working on the sixth floor. Warren was escorted up to meet him and immediately began asking him questions about the company and its business practices; a conversation that stretched on for four hours. The man was none other than Lorimer Davidson, the Financial Vice President. The experience would be something that stayed with Buffett for the rest of his life. He eventually acquired the entire GEICO company through his corporation, Berkshire Hathaway.
Flying through his graduate studies at Columbia, Warren Buffett was the only student ever to earn an A+ in one of Graham's classes. Disappointingly. both Ben Graham and Warren's father advised him not to work on Wall Street after he graduated. Absolutely determined, Buffett offered to work for the Graham partnership for free. Ben turned him down. He preferred to hold his spots for Jews who were not hired at Gentile firms at the time. Warren was crushed.
Returning home, he took a job at his father's brokerage house and began seeing a girl by the name of Susie Thompson. The relationship eventually turned serious and in April of 1952 the two were married. They rented out a three-room apartment for $65 a month; it was run-down and served as home to several mice. It was here their daughter, also named Susie, was born. In order to save money, they made a bed for her in a dresser drawer.
During these initial years, Warren's investments were predominately limited to a Texaco station and some real estate, but neither were successful. It was also during this time he began teaching night classes at the University of Omaha (something that wouldn't have been possible several months before. In an effort to conquer his intense fear of public speaking, Warren took a course by Dale Carnegie). Thankfully, things changed. Ben Graham called one day, inviting the young stockbroker to come to work for him. Warren was finally given the opportunity he had long awaited.
source: about.com
Warren Buffett's Education
In 1947, a seventeen year old Warren Buffett graduated from High School. It was never his intention to go to college; he had already made $5,000 delivering newspapers (this is equal to $42,610.81 in 2000). His father had other plans, and urged his son to attend the Wharton Business School at the University of Pennsylvania. Buffett stayed two years, complaining that he knew more than his professors. When Howard was defeated in the 1948 Congressional race, Warren returned home to Omaha and transferred to the University of Nebraska-Lincoln. Working full-time, he managed to graduate in only three years.
Warren Buffett approached graduate studies with the same resistance he displayed a few years earlier. He was finally persuaded to apply to Harvard Business School, which, in the worst admission decision in history, rejected him as "too young". Slighted, Warren applied to Columbia where famed investors Ben Graham and David Dodd taught - an experience that would forever change his life.
source: about.com
Warren Buffett approached graduate studies with the same resistance he displayed a few years earlier. He was finally persuaded to apply to Harvard Business School, which, in the worst admission decision in history, rejected him as "too young". Slighted, Warren applied to Columbia where famed investors Ben Graham and David Dodd taught - an experience that would forever change his life.
source: about.com
Warren Buffett is born
Warren Edward Buffett was born on August 30, 1930 to his father Howard, a stockbroker-turned-Congressman. The only boy, he was the second of three children, and displayed an amazing aptitude for both money and business at a very early age. Acquaintances recount his uncanny ability to calculate columns of numbers off the top of his head - a feat Warren still amazes business colleagues with today.
At only six years old, Buffett purchased 6-packs of Coca Cola from his grandfather's grocery store for twenty five cents and resold each of the bottles for a nickel, pocketing a five cent profit. While other children his age were playing hopscotch and jacks, Warren was making money. Five years later, Buffett took his step into the world of high finance. At eleven years old, he purchased three shares of Cities Service Preferred at $38 per share for both himself and his older sister, Doris. Shortly after buying the stock, it fell to just over $27 per share. A frightened but resilient Warren held his shares until they rebounded to $40. He promptly sold them - a mistake he would soon come to regret. Cities Service shot up to $200. The experience taught him one of the basic lessons of investing: patience is a virtue.
source: about.com
At only six years old, Buffett purchased 6-packs of Coca Cola from his grandfather's grocery store for twenty five cents and resold each of the bottles for a nickel, pocketing a five cent profit. While other children his age were playing hopscotch and jacks, Warren was making money. Five years later, Buffett took his step into the world of high finance. At eleven years old, he purchased three shares of Cities Service Preferred at $38 per share for both himself and his older sister, Doris. Shortly after buying the stock, it fell to just over $27 per share. A frightened but resilient Warren held his shares until they rebounded to $40. He promptly sold them - a mistake he would soon come to regret. Cities Service shot up to $200. The experience taught him one of the basic lessons of investing: patience is a virtue.
source: about.com
Subscribe to:
Posts (Atom)