Warren Buffett 02 (Feb 10 - May 15)

[winston]

On Friday, Warren Buffet appeared on CNBC saying that a U.S. economic recession is "very, very unlikely."

The famed investor gave a tiny boost to the Dow, which of course didn't last.

Source: thestreet.com

[winston]

The one lesson everyone should learn from Warren Buffett by Dr. David Eifrig


I was shocked at how monstrous his house really is...

The legendary investor (known to some as the Oracle of Omaha) is one of the richest men in the world.

In 1960, he started a partnership with 10 doctors. It's rumored here in town that each of those doctors now has about $700 million from their initial $10,000 deposit. It's also rumored that Buffett only put in $100, but transformed that into billions.

But despite his immense wealth, Buffett is portrayed as a simple guy, famous for still living in the house he bought in 1957 for $31,500.

So while investigating a few investment possibilities in Omaha, Nebraska this week... I decided to swing by Buffett's home to see how simple it really is.

In my mind, I pictured an understated rancher home built in the then-outskirts of Omaha... a home just like so many others thrown up in thousands of new suburban communities all over the country in the '40s and '50s. (I have one of these homes in Augusta, Georgia.)

Boy, was I wrong. Buffett's house is huge... a beautiful five-bedroom, light brown and white brick home, with a Craftsman sort of flavor.

It's clearly been renovated over the years, with a new roof recently placed and impeccable landscaping. But what struck me most was its large size.

Today, Zillow (an online real estate estimator) values his home at only $645,800. Almost anywhere on the East Coast, that house would easily go for $1 million or more. But not here in Omaha.

On the surface, it would seem Buffett's home investment hasn't done so well – barely 5.85%. That's much less than the 20% per year he has averaged over 54 years of investing in his firm Berkshire Hathaway.

But for the world's best investor, his home is a sleep-well-at-night investment. Buffett didn't speculate on his house and pay some crazy multiple of his gross income.

Instead, he bought an affordable home and watched it appreciate a little bit every year for 55 years. He didn't lose much in the downturns, because he didn't consume too much house in the beginning.

It's crucial you understand this mindset. To become wealthy, you don't need a fancy home in San Francisco or Los Angeles. You don't need to spend money on fancy clothes or cars. What's critical for a wealthy retirement is saving money and investing regularly.

But most Americans don't understand investing and savings... We've created a generation of people who consume instead of save and invest. That's the road to poverty, not wealth.

Just take a look at what's happened to the savings rate in this country...

We've dropped down from double digits in the '70s and '80s to almost nothing a few years ago. You can't create wealth without savings. And without investing those savings, you can't retire happy.

The most critical thing we can do as individuals – and as a country – is save and invest. I encourage you to do this starting today.

Source: Retirement Trader

[tonylim]

Terry savage [email protected] October 27, 2011 9:36PM

Updated: October 28, 2011 9:25AM


Warren Buffett is bullish on America — and bullish on the stock market. And he’s putting his money where his mouth is — buying stocks and companies!

I interviewed Buffett at a benefit that raised more than $1 million for Junior Achievement of Chicago. The audience of Chicago executives included several from Marmon Group, a company that Buffett owns, and Career Builder, which contributed $500,000 for its seats and a private reception.

Blending folksy commentary with economic wisdom, one of America’s richest citizens said he didn’t mind having a tax-increase proposal named after him.

“That’s been my childhood dream,” he said, getting a laugh.

He went on to explain that to reduce our federal budget deficit, some promises for Social Security and Medicare will have to be diminished. And he believes in “shared sacrifice” to create opportunities for all.

Buffett was adamant that America would continue to grow, noting that “there have always been tough times,” but America has always continued to move forward.

“We have not exhausted our potential,” he said.

Buffett was not shy about expressing his views on:

† The stock market: The market will be much higher 10 years from now, he said, but he can’t tell where it will be 10 months from now.

† The dollar: It will be a worth a lot less 10 years from now — a good reason to buy stocks!

† Time to invest? His company, Berkshire Hathaway, just spent $9 billion last month to buy Lubrizol Corp. and $7 billion on other investments and capital improvements. “We continue to buy,” he said.

† The housing market: “A lot of people paid too much for their houses!” he said. When you build 2 million houses a year and there are only 1 million new households being formed to live in them, you have an oversupply and prices drop. Buffett said he supports a plan to refinance underwater mortgages for those who have continued to pay on time.

† Jobs: The 260,000 Berkshire employees do not wake up worrying about their job security or worrying about making their mortgage payments. Jobs will come back.

† Politics: Gerrymandering election districts to create “safe” seats has allowed extremists to be elected, making compromise tough.

† Our children: Parenting is the most important job anyone has. We need to improve our public school system to create equal opportunities, he said.

† China: They finally found a market system that allows them to unleash their potential. . . . Growth is not a zero-sum game. . . . Their growth will benefit us.

† Greek debt: The banks holding Greek bonds accept a 50 percent haircut on the value, but will others accept that cut in value? He’s not sure the European debt crisis is solved.

Finally, when asked why he supports President Barack Obama (for whom he was in town for a fund-raiser), Buffett explained that the president’s vision of America as a place that offers opportunity for all is closest to his own vision for this country.

There is no doubting Buffett’s sincerity and optimism — two characteristics that have helped make him America’s most successful long-term investor.

And that’s The Savage Truth.

[iam802]

Buffett was not shy about expressing his views on:

† The stock market: The market will be much higher 10 years from now, he said, but he can’t tell where it will be 10 months from now.

I believe he uses a 10 year timeframe to smooth out any possible volatility (on top of all those dividends that he is getting).

Personally, I do not want my capital to be sitting in a stock and wait for it to appreciate after 10years.

What if it does not goes up a lot after 10 years?

In fact, my near term view over the next 1-2 years is that there will be opportunities to short.

If I can get it at a lower price, why go long here?

[winston]

Buffett was not shy about expressing his views on:

† The stock market: The market will be much higher 10 years from now, he said, but he can’t tell where it will be 10 months from now.

Hmmm..... I heard the same thing about Japanese stocks 20 years ago. And where are we on that ?

And are you going to just follow blindly, what someone says ?

Just because someone has been accurate for the last few decades, it does not mean that he will be correct going forward ...

And how much did Buffett lost during the last two months or during the 2008 Lehman Crisis ?

[kennynah]

I believe he uses a 10 year timeframe to smooth out any possible volatility (on top of all those dividends that he is getting).

Personally, I do not want my capital to be sitting in a stock and wait for it to appreciate after 10years.

What if it does not goes up a lot after 10 years?

In fact, my near term view over the next 1-2 years is that there will be opportunities to short.

If I can get it at a lower price, why go long here?

this fella, buffet, is in a very different league from all of us... he is so wealthy that he can afford a luxurious lifestyle and wait for economies to pick up...whatever that happens to the stock market, it no longer has any significant impact on him practically...the only disadvantage is his old age...

whereas, if we depend on building our wealth on the stock market, we have to get our opinion right more than wrong, if we are to end up winning...

no need worry about 10 years...if we mess up so badly in a few months, we are done for in our investment journey..

[winston]

WB spent US$24b buying stocks last quarter, the most in at least 15 years..

[winston]

WB: If you own a farm in the Midwest ( or business ), do you just sell your farm ( or business ), when the Greeks are having some problem paying off their loans ?

[Musicwhiz]

WB: If you own a farm in the Midwest ( or business ), do you just sell your farm ( or business ), when the Greeks are having some problem paying off their loans ?

WB actually said that? Classic lah this guy. Hahaha.

[winston]

If you own the whole business and dont intend to sell, then you can probably think like WB.

And I'm sure a lot of people have lost a lot of money, if they have held on to their shares in August and September, thinking that the Greeks and Italians have nothing to do with their counter ...

If you dont sell, you can always hold, while others have no problem selling ...