Buffett released his annual letter to shareholder last Friday, which I will discuss in next few days. First let me lay out my 5 year observations about Buffett and many other money managers.
1) Buffett will tell you his stock Berkshire Hathaway (BRK.A and BRK.B) is expensive all the time (don’t buy it); while money managers will say anything you want to hear to manage your money (and earn the fees). They will do seminars, show their cool technologies, send you advertisement (Mail, TV, Internet), etc. All this reminds me of the promoters of stock trading software on Shanghai street 🙂
2) Buffett does not think too much of stock daily price, quote him “if you care about the daily fluctuations of a stock, you should not buy the stock at first place”; some money managers watched the market every day, every hour, every minute. This reminds me one thing: if somebody/something needs constant attention, and it’s not your baby, then something is wrong (notice Britney Spears getting media attention lately).
3) Simply put, it’s difference between Kobe Bryant and Tracy McGrady. A little background, they are both famous NBA players, made lots of money. But Kobe has 3 championship rings, Tracy never passed the 1st round of playoff.
4) Buffett never predicts the market, and he never gives you a stock pick; many money managers love to do the opposite, of course their chance of being correct is less than 50%.