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Posts Tagged ‘warren buffett’

“The Warren Buffett way outlines his career and presents examples of how his investment techniques and methods evolved and the important individuals in that process. It also details the key investment decisions that produced his unmatched record of performance.”

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ebooks free download: The Warren Buffett Way

The Snowball – Warren Buffett and the Business of Life, by Alice Schroeder.

A few days ago I started reading this, and I have to say I really don’t want to stop reading it (all 800ish pages). I sort of expected an boring story about a person in something that is imagined to be a rather unexciting industry (investing).

Seriously I couldn’t have been more wrong.

This book is an amazing insight at the life of one of the greatest, most most amazingly brilliant people that history has seen, and it’s funny, sad, exciting – a whole range of unexpectedness. in case you don’t know, here we have a comprehensive look at the life of the most wealthy men in the world – Warren Buffett. During 2008 he was crowned king the worlds wealthiest man holding a worth of $62,000,000,000.

$62 FREAKING-BILLION!!!!!!!

OK, let’s take a closer look at that…

If I earn $10,000,000 every year (which isn’t too unpleasant) it would take to earn as much as this man. WOW. if I had started hording $10,000,000 per year since 1AD I would be about one third of having the wealth that this man has. Mind blowing.

OK now… I’ve calmed myself down enough to finish with this book review.

It’s hard to say just how great this is, what I can say is if you don’t have your book yet go order it right now

What really impressed me about this man is how he came from nowhere, he didn’t start with his parents fortune, in fact he actually started selling golf balls and delivering papers around town. Plus he didn’t even invent something new, what he did do was study harder, gain more skills, and work harder than anyone else before him. It just makes what this man has created more impressive.

The dedication and work ethic of this man is one of the most stand-out, take home lessons you will get from this if you really desire a truly amazing life you better be ready and willing to work your butt off.

What really stood out to me from this book? More than i have time to list here however what really spoke to me was…

1. if you wish to be successful knowledge is key, never EVER stop Learning.

2. Delaying gratification, in other words to what it takes now to have what you want later.

3. if you want long term success (and is there any other type) then you always need to stay completely honest, integrity is your biggest asset.

4. the next biggest assets will be the relationships you build, don’t ever forget that.

5. where you come from really doesn’t matter at all, where you begin doesn’t affect where you finish in life.

So I guess I should wind up this article. in closing I firmly recommend you study the Snowball. if you want to build a massively successful business then knowledge is going to be your main weapon, there are not many that have even come close have even approached close to Warren’s triumph, and I think he is one of the greatest to learn from.

The Snowball Warren Buffett and the Business of Life – Book Review

I understand you make money off dividends, but when someone like Warren Buffet says he likes to buy and hold forever, how does his net worth go up so much, besides it being an asset…I mean from a liquid perspective if he doesn’t sell his stocks, and ignoring dividends, how else do you make money? Is his all from Berkshire?

How do you make money on stocks if you never sell them? Like with Warren Buffett, besides the dividends??

For Public Speaking I am doing an informative speech on Warren Buffet the investor, and Warren Buffett the philanthropist. I already have some of the facts like Buffett became rich from Berkshire and that he plans to donate a lot of money to the bill and Melinda Gates foundation.
But are there any interesting facts you guys would mind sharing with me or an idea to make my speech stand out from the rest. I am the only one speaking on Buffett in this class, but others are doing him during different classes.

How can I make a Warren Buffet speech interesting?

By SCOTT PATTERSON

The man considered by many to be the greatest investor of all time just had his worst year ever.

But the results released Saturday for Warren Buffett’s company, Berkshire Hathaway Inc., also demonstrate how recently, and over time, the investor has positioned his far-flung empire to weather the financial storm.

Associated Press

Mr. Buffett, in his annual letter, read closely by shareholders and nonshareholders alike, reported Berkshire in 2008 lost 9.6% in book value per share, a common metric Berkshire uses to track performance. that marks the biggest decline since mr. Buffett took over in 1965, when it was a family-run East Coast textile maker.

Mr. Buffett conceded he “did some dumb things.” among them: scooping up shares of oil giant ConocoPhillips when oil prices were near a high and investing $244 million in a pair of Irish banks that hit trouble, resulting in an 89% loss.

Berkshire shares fell nearly as much as the rest of the market last year, indicating that investors are worried about the company’s ability to keep growing. in 2008, Berkshire’s Class A stock fell 32%. This year, the shares are down nearly 19%, slightly better than the Dow Jones Industrial Average.

Yet many analysts were pleased that the decline in book value per share wasn’t steeper. and mr. Buffett’s results also show he has made moves that have paid off and should continue to do so even if economic woes persist, as he predicts.

He limited his exposure to complex and potentially costly derivatives in his reinsurance unit, General Re Corp. he has $24.3 billion in cash that can be used to find bargains in a distressed market. and he’s made several investments in preferred stock of firms such as Goldman Sachs Group Inc. that pay out steady income of 10% or more.

“He’s done a great job to prepare for this,” said Paul Howard, an analyst at Langen McAlenney, a Hartford, Conn., research group, who rates Berkshire a “buy.” “He’s got good businesses that are generating a lot of cash, and he’s going to continue to put that money to work.”

Berkshire’s substantial insurance holdings haven’t needed to take the massive write-downs on toxic subprime securities that have plagued much of the financial industry in the past two years. One reason is mr. Buffett’s longstanding dislike of complex derivatives, which he famously called “financial weapons of mass destruction” in his 2002 shareholder letter and which he railed on again in his latest letter. he pushed General Re, the large reinsurance company Berkshire acquired in 1998, to disentangle itself from a vast web of derivatives — financial instruments tied to the value of other securities, such as stocks or bonds — over the course of five years, winding down its book of 23,218 derivatives contracts at a loss of about $400 million, he said in the letter. the losses may have been far more substantial if General Re had held onto to the contracts, mr. Howard said.

“Upon leaving, our feelings about the business mirrored a line in a country song: ‘I liked you better before I got to know you so well,’” mr. Buffett wrote, referring to General Re’s derivatives book.

Separately, Berkshire took a loss of $5.1 billion in the fourth quarter on several derivatives contracts entered into in recent years. the contracts, essentially insurance policies against long-term declines in U.S. and foreign stocks, expire in 15 or 20 years. Berkshire will have to pay out if the indexes are below where they stood when the deals were struck. the derivatives, whose current estimated value has to be reflected on Berkshire’s books, are one reason the company reported a grim fourth quarter on Saturday — its fifth year-over-year quarterly decline.

The $117 million quarterly gain it eked out in the quarter marked a 96% drop from last year’s $2.95 billion in fourth-quarter net income.

Beyond commenting on Berkshire, mr. Buffett shared his views on the broader economy and financial systems. he doesn’t expect the economy to improve soon but did expect better times, eventually.

“Our country has faced far worse travails in the past,” he said. “Without fail, however, we’ve overcome them.” he declined to draw a correlation between stocks and economics, saying that while he was certain the economy would be “in shambles for 2009,” that “does not tell us whether the stock market will rise or fall.” he credited the government for stepping in with massive assistance last year, saying the intervention was “essential” to avoiding a total breakdown. But he cautioned there could be “unwelcome aftereffects,” such as inflation.

He contended the “investment world has gone from underpricing risk to overpricing it,” which he said is reflected by investor appetite for Treasury bonds. Future historians will comment on the Internet bubble of the 1990s and the housing bubble of the early 2000s, he said, but “the U.S. Treasury-bond bubble of late 2008 may be regarded as almost equally extraordinary.”

Write to Scott Patterson at scott.patterson@wsj.com

Printed in the Wall Street Journal, page C3

Warren Buffett's Berkshire Reports Worst Year Ever

I mean he uses Berkshire Hathaway’s money to purchase the stocks, so who technically owns the stock, Buffett or Berkshire since a corporation is a seperate legal person?

Does Warren Buffett own all the stock of all those companies he buys?

Billionaire investor Warren Buffett plans to distribute more than $30 billion of his stock to the Bill and Melinda Gates Foundation.

Buffett, 75, plans to commit 10 million class B shares of his company, Berkshire Hathaway, to the Gates Foundation. They will be distributed at a rate of 5 percent of the balance annually. Based on the current value of the stock, Buffett’s commitment is more $30 billion, which doubles the size of the funds available to the Gates Foundation.

The Gates Foundation will ultimately receive 85 percent of Buffett’s personal wealth, rather than the investor’s three children or the foundations that they run.

“My kids were elated when I told them (about the Gates Foundation donation). They knew my views on inherited wealth and shared them,” Buffett said during a press conference on Monday. “I believe in equality of opportunity…They should not inherit my position in society, based on the womb that they were born from.”

Buffett, a long-time friend of Gates, said he chose to allocate the bulk of his wealth to the Gates Foundation after becoming familiar with the organization and the results it had achieved, based on dollars invested.

“The results are terrific,” Buffett said.

The Gates Foundation focuses on global health issues, such as the GAVI Alliance to distribute vaccines to children in poor countries, and education, such as the United Negro College Fund Gates Millennium Scholars Program.

“We’ve known Warren since 1991, and it is his view that wealth should go back to society that got us thinking of our own foundation,” Gates said during the press conference.

While Buffett will serve as a director on the Gates Foundation, he said he prefers spending his time as a professional money manager at Berkshire Hathaway and leaving the details of investing his charitable contributions to others.

When investing, Buffett said he seeks companies that are easy to understand. but the billionaire noted that philanthropy is the opposite. he said it requires a willingness to take large risks to fix complex problems that others have likely failed trying to solve.

The Gates Foundation not only faces that challenge but also the challenge of doubling the level of its funding to charities.

“It’ll be a big challenge to make sure we’re using the money in the right way,” Gates said. “We’ll be giving away (a combined) $3 billion a year and will do our best to make sure all the money is well spent.”

The Gates Foundation plans to delve deeper in its existing areas of focus, Melinda Gates said during the press conference. It will also possibly expand into other issues, such as microlending in order to help poor regions become more self-sufficient in agriculture and biotech, she said.

She added that despite Buffett’s financial commitment, the Gates Foundation will continue to partner with other charitable foundations to maximize financial resources and lessons learned. the Gates Foundation, for example, works with the Michael and Susan Dell Foundation to invest in Texas schools, as well as the David and Lucile Packard Foundation to deliver medicines in India.

Buffett’s financial commitment to the Gates Foundation is also contingent upon either Gates or his wife remaining actively involved in the organization. Earlier this month, Gates announced that in two years, he will be stepping down from his daily involvement with Microsoft as its chief software architect, in order to concentrate on the foundation full-time.

Reuters contributed to this report.

Buffett pledges $30 billion to Gates foundation

How does an average Joe find out what stocks Warren Buffett is investing in lately?

In a day of important talking, Warren Buffett trumps President Obama.

The president is traveling to Pittsburgh to give an update on the state of the economy. last year, he promised to work to rebuild the economy on a “solid foundation.” Yet it’s an economy amazingly like George W. Bush’s, except for the lack of a housing bubble and the illusion of growth. oh, and millions of unemployed and underemployed people. To be fair to the president, events are increasingly out of his control. But we might have more confidence if his chief economic advisers were not members of the Wall Street elite.

The more interesting words might come from Buffett as he testifies before the Financial Crisis Inquiry Commission on the rating agencies and the financial crisis. He owns a sizable piece of Moody’s but, according to WSJ Deal Journal, he’s been reducing his stake in recent quarters. In live blogging, Buffett is continuing to say that the ratings agencies were among the many who missed the bubble (hmmm). Still hoping for some of the vinegary honesty of which the Oracle of Omaha is capable. this was the man who called derivatives “financial weapons of mass destruction” in 2003. Apparently the memo didn’t get to Moody’s.

The reality is the credit agencies, to enhance their profitable relationships with investment banks and other playerz, failed in their ostensible role as impartial raters of risk. like the regulators, they were far too cozy with the old order and its swindles. when average financial journalists understood the problems the economy faced in 2005-2006, it didn’t take high-paid geniuses at Moody’s to figure it out, or at least voice it. more than investors paid the price.

Zipcar wants to driveA demolition derbyAlso called Wall Street

When rating agencies attack: Warren Buffett's cred is on the line

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By Mark Hulbert, MarketWatch

ANNANDALE, Va. (MarketWatch) — the stock market’s extraordinary volatility of late brings to mind Warren Buffett’s classic line that one of the primary purposes of stock market forecasters is to make fortune tellers look good.

/quotes/comstock/10w!i:dji/delayed DJIA 10,137, -122.36, -1.19%

Take Tuesday: the Dow Jones Industrial Average /quotes/comstock/10w!i:dji/delayed (DJIA 10,137, -122.36, -1.19%) at one point early in the session was down nearly 300 points, raising fears of a waterfall decline similar to that seen in the Fall of 2008, following the bankruptcy of Lehman Brothers.

But then Dow the rallied, finishing the day down just 23 points. the S&P 500 index /quotes/comstock/21z!i1:inx (SPX 1,089, -13.65, -1.24%) actually eked out a small gain.

Does that mean the short-term direction of the market has now turned up? Or does it mean that the bear is just taking a break, and will shortly return in full force?

Of course, no one knows for sure.

Given how difficult it is to forecast the stock market’s short-term direction at any time, much less now, you might imagine that it is even more difficult to forecast the market’s direction over longer periods of time.

Ironically, however, that may not be the case. Statisticians tell us that it is less hard (note I didn’t say easy) to predict the market’s return over the next six to 12 months than it is to forecast its return over the next day. and it’s even less difficult still when the forecast horizon extends to longer periods of time.

Consider an econometric model maintained by Sam Eisenstadt, the former research chairman at value Line, inc. /quotes/comstock/15*!valu/quotes/nls/valu (VALU 19.80, 0.00, 0.00%) , the author of the famed value Line stock-ranking system, and a rigorous statistical student of the stock market for over 60 years. he reports that his model sports an impressive track record back to 1952 in forecasting six-month returns. (Its r-squared, for the statisticians among you, is 0.3).

Or consider another econometric model with similar statistical success devised by Norman Fosback, editor of Fosback’s Fund Forecaster and formerly head of the Institute for Econometric Research. His primary trend model focuses on the market’s returns one to five years into the future, but makes no predictions about the market’s shorter-term movements.

What are these two models saying right now?

Interestingly, both are quite bullish. Eisenstadt tells me that his model is currently forecasting a 20% return for the S&P 500 index /quotes/comstock/21z!i1:inx (SPX 1,089, -13.65, -1.24%) over the next six months. Fosback reports in the latest issue of his newsletter that his model is forecasting a 26% total return for the stock market over the next year and a 75% five-year return (equivalent to around 12% annualized).

Note carefully that, just because these models have good track records, there is no guarantee that they will be right. An r-squared of 0.3, for example, even though statistically quite impressive, still means that the bulk of the stock market’s returns over any given six-month period cannot be explained or predicted by the model.

Nevertheless, we should remember their past success when we are tempted to throw up our hands in despair at predicting the stock market’s daily ups and downs. We don’t have to be good at forecasting those gyrations in order to do very well, thank you, in predicting the market’s longer-term trend.

Mark Hulbert is the founder of Hulbert Financial Digest in Annandale, Va. he has been tracking the advice of more than 160 financial newsletters since 1980.

Longer term in focus