The student is wrong on one point: if Buffett had only a few million to invest, he wouldn't be putting it to work in large cap and blue chip stocks.
Buffett has stated it specifically many times. With only a million or so under management, he would be investing in very small arbitrage and asset plays. For the most part, this is what he does with his personal portfolio outside of Berkshire Hathaway. In the last 10 years or so, he has invested in liquidation plays, and REITs trading below liquidation value. Comdisco (CDCO.ob) is an example of a liquidation play that was large enough for BRK to buy, and is currently almost completely liquidated.
Other personal investment's he's made that were Grahamian asset plays were the basket of Korean stocks he purchased a few years ago. He didn't completely understand the businesses or whether they had moats, but they had a tremendous margin of safety based on assets and earnings. So he bought a basket of them (diversified) because of this lack of understanding.
Buffett did realize later on not to rely on turnaround or "bad" businesses for value. But when purchasing a diversified portfolio of extremely cheap stocks, trading at 25-40 cents on the dollar (like Graham did or Buffett did recently with Korean stocks), it really doesn't matter what the "quality" of their moat is. This is where Buffett's "50% annualized" statement comes from -- not from buying large-caps.
Submitted by billytickets on Thu, 2007-12-20 18:40.
The source is affiliated with Mr Buffett and I stand by the statement. Buffetts huge profits have come from 10 insights investments read Charlie Mungers speech for more detail where he also discusses Buffett with the 20 punchcard idea as well. Mr Munger"knows" Buffett better than you and me and my source and if you read this http://www.trailblazercoaching.com/Resources/Speeches/Munger,%20Charlie/Mungers%20Worldly%20Wisdom.pdf
you will see that most of berkshire's profits have come from 10 ideas
Personally I don't see Buffett selling the super cat business Coke or Am EX or WFC or JNJ or Iscar anytime soon.peace
Submitted by billytickets on Fri, 2007-12-21 01:26.
What is funny is that this student who gave this info froma man WHO is FRIENDS with WEB.
Anyone who did not give this a thumbs up really does not know what the word value investor is
and the person who gave it a negative is like Stevie Wonder critciquing Dale Earnhardt Jr's driving. Wise up and learn
Max's critque is VALID and it is true Buffett could do well in small situtaions because he is VERY TALENTED. i have NO PROBLEM with it.Buffetts mistakes in his past were on " cigar butts".he NEVER bought high quality business WRONG
He could do ANY METHOD and make huge gains because of his ability to stick to what he knows.
Max is correct, look at Shai Dardashti's letter to Warren Buffett:
----------------------------------------------------
In his letter, Shai asks just one question:
At the Q&A I arranged you told me that today (May 23, 2005) you were “85%
Graham and 15% Fisher.”
If you were today 20-something years old, again looking to allocate less than $10 million, and free to allocate capital into well over 8,000 opportunities (before even considering anything overseas), would your Latticework of Mental Models primarily be searching for:
a) Situations reminiscent of 1957 - akin to Daehan Flour Mills, or
b) Situations reminiscent of 1987 - akin to Moody’s Corporation?
In response to Shai’s 1,091 word letter that accompanied the question above, he got a to the point, eight word hand written response from Warren Buffett. Mr. Buffett writes:
“Either is fine.”
“[a] Better for small sums.”
“[b] Better for large sums.”
----------------------------------------------------
He'd go with smaller cap/graham style situations if he had small sums of capital, and Moody's situations with large sums of capital. Straight from Warren's mouth. Not some "friend of Warren's"
Submitted by billytickets on Fri, 2007-12-21 06:18.
ok hes gonna sell coke right? Thats the thing with investing as you get better you need to be buying bigger caps.The notes my friend gave me from a guest speaker at his school and if you read the munger speech in which he said Warren made almost all his money on 10 ideas in his life .
Of course Warren is saying he has the skill to buy small caps but all his speechs about large caps are valid
Submitted by billytickets on Fri, 2007-12-21 09:52.
yes thats true street capitalist if YOU HAVE WEBS COMPETENCE. that is TRUE.If you are a young novice like yourself you are not capable of doing part A of shais question.Wise up
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The student is wrong on one
The student is wrong on one point: if Buffett had only a few million to invest, he wouldn't be putting it to work in large cap and blue chip stocks.
Buffett has stated it specifically many times. With only a million or so under management, he would be investing in very small arbitrage and asset plays. For the most part, this is what he does with his personal portfolio outside of Berkshire Hathaway. In the last 10 years or so, he has invested in liquidation plays, and REITs trading below liquidation value. Comdisco (CDCO.ob) is an example of a liquidation play that was large enough for BRK to buy, and is currently almost completely liquidated.
Other personal investment's he's made that were Grahamian asset plays were the basket of Korean stocks he purchased a few years ago. He didn't completely understand the businesses or whether they had moats, but they had a tremendous margin of safety based on assets and earnings. So he bought a basket of them (diversified) because of this lack of understanding.
Buffett did realize later on not to rely on turnaround or "bad" businesses for value. But when purchasing a diversified portfolio of extremely cheap stocks, trading at 25-40 cents on the dollar (like Graham did or Buffett did recently with Korean stocks), it really doesn't matter what the "quality" of their moat is. This is where Buffett's "50% annualized" statement comes from -- not from buying large-caps.
The source is affiliated
The source is affiliated with Mr Buffett and I stand by the statement. Buffetts huge profits have come from 10 insights investments read Charlie Mungers speech for more detail where he also discusses Buffett with the 20 punchcard idea as well. Mr Munger"knows" Buffett better than you and me and my source and if you read this http://www.trailblazercoaching.com/Resources/Speeches/Munger,%20Charlie/Mungers%20Worldly%20Wisdom.pdf
you will see that most of berkshire's profits have come from 10 ideas
Personally I don't see Buffett selling the super cat business Coke or Am EX or WFC or JNJ or Iscar anytime soon.peace
What is funny is that this
What is funny is that this student who gave this info froma man WHO is FRIENDS with WEB.
Anyone who did not give this a thumbs up really does not know what the word value investor is
and the person who gave it a negative is like Stevie Wonder critciquing Dale Earnhardt Jr's driving. Wise up and learn
Max's critque is VALID and it is true Buffett could do well in small situtaions because he is VERY TALENTED. i have NO PROBLEM with it.Buffetts mistakes in his past were on " cigar butts".he NEVER bought high quality business WRONG
He could do ANY METHOD and make huge gains because of his ability to stick to what he knows.
Max is correct
Max is correct, look at Shai Dardashti's letter to Warren Buffett:
----------------------------------------------------
In his letter, Shai asks just one question:
At the Q&A I arranged you told me that today (May 23, 2005) you were “85%
Graham and 15% Fisher.”
If you were today 20-something years old, again looking to allocate less than $10 million, and free to allocate capital into well over 8,000 opportunities (before even considering anything overseas), would your Latticework of Mental Models primarily be searching for:
a) Situations reminiscent of 1957 - akin to Daehan Flour Mills, or
b) Situations reminiscent of 1987 - akin to Moody’s Corporation?
In response to Shai’s 1,091 word letter that accompanied the question above, he got a to the point, eight word hand written response from Warren Buffett. Mr. Buffett writes:
“Either is fine.”
“[a] Better for small sums.”
“[b] Better for large sums.”
----------------------------------------------------
He'd go with smaller cap/graham style situations if he had small sums of capital, and Moody's situations with large sums of capital. Straight from Warren's mouth. Not some "friend of Warren's"
ok hes gonna sell coke
ok hes gonna sell coke right? Thats the thing with investing as you get better you need to be buying bigger caps.The notes my friend gave me from a guest speaker at his school and if you read the munger speech in which he said Warren made almost all his money on 10 ideas in his life .
Of course Warren is saying he has the skill to buy small caps but all his speechs about large caps are valid
validity depends on how much capital
as we can see, he says some situations work BETTER for bigger amounts of capital and some situations work BETTER for smaller amounts of capital.
yes thats true street
yes thats true street capitalist if YOU HAVE WEBS COMPETENCE. that is TRUE.If you are a young novice like yourself you are not capable of doing part A of shais question.Wise up