Warren Buffett 02 (Feb 10 - May 15)

[winston]

"It is not necessary to do extraordinary things to get extraordinary results."
Warren Buffett

[LenaHuat]

It was reported that WB told President Obama that the US had only recovered 40 to 50% from the banking crisis. I wonder if the press stands corrected on this. WB has apparently not heard of the book that he recommended

(OK, switch off laptop now in order to tune into Taiwanese Channel) Tomorrow's market will be interesting.

[kennynah]

i thought "爱" ended already

[winston]

What Would Young Buffett Buy?

Everyone wants to invest like Warren Buffett. He is the 3rd richest man in the world and the namesake for this site. He has made a fortune over the past 50 years with his shrewd investment strategy.

Buffett has always been a value investor looking for strong companies selling at a discount. Buffett’s top holdings are Coca Cola, Wells Fargo, American Express, Proctor & Gamble, and Kraft. Have you noticed a trend?

The top 10 stocks in Warren Buffett’s portfolio are all large cap stocks. These are all blue chip companies with excellent free cash flows and solid dividends. Why does Buffett have so many large cap companies? Billionaire Buffett has to buy large cap stocks because it would be impractical for Buffett to have a portfolio of small cap stocks. With a $48 billion dollar portfolio, Buffett would have to buy millions of smaller companies to make effective use of his capital.

The interesting thing is that young Warren Buffet was a different investor. Young Buffett invested heavily in small and mid sized companies. His purchase of Sanborn Maps in 1960 is a good example of this. Buffett’s partnership placed 35% of the partnerships funds in this one investment. He saw a great opportunity and invested heavily in it. He did the same thing when his company purchased See’s Candy in 1972.

Let’s take a look at how a young Warren Buffett built his fortune.

1. Invest heavily in your best idea.

Let’s be clear, I am not suggesting that you put 100% of your money in any one investment. You should however be willing to invest 20 to 30% of your money in your best ideas. Too many people overly diversify. They allocate the same amount of money to their best ideas as to their worst one.

Buffett protégé Monish Pabrai discusses the importance of making big bets infrequently in his book The Dhandho Investor. I may buy a bunch of different stocks for my personal portfolio but I put most of my money in my best ideas.

2. Invest in stocks whose best growth potential is ahead of them.

Young Warren Buffett was not the billionaire that he is today so sometimes he would have to sell a position to enter another one. Buffett would sell a stock with 20% upside potential for a stock with 50% upside potential. You have to be willing to give up a good opportunity for a great one.

That’s why I am not a big fan of loading up on companies with huge market caps. A company with a market cap of $200 to $300 billion will have a difficult time doubling in value compared to a company with a market cap of $1 billion dollars. Buffett bought companies like Coca Cola and Gillette doing their heydays.

3. Invest in companies that are off the map.

An investor’s biggest advantage is in being able to invest in opportunities that others don’t know about. Buffett never invests in the “hot sectors”. Stay away from the must buys that you see on CNBC and other business channels. The best time to buy a stock is when it is out of favor. Financial experts and market strategists hate financials right now so that tells me that financials are the place to invest.

Well, I hope that you find this information useful in helping you shape your investment strategy.

http://buylikebuffett.com/index.php/201 ... ffett-buy/

[winston]

Why There Will Never Be Another Warren Buffett
August 20, 2010 By: Mark

There has been a lot of speculation over who will take over when Warren Buffett steps down. Buffett is the creator, founder, and mastermind behind the success at Berkshire Hathaway.

Berkshire Hathaway (BRK-A) is the highest valued stock in the stock market with a price of $116,305.00 per share. Buffett has turned early investors into multimillionaires through his shrewd investment moves.

Rumors have Li Lu taking over for the longtime Berkshire chairman when he finally does retire. Lu is a Columbia graduate and chairman of Himalaya Capital Management. Lu has made a number of smart investments including his deployment of capital in BYD Company Limited. Although Lu is a very successful investor, he will be placed in a situation where it will be impossible to duplicate the results of the investing legend.

Here are a few reasons why there will never be another Warren Buffett.


1) The stock market’s days of double digit growth are likely over.

There will always be potential in smaller stocks for double digit gains but the market as a whole will not be as robust as it once was. The 5 largest stakes in the Berkshire portfolio are Coca Cola, Wells Fargo, American Express, Proctor & Gamble, and Kraft Foods. These 5 large cap stocks represent nearly 70% of the entire $48 billion dollar public stock portfolio.

These are all great companies but none are expected to grow at a double digit rate. A lot will depend on Buffett’s successor’s ability to make strategic acquisition to Berkshire Holdings. Buffett has a knack for knowing that GEICO and Dairy Queen would be great additions to the company’s holdings.


2.) Buffett’s successor will be managing a multibillion dollar portfolio.

It will be impossible with a portfolio that large to come near the past successes of Warren Buffett. Buffett has been able to generate an average return of 20% annually for over 45 years. In his 2008 annual report Buffett himself stated that “Berkshire’s past record can’t be duplicated or even approached. Our base of assets and earnings is now far too large for us to make outsized gains in the future.”

An informed investor actually has a better chance of outperforming Berkshire due to their ability to take advantage of new opportunities and remain nimble in the marketplace.


3) Investors buy shares of Berkshire Hathaway for one reason and one reason only, Warren Buffett.

Everyone wants to own what Buffett owns. The disclosure of his holdings each quarter drives fund managers and investors alike to acquire shares of Buffett’s newest acquisitions. I am convinced that investors trying to mimic the moves of Buffett plays some small part in the rising prices of Buffett’s investments.

When Buffett is no longer at the helm, will investors pay up for shares of Berkshire and scramble to acquire the newest Berkshire acquisition?

http://buylikebuffett.com/index.php/201 ... n-buffett/

[winston]

"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

[winston]

Is Billionaire Warren Buffett Buying Up Land in Brazil? By KEREN BLANKFELD

Brazilian magazine EXAME reports that America’s favorite investor is headed to Brazil.

According to the report, Warren Buffett, the world’s third richest man, and his famed investment vehicle, Berkshire Hathaway, are interested in buying up land in the Amazon and are negotiating starting an acquisition company in Brazil specifically for this purpose.

Apparently Berkshire execs were visiting Brazil about a month ago checking out the area.


http://blogs.forbes.com/kerenblankfeld/ ... =dailycrux

[kennynah]

maybe he discocered some lost treasures at some Amazon jungle...or maybe he starting a Jurassic Park....

or maybe he just wants to retire in the tranquility of the jungle....

[behappyalways]

Brazil is happening place now.......

I was quite impressed with Brazil after reading this article......

When Embrapa started, the cerrado was regarded as unfit for farming. Norman Borlaug, an American plant scientist often called the father of the Green Revolution, told the New York Times that “nobody thought these soils were ever going to be productive.” They seemed too acidic and too poor in nutrients. Embrapa did four things to change that.

First, it poured industrial quantities of lime (pulverised limestone or chalk) onto the soil to reduce levels of acidity. In the late 1990s, 14m-16m tonnes of lime were being spread on Brazilian fields each year, rising to 25m tonnes in 2003 and 2004. This amounts to roughly five tonnes of lime a hectare, sometimes more. At the 20,000-hectare Cremaq farm, 5,000 hulking 30-tonne lorries have disgorged their contents on the fields in the past three years. Embrapa scientists also bred varieties of rhizobium, a bacterium that helps fix nitrogen in legumes and which works especially well in the soil of the cerrado, reducing the need for fertilisers

http://www.economist.com/node/16886442

[winston]

"It is not necessary to do extraordinary things to get extraordinary results."

Warren Buffett