Tag: Buffett

Categories
Master Series

More Buffett and Munger Readings

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What a day. I mean the stock market. Monday IBM gave us some good news. Today neither Citi nor Apple (and New Oriental if I may add) sent out re-assuring news, and the market (both Dow and Nasdaq) tanked…

These days I started to read the Buffett shareholder letters date back to year 1978.

I also found this talk “human mis-judgement” given by Charlie Munger, vice chairman of Berkshire Hathaway, to be enlightening. Two things I immediately connected with:

1) Association: He mentioned Coke is associating its product with Olympics etc. I think McDonald is another genius doing this. It gives all kinds of toys to the kids. So as Buffett’s own Geico Car insurance, did you see all these “stupid” ads on TV?

Geico = a cool car insurance company.

2) Frog is not as alert to a slow cooker compared to being put into hot water. I know I have similar problem. Take my loss on Longtop as an example, I did not sell when it dropped a little every day. Today I decided to sell some eventually because it dropped more (under $17 the IPO price).

reading picture
(source: creighton.edu)

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Categories
China Stocks

Buffett and PetroChina

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These days “Buffett sold PetroChina stocks” are all over the news, especially in the Chinese news media. After all, Warren has the best track record among stock investors in our time. But, what should we, average investor, read from this news? Or (on the other hand) can we simple ignore this news?

First let me correct the news headline. I think we should say “Buffett reduced his stake in PetroChina H shares”, from about 11% to 5.5% of floating PetroChina H shares. Second we should not discount Buffett’s move here. Unlike Greenspan and many others, he is the guy does real investing, and beat the market (S&P 500) consistently. Of course I’m not saying we should go to another polar: follow him blindly.

PetroChina gas station pic

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Categories
Fun

Buffett, Siegel and Wharton Students

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Jeremy Siegel, a Wharton Finance professor and a well known author, took 100 Wharton students to see Buffett as an annual tradition between the school and the Oracle of Omaha. Here is Jeremy’s report. You don’t need to read it all. I think this is the most important part: “Priorities:…But Warren does not stew about past mistakes. He wisely counsels that anything that happens to your finances is secondary to the important things in life – picking a suitable and compatible mate, developing a relationship with your children, and doing something that you enjoy…”

Laura  Rowley, a journalist and an author, also shared similar views.

Categories
Stocks

A Closer Look at Oralce of Omaha

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If you read my blog for a while, you know I am a fan of Warren Buffett. Not just because he is the second richest man in the world; it has more to do with his investment philosophy and the way he lives his life. Last night CNBC’s had an one hour show in which the reporter spend one day with Warren and I liked it very much; and I gurantee it’s much more insightful than Jim Cramer’s Mad Money show. One of the question people usually ask is “why does not Warren live in New York, the financial center of the world; and instead live in Omaha, a small boring city in Mid-west”. I know the answer because I heard it from my friend before. But Warren’s answer still left deep impression on me. He said “if I stayed in New York, I would get 100 good ideas (and get distracted). While in Omaha I can focus on one great idea”.

I think this “focus” thing is very important, be it in stock market, business, career or personal life. While I talked a lot about the mistakes I made in stock market in my “Stock Lessons” series, I think “lose the focus” is the main reason.

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Categories
Stocks

Words of Wisdom

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Words from Warren Buffett’s interview, mostly regarding his opinion on the markets, the full article is here.

…Common stocks are part of a business. Markets are there to serve you, not to instruct you. You can often find a couple of companies that are out of line. Find one; get rich. Most people think that what the stock does from day to day contains information, but it doesn’t. It isn’t just something that wiggles around. The stock market is the best game in the world. You can take advantage of people who have no morals. High prices inside of a year will typically be 100% of the low price. Businesses don’t change in value that much. That is simply crazy. There are extreme degrees of fluctuation, and Mr. Market will call out the prices. Wait until he is nutty in one direction or the other. Put in a margin of safety. Don’t find a bridge that says no more than 10,000 pounds when you have a 9800 pound vehicle. It isn’t a function of IQ, but receptivity of the mind.

When investing you don’t have to invest in all 10,000 companies available, you just have to find the one that is out of line. Mr. Market is your servant. Mr. Market is your partner and wants to sell the business to you everyday. Some days he is very optimistic and wants a high price, others he is pessimistic and will sell at a low price. You have to use this to your advantage. The market is the greatest game in the world. There is nothing else that can, at times, get this far out of line with reality. For example, land usually only fluctuates within a 15% band. Negotiated transactions are less volatile. Some get this; others don’t. Just keep your wits about you and you can make a lot of money in the market… 

BTW, words from Fortune cookie today, “A new hat will brighten your day give you an updated look”.