Category: Master Series

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Master Series

Buffett lost his touch?

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Berkshire Hathaway, a.k.a, Warren Buffett’s diversified holding company, reported a not-so-good quarter Friday after market close. Here are the results.

BRK berkshire 3Q 2008 pic
(full size pic here)

On the surface the result is not good. But I think the loss from derivatives is on the paper and will be temporary.

What do we learn from Buffett
Discipline, discipline, discipline (see the definition at Wesbster Dictionary). There is a new book about Buffett came out lately. Here is the link to Amazon. If you like, you can also help me out buying from my Amazon store. But this is not my point. My point is, among many attributes that contribute to the success of Oracle of Omaha, discicpline is probablly the most important.

Jason Zweig wrote an article about the secret behind Buffett’s success on WSJ. Here is the Chinese translation.

Buffett pretender award

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Master Series

Buffett on the market

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New York Times Op-ed piece (10/17/08): Buy American. I Am.

Buffett article Fortune Magazine 11/10/2001: Warren Buffett on the Stock Market: What’s in the future for investors

You can read more Buffett and Munger stuff at Warren & Charlie page.

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Master Series

Buffett talked about rescue plan on Charlie Rose

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Here is the Google video. He also talked about the financial crisis, human psychology in terms of bubble, herd mentality etc. which is my favorite part (but I have to admit I am one of the herd). The interview last about 54 min.

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Master Series

In Buffett we trust: II

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In this turbulent market, most of my stocks took hits, from China Mobile (NYSE:CHL) to Arch Coal (NYSE:ACI), to Chesepeake Energy (NYSE:CHK), Marathon Oil (NYSE:MRO), not to mention the once-high-flyers such as Sohu (Nasdaq:SOHU) and Wuxi Pharma (Nasdaq:WX), both of which I already sold. At the same time, I am happy to see my two shares of Berkshire Hathaway (NYSE:BRK.B) stood calm, and even went up a bit. Why?

(Fox interview David Sokol, Chairman of MidAmerican Energy, a Berkshire Hathaway holding)

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Master Series

Buffett CNBC interview

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When the Master speaks, we all listen. Here is what he said on CNBC “squawk on the street” Aug 22. Note I don’t pay attention to CNBC and “Squawk on the Street”, unless it’s someone like Buffett or Gross (Pimco) speaking. Here are the transcripts at CNBC. I read it from trader1688 first. Some interesting quotes:

What Chinese company got Buffett interested?
6:22 AM: Buffett reveals that Berkshire made a half-billion dollar bid on a Chinese stock that wasn’t accepted. He wouldn’t say what stock or what industry. He did say that under the right circumstances he could have a lot of money in China, but noted that there are government restrictions on foreign ownership that must be overcome.

Buffett left some money on the table
7:05 AM: Buffett confirms that he sold 60 percent of his Anheuser-Busch [BUD 67.79 0.03 (+0.04%) ] shares at prices around $61-$62 before the company agreed to a friendly merger with InBev at a sweetened price of $70. Buffett says at the time he wasn’t sure the deal would go through given Anheuser’s strong resistance to InBev’s original bid. “In retrospect, I was wrong,” but he says that often happens.

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Master Series

Boone Pickens’ plan

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His plan is basically use more wind for electricity power, free up the natural gas for transportation (automobiles). Currently natural gas cars are still not as versatile as gasoline cars. But I have seen and heard natural gas powered taxi in Shanghai, and gas powered bus in the States. Natural gas is more environmentally friendly compared to oil, but natural gas taxi has to carry a big gas bulb in the trunk, i.e., less trunk room for cars.

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Master Series

Steve Jobs, Apple, Bill Gates, Microsoft

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Background
Couple days ago the Apple stock got a hit not just becaues of the soft earning guidance, the more important reason is the company declined to answer the health question of its co-founder and CEO Steve Jobs in the earning call.

You tube videos
Great Artists Steal – Triumph of the Nerds – Revised (very short)

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Master Series

John Templeton

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You Tube video: John Templeton interviewed at Wall Street Week at PBS. He was talking about the market in 1989: Germany; Japan stock market hit the top and started going down; Hongkong; US, etc.

John passed away today, at age of 95.

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Master Series

Weather channel, Wimbledon

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NBC will pay $3.5 billion for weather channel, weather.com and its related properties. News here. Hm, I think besides the travellers, people interested in the weather include commodity traders. The commodities range from crude oil, natural gas, heating oil, to crops. The reason goes like this, if natural disaster like Hurricane Katrina happens, it will destroy the oil and natural gas infrustures, and cause short term disruption of oil supply. The oil and gas price will jump. Similarly, if a draught or an extreme cold weather happens, crops and heating oil will be more valuable (again, disruption of supply). I think GE/NBC made a smart move buying the weather channel here.

Wimbledon
What a game. Weather played a factor too: the rain and the wind. Maybe it helped Nadal in some way? I was hoping Roger to win but I think he should have no regret (tried his best). One fun fact is the local NBC channel switched to baseball game (Cards vs. Cub), and we watched the game via UUSee web TV (Beijing TV 6). I also like two players comments after the game:

21:24 – A surprisingly stoic Roger Federer not letting any emotion out: “I tried everything, it went a little late and everything, but look Rafa is a deserving champion, he just played incredible todayÂ…. He’s the worst opponent on the best court, but it’s been a joy again to play here, I know I couldn’t win it under the circumstances, but I’ll be back next year.”

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Master Series

Buffett on courses in business schools

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We only need two, according to Buffett, at 2008 shareholder Q&A session (transcript at GuruFocus). Note Q5, WB answer, he noted the following two courses:

1) how to value a business;

2) how to think about stock market fluctuations.

I think the first one is obvious, all the accounting, financial and quantitative skills. The second, is less obvious, it’s more about psychology. Buffett’s sidekick Charlie Munger summarized in his Human Misjudgement speech. Buffett also said something like “be cautious when others are greedy; be greedy when others are cautious“. This is certainly not science or a rule can be applied easily. For instance, if one person bought SPRD last Friday (like yours truely), it fell more today.

I noticed Danbin, a China hedge fund manager admires Buffett very much, also has his own way. He is almost religous about holding his stocks these days, amid the recent big drop of China market. You can read this article at his blog to get a glimpse. I am sure many of his clients are thinking or asking to bail out.

Oh, well, whatever it works for him/her. The key is to make money in the long run.