В две изречения Уорън Бъфет каза най-същественото за ефективните пазари: „Правилното наблюдение, че пазарът често е ефективен, доведе академиците, инвестиционните посредници и корпоративните мениджъри до погрешното заключение, че той винаги е такъв. Разликата между двете твърдения е като между деня и нощта.“
Способността да я разпознавате в реални условия е решаваща за това дали ще се озовете с богатство от $50 млрд. или с възвращаемостта на средния инвеститор. Бъфет натрупа състояние именно от спорадичните случаи, в които пазарът е неефективен.
Хипотезата за ефективния пазар е основа на финансовия свят вече почти 50 години. Един от създателите й Майкъл Йенсен бе казал, че в икономическата наука няма твърдение, подкрепено от по-солидни емпирични доказателства. Подобно на свои съвременници, като Бъртън Малкийл, чиято книга „Разходка по Уолстрийт“ е преиздавана вече осем пъти, проф. Йенсен бе нетърпелив да разгадае мистерията на индустрията за финансови услуги. Движението на цените е случайно, така че е безсмислено да плащате за активно управление.
Пазарната ефективност е теория за начина, по който пазарите реагират на информацията, и всъщност не доказва, че те съдействат за общата икономическа ефективност, макар че не можем да отречем връзката между двете концепции. Дълго време на участниците в пазара и десните идеолози им изнасяше да насърчават това объркване. Те твърдяха, че щом пазарите са ефективни, държавната намеса в тях е контрапродуктивна, а по-свободният режим означава по-висока ефективност.
Всеки човек с основни познания по финанси знае, че има три версии на хипотезата. Според най-крайния вариант всичко, което можете да разберете за стойността на ценните книжа, се съдържа в цената им. Той е тясно обвързан с идеята за рационалните очаквания, която доминира макроикономическите политики в последните 30 години. Държавната намеса в повечето случаи е безплодна, паричната политика трябва да следва прости и константни правила, пазарните цени са обмислено отражение на фундаментални стойности и не съществува такова нещо като балони в цените на активите.
Тези твърдения не само не отговарят на емпиричните данни, но съдържат противоречия. Ако цените отразяват цялата налична информация, защо някой ще си прави труда да се сдобива с нея? Ако пазарите са информационно ефективни, защо се сключват толкова сделки между хора с различни очаквания за бъдещи развития? Ако теорията бе вярна, действията, които претендира да обяснява, почти нямаше да съществуват.
Макар хипотезата за ефективните пазари да не е достоверна, тя може да хвърли известна светлина върху нещата. Абсурдите при рационалните очаквания идват от стремежа към откриване на точни зависимости, присъщ на много икономисти, бъркащи случайните прозрения с универсални истини. Икономическите модели са илюстрации и метафори, а не изчерпателни описания дори на частта от света, която описват. Можете да научите много от теорията, ако не я възприемате твърде сериозно и като Бъфет се концентрирате върху спорадичната неефективност, а не върху честата ефективност.
Най-меката версия на хипотезата за ефективните пазари ни казва, че миналите цени не са индикатор за това, което ще се случи в бъдеще. Има доста доказателства в подкрепа на това – понякога е чиста загуба на време, по-добре да изучавате линиите на ръката си. В същото време има признаци за тенденцията краткосрочните движения на цените да се запазват – тогава набраната инерция е истинска. Ако можете да уцелите случаите, в които краткосрочният тренд става дългосрочен, ще станете богат. Напълно възможно е да натрупате пари (или да чертаете политика), като разчитате циклите на образуване и спукване на балони. Но повечето участници на пазара не успяват.
Според компромисната версия на теорията пазарите отразяват цялата обществено достъпна информация за ценните книжа. Всичко, което е общоизвестно, фигурира в цената, така че констатации като „General Electric е добре управлявана компания“ и „Великобритания има голям бюджетен дефицит“ са безполезни за инвеститорите. Вътрешната информация и собственият анализ могат да добавят стойност.
Първата версия на теорията за ефективния пазар е популярна, защото светът, който описва, е лишен от външни социални, политически и културни влияния. Но ако реалността се определя от възгледите за света, не само ще трябва да проучим как се формират и повлияват те (нещо, което икономистите не желаят да правят), но моделите и прогнозите ще зависят от тях. Разбира се, моделите и прогнозите зависят от вярванията, така че разбирането за начина, по който се формират, е задължително. Икономиката не е царица на социалните науки, а слугиня, и трябва да се опре на антропологията, психологията и социологията на идеологиите. Бъдещето на инвестирането и икономиката е в по-еклектичния подход.
петък, 9 октомври 2009 г.
сряда, 7 октомври 2009 г.
24/7 WALL ST: Symetra, a Buffett Holding, Plans IPO… Again
Posted: October 6, 2009 at 11:56 am
After the close on Monday came a little-known IPO filing from a life insurance operation called Symetra Financial Corp. It turns out that the Bellevue, Washington-based insurer has no terms for the sale but listed a sale of up to $575 million in the initial public offering filing. This is not the first attempt to come public, but it turns out that Warren Buffett’s Berkshire Hathaway Inc. (NYSE: BRK-A) and White Mountains Insurance Group, Ltd. (NYSE: WTM) effectively control the company.
This one filed for an IPO of up to $750 million back in 2007, but the insurer pulled the plug on the IPO in 2008. You can guess the reason listed… ‘unfavorable market conditions.’
Symetra palns to trade under the stock ticker “SYA” on the New York Stock Exchange. It has an impressive lineup of joint book running managers: BofA Merrill Lynch, JPMorgan, Goldman Sachs and Barclays Capital.
We noted that Berkshire Hathaway is a shareholder, and that stake is listed as 26.3%. But other shareholders include White Mountains Insurance Group, Ltd. (NYSE: WTM) also listed with a 26.3% stake. Franklin Mutual Advisers, LLC, a unit of Franklin Resources, Inc. (NYSE: BEN) is listed as a 11.7% stakeholder. Even Och-Ziff Capital Management Group LLC (NYSE: OZM) is listed as a 6.6% stakeholder via its OZ Master Fund, Ltd. Other stakeholders include Vestar Capital Partners, Highfields Capital Management, and Caxton Associates.
Based on how Symetra’s stakeholders are listed and per the filing, this is effectively controlled by Symetra is controlled by Berkshire’s General Re and White Mountains. This time the company and holders will sell shares, although again terms are not disclosed.
Symetra’s revenues fell by almost 9% in 2008 from 2007 to $1.45 billion, with about 60% coming from group and individual insurance lines. Most of the drop was attributed to investment losses.
Posted: October 6, 2009 at 11:56 am
After the close on Monday came a little-known IPO filing from a life insurance operation called Symetra Financial Corp. It turns out that the Bellevue, Washington-based insurer has no terms for the sale but listed a sale of up to $575 million in the initial public offering filing. This is not the first attempt to come public, but it turns out that Warren Buffett’s Berkshire Hathaway Inc. (NYSE: BRK-A) and White Mountains Insurance Group, Ltd. (NYSE: WTM) effectively control the company.
This one filed for an IPO of up to $750 million back in 2007, but the insurer pulled the plug on the IPO in 2008. You can guess the reason listed… ‘unfavorable market conditions.’
Symetra palns to trade under the stock ticker “SYA” on the New York Stock Exchange. It has an impressive lineup of joint book running managers: BofA Merrill Lynch, JPMorgan, Goldman Sachs and Barclays Capital.
We noted that Berkshire Hathaway is a shareholder, and that stake is listed as 26.3%. But other shareholders include White Mountains Insurance Group, Ltd. (NYSE: WTM) also listed with a 26.3% stake. Franklin Mutual Advisers, LLC, a unit of Franklin Resources, Inc. (NYSE: BEN) is listed as a 11.7% stakeholder. Even Och-Ziff Capital Management Group LLC (NYSE: OZM) is listed as a 6.6% stakeholder via its OZ Master Fund, Ltd. Other stakeholders include Vestar Capital Partners, Highfields Capital Management, and Caxton Associates.
Based on how Symetra’s stakeholders are listed and per the filing, this is effectively controlled by Symetra is controlled by Berkshire’s General Re and White Mountains. This time the company and holders will sell shares, although again terms are not disclosed.
Symetra’s revenues fell by almost 9% in 2008 from 2007 to $1.45 billion, with about 60% coming from group and individual insurance lines. Most of the drop was attributed to investment losses.
THE PENINSULA: Bid for Cadbury: Search for deal that both sides can swallow
10/3/2009 0:41:57
Source ::: FINANCIAL TIMES
by Jonathan Birchall
and Jenny Wiggins
Irene Rosenfeld, chief executive of Kraft, has maintained a full programme of public appearances since her £10.2bn takeover approach to Cadbury last month. But amid talking about women and leadership in Toronto and efforts to combat global hunger in New York, Rosenfeld has kept carefully to her script on Cadbury.
Kraft has said it will remain “disciplined” in its pursuit of the UK confectionary company, which Ms Rosenfeld told company employees last week was a desirable but not essential acquisition. Kraft maintains that it can finance a formal bid without needing to sell other brands, and that it can do so while keeping the investment grade credit rating on its $20bn (£12.5bn) gross long-term debt.
The company has also maintained its silence on expectations that it will need to raise its original indicative cash and shares offer of 745p a share, made on September 7, which represented a 30 percent premium on Cadbury’s closing share price of 568p on the previous Friday.
However, the value of the offer to Cadbury shareholders has been weakened by the 7 percent fall in Kraft’s share price since the bid was announced, partially offset by the strengthening of the dollar against sterling. With Kraft’s share price at yesterday lunchtime in New York at $25.89, the original approach was worth 719p a share, or £9.84bn.
The strength of Kraft’s third-quarter results, due in the first week in November before the UK deadline for a formal bid, will also be a factor that Cadbury shareholders will consider when deciding whether to take Kraft’s paper. The company is expected to deliver improvements in operating margins, boosted in part by lower commodity costs. Kraft has said it will improve its operating margins to the mid-teens by 2011, up from an adjusted 12.3 per cent in 2008.
Analysts at Nomura in London argued yesterday that Kraft could raise its offer to 850p a share, which would value Cadbury at 13.5 times 2009 earnings before interest, tax, depreciation and amortisation, and increase the cash portion of its offer from 300p a share to 440p a share. That would be almost a 50 percent premium to the pre-bid share price.
Nomura said Kraft could afford to raise its offer to 850p and maintain its credit rating, and could appease its investors by increasing the targeted cost savings from a takeover from $625m to $750m.
Kraft’s original $625m in estimated savings from shared distribution and marketing excludes current cost-cutting efforts at both Cadbury and Kraft. Kraft’s largest shareholders have given no public indications of what they would consider an acceptable price to pay for Cadbury. In his only public comments on the proposed deal, Warren Buffett, who owns 9.4 percent of Kraft’s shares, said he believed Kraft’s original offer already represented a “full price” for Cadbury, given what he said was the undervaluation of its own stock.
While Kraft says it will not sell brands to fund the bid, it may be prepared to dispose of lower-margin businesses, such as its Maxwell House coffee division or its Oscar Mayer meats as part of its long-term strategic development. In 2007, it followed up its $7.2bn cash acquisition of Danone’s LU biscuit division by selling its Post cereals business to Ralcorp for $1.65bn.
Kevin Dreyer, research analyst at US fund manager Gamco Investors, which owns about 1 per cent of Cadbury, said the fund would look favourably on an offer towards 860p. He added he had “no issue” with Kraft taking ownership of Cadbury. “There’s a lot of benefit from complementary geographic footprints as well as the greater scale ... certainly Cadbury would benefit from Kraft’s scale,” he said.
Analysts say Cadbury has done a good job proving to investors it is worth more than 745p a share. Julian Hardwick, analyst at RBS, said: “I don’t think Kraft has won the argument that Cadbury can’t exist as an independent entity.” Cadbury shares closed yesterday at 803p.
Todd Stitzer, Cadbury chief, told a Sanford Bernstein investor conference last month in London that he was “increasingly” confident the company would deliver on its restructuring plans and that he hoped to deliver a “good” mid-teens profit margin by 2011. Donald Yacktman, whose Yacktman Funds owns 44,200 Kraft shares, said he supported the strategic argument for a merger, but wanted to see how much Kraft was prepared to offer. “It’s not the fit, it’s the price,” he said, noting that for Rosenfeld “this will test her mettle. We’ll find out just how disciplined she really is”.
10/3/2009 0:41:57
Source ::: FINANCIAL TIMES
by Jonathan Birchall
and Jenny Wiggins
Irene Rosenfeld, chief executive of Kraft, has maintained a full programme of public appearances since her £10.2bn takeover approach to Cadbury last month. But amid talking about women and leadership in Toronto and efforts to combat global hunger in New York, Rosenfeld has kept carefully to her script on Cadbury.
Kraft has said it will remain “disciplined” in its pursuit of the UK confectionary company, which Ms Rosenfeld told company employees last week was a desirable but not essential acquisition. Kraft maintains that it can finance a formal bid without needing to sell other brands, and that it can do so while keeping the investment grade credit rating on its $20bn (£12.5bn) gross long-term debt.
The company has also maintained its silence on expectations that it will need to raise its original indicative cash and shares offer of 745p a share, made on September 7, which represented a 30 percent premium on Cadbury’s closing share price of 568p on the previous Friday.
However, the value of the offer to Cadbury shareholders has been weakened by the 7 percent fall in Kraft’s share price since the bid was announced, partially offset by the strengthening of the dollar against sterling. With Kraft’s share price at yesterday lunchtime in New York at $25.89, the original approach was worth 719p a share, or £9.84bn.
The strength of Kraft’s third-quarter results, due in the first week in November before the UK deadline for a formal bid, will also be a factor that Cadbury shareholders will consider when deciding whether to take Kraft’s paper. The company is expected to deliver improvements in operating margins, boosted in part by lower commodity costs. Kraft has said it will improve its operating margins to the mid-teens by 2011, up from an adjusted 12.3 per cent in 2008.
Analysts at Nomura in London argued yesterday that Kraft could raise its offer to 850p a share, which would value Cadbury at 13.5 times 2009 earnings before interest, tax, depreciation and amortisation, and increase the cash portion of its offer from 300p a share to 440p a share. That would be almost a 50 percent premium to the pre-bid share price.
Nomura said Kraft could afford to raise its offer to 850p and maintain its credit rating, and could appease its investors by increasing the targeted cost savings from a takeover from $625m to $750m.
Kraft’s original $625m in estimated savings from shared distribution and marketing excludes current cost-cutting efforts at both Cadbury and Kraft. Kraft’s largest shareholders have given no public indications of what they would consider an acceptable price to pay for Cadbury. In his only public comments on the proposed deal, Warren Buffett, who owns 9.4 percent of Kraft’s shares, said he believed Kraft’s original offer already represented a “full price” for Cadbury, given what he said was the undervaluation of its own stock.
While Kraft says it will not sell brands to fund the bid, it may be prepared to dispose of lower-margin businesses, such as its Maxwell House coffee division or its Oscar Mayer meats as part of its long-term strategic development. In 2007, it followed up its $7.2bn cash acquisition of Danone’s LU biscuit division by selling its Post cereals business to Ralcorp for $1.65bn.
Kevin Dreyer, research analyst at US fund manager Gamco Investors, which owns about 1 per cent of Cadbury, said the fund would look favourably on an offer towards 860p. He added he had “no issue” with Kraft taking ownership of Cadbury. “There’s a lot of benefit from complementary geographic footprints as well as the greater scale ... certainly Cadbury would benefit from Kraft’s scale,” he said.
Analysts say Cadbury has done a good job proving to investors it is worth more than 745p a share. Julian Hardwick, analyst at RBS, said: “I don’t think Kraft has won the argument that Cadbury can’t exist as an independent entity.” Cadbury shares closed yesterday at 803p.
Todd Stitzer, Cadbury chief, told a Sanford Bernstein investor conference last month in London that he was “increasingly” confident the company would deliver on its restructuring plans and that he hoped to deliver a “good” mid-teens profit margin by 2011. Donald Yacktman, whose Yacktman Funds owns 44,200 Kraft shares, said he supported the strategic argument for a merger, but wanted to see how much Kraft was prepared to offer. “It’s not the fit, it’s the price,” he said, noting that for Rosenfeld “this will test her mettle. We’ll find out just how disciplined she really is”.
OMAHA WORLD HERALD: Gates still has plenty of stock in Berkshire
By Steve Jordon
Originally Published Sunday October 4, 2009
WORLD-HERALD STAFF WRITER
Bill Gates' foundation has been selling Berkshire Hathaway Inc. stock but still has more money invested in Warren Buffett's Omaha-based company.
The reason: Berkshire's stock price has been gaining faster than the Bill & Melinda Gates Foundation has been selling the shares.
On July 1, Buffett made his yearly contribution of Berkshire Class B shares, part of his pledge to give most of his wealth to the foundation over a period of years. This year, the donation was 428,688 shares, worth $1.25 billion.
The latest donation boosted the foundation's holdings to 1,679,838 shares, according to filings with the Securities and Exchange Commission. (Each Class A share of Berkshire can be converted into 30 shares of Class B. The Class B shares can't be re-converted into Class A stock.)
The stock was priced at $2,924 per share July 1, making the foundation's shares worth about $4.9 billion.
By the end of last week, the foundation had sold 50,200 shares, an average of 740 shares per trading day, reducing its shares to 1,629,638.
Due to the 10.2 percent rise in Berkshire's stock price since July 1, those shares are worth $5.3 billion.
A year ago, the Gates Foundation's Berkshire shares were worth even more — nearly $5.9 billion — even before Buffett's 2009 donation. Berkshire's shares are still 30 percent below their year-ago price.
Proceeds from the foundation's recent sales have totaled about $150 million. The money could be headed for its charitable programs or it may be going into other investments to await spending.
Buffett has said he expects the foundation to sell all the Berkshire stock and spend the proceeds over the next several decades. Selling the stock won't depress the day-to-day price, he has said, because the total number of shares traded each day is relatively small, even with the foundation's recent regular sales.
Vanity Fair
Buffett raised objections to a deal that former Treasury Secretary Henry Paulson tried to arrange during last year's financial crisis, saying Paulson was too closely tied to Goldman Sachs Inc., according to the issue of Vanity Fair due out this week.
Rawstory.com reported on the magazine's account of Paulson's effort to have Goldman acquire troubled Wachovia Corp., calling for the Federal Reserve to supply financial guarantees.
Andrew Ross Sorkin, in an excerpt from a forthcoming book printed in the magazine, said the deal was nearly completed. Paulson contacted Goldman CEO Lloyd Blankfein, who also was a board member of Wachovia, and Wachovia CEO Robert Steel, a former vice chairman of Goldman and a former No. 2 man at the Treasury Department under Paulson.
Buffett also was contacted about investing in the merged company, Sorkin reported, but told a banker at Goldman that it would never happen.
“By tonight, the government will realize they can't provide capital to a deal that's being done by the former firm of the Treasury secretary with the company of a former vice chairman of Goldman Sachs and former deputy Treasury secretary,” Buffett said, according to the book. “There is no way. They'll all wake up and realize, even if it was the best deal in the world, they can't do it.”
Others also realized the deal would harm Paulson's credibility and feed conspiracy theorists, who would accuse Paulson of helping his friends financially.
Sorkin wrote that the deal died after Paulson, Fed Chairman Ben Bernanke and Timothy Geithner, president of the Federal Reserve of New York at the time and now Treasury secretary, decided against it, in part, because of the “optics” of Goldman's ties to the government.
Buffett eventually invested $5 billion in Goldman to help its finances. Dec. 31, 2008, Wachovia was acquired by Wells Fargo & Co., of which Berkshire is a major stockholder.
Richest man
The chairman and CEO of the electric car company that attracted an investment by Berkshire is China's richest man, the London Telegraph reported.
Wang Chuanfu, 43, of BYD Inc., is worth $5.1 billion following gains in the price of his company's stock, triggered in large measure by Buffett's investment, the newspaper said.
“I was shocked, I really was,” said Rupert Hoogewerf, who keeps track of Chinese billionaires. “There's no way you could have predicted he would rise to the top, but we could not find anyone else worth as much.”
Wang's parents were poor farmers who died while he was in school. He worked as a government researcher before borrowing $300,000 from relatives in 1995 to start a company that makes rechargeable cell phone batteries.
The battery business led to the electric car business, attracting the attention of Berkshire's vice chairman, Charlie Munger. Berkshire invested $232 million in BYD, receiving about a 10 percent stake that is worth about $1 billion more today.
BYD so far has sold fewer than 100 of the electric cars but plans to begin large-scale production and sales in China soon and to enter the U.S. market next year.
The newspaper said the “Buffett effect” helped drive up the stock's price more than 380 percent so far this year.
Stock price
Over the past year, Buffett's wealth declined the most, dollarwise, among those listed in Forbes magazine's new tally of the richest Americans. The decline was due to Berkshire's stock price.
Once more than $140,000 for a Class A share, the price dipped as low as $70,050 during the market crunch before recovering to the $100,000 range recently.
Buffett's Berkshire shares were worth nearly $59 billion at one point last year, before the market slide and before his Gates Foundation donation. Forbes, which released its list last week, put his wealth at $40 billion, second place behind his friend, Microsoft founder Bill Gates.
The 400 people on the Forbes list saw their combined wealth decline by $300 billion from a year earlier, the magazine reported, to $1.27 trillion, thanks to falling stock and real estate prices. Counting divorces and fraud, the magazine said, 314 of those on the list had less wealth than a year ago.
Gates, whose net worth declined by $7 billion to $50 billion, beat out Buffett for the 16th straight year, Forbes said.
If you combined the fortunes of the four Walmart heirs, they would be No. 1 with $80 billion. The top 10 lost $39.2 billion, or 14 percent of their wealth, Forbes said. The biggest gainer was Dallas banker Andrew Beal, who tripled his wealth to $4.5 billion by buying up cheap loans and assets during the market decline.
Successor
Berkshire's financial deals won't be as profitable under Buffett's successor, according to an analyst with Stifel Nicolaus & Co.
Bloomberg News reported that as an example, Meyer Shields cited the 10 percent annual return that Berkshire is getting from its $8 billion investments in Goldman Sachs Group Inc. and General Electric Co. last fall, when the credit shutdown left the companies needing financial backing.
“When Berkshire bought preferred shares from Goldman Sachs and GE, it's very likely that the imprimatur of the world's most famous investor conveyed a level of confidence that itself contributed to the deals' very generous terms,” Shields said. “Thanks to its solid cash position, Berkshire should always be a competitive acquirer, but the economic impact of Buffett's ‘halo' will probably fade.”
Buffett, 79, has said Berkshire has a succession plan in place, likely splitting his duties among one or more investment officers and a chief executive.
“We expect the ‘Buffett Premium' to wane as the inevitable transition approaches,” Shields wrote in a research note. “Buffett's knowledge and skills are replaceable, but since his iconic status isn't, the economic attractiveness of Berkshire's future investment opportunities will likely decline.”
By Steve Jordon
Originally Published Sunday October 4, 2009
WORLD-HERALD STAFF WRITER
Bill Gates' foundation has been selling Berkshire Hathaway Inc. stock but still has more money invested in Warren Buffett's Omaha-based company.
The reason: Berkshire's stock price has been gaining faster than the Bill & Melinda Gates Foundation has been selling the shares.
On July 1, Buffett made his yearly contribution of Berkshire Class B shares, part of his pledge to give most of his wealth to the foundation over a period of years. This year, the donation was 428,688 shares, worth $1.25 billion.
The latest donation boosted the foundation's holdings to 1,679,838 shares, according to filings with the Securities and Exchange Commission. (Each Class A share of Berkshire can be converted into 30 shares of Class B. The Class B shares can't be re-converted into Class A stock.)
The stock was priced at $2,924 per share July 1, making the foundation's shares worth about $4.9 billion.
By the end of last week, the foundation had sold 50,200 shares, an average of 740 shares per trading day, reducing its shares to 1,629,638.
Due to the 10.2 percent rise in Berkshire's stock price since July 1, those shares are worth $5.3 billion.
A year ago, the Gates Foundation's Berkshire shares were worth even more — nearly $5.9 billion — even before Buffett's 2009 donation. Berkshire's shares are still 30 percent below their year-ago price.
Proceeds from the foundation's recent sales have totaled about $150 million. The money could be headed for its charitable programs or it may be going into other investments to await spending.
Buffett has said he expects the foundation to sell all the Berkshire stock and spend the proceeds over the next several decades. Selling the stock won't depress the day-to-day price, he has said, because the total number of shares traded each day is relatively small, even with the foundation's recent regular sales.
Vanity Fair
Buffett raised objections to a deal that former Treasury Secretary Henry Paulson tried to arrange during last year's financial crisis, saying Paulson was too closely tied to Goldman Sachs Inc., according to the issue of Vanity Fair due out this week.
Rawstory.com reported on the magazine's account of Paulson's effort to have Goldman acquire troubled Wachovia Corp., calling for the Federal Reserve to supply financial guarantees.
Andrew Ross Sorkin, in an excerpt from a forthcoming book printed in the magazine, said the deal was nearly completed. Paulson contacted Goldman CEO Lloyd Blankfein, who also was a board member of Wachovia, and Wachovia CEO Robert Steel, a former vice chairman of Goldman and a former No. 2 man at the Treasury Department under Paulson.
Buffett also was contacted about investing in the merged company, Sorkin reported, but told a banker at Goldman that it would never happen.
“By tonight, the government will realize they can't provide capital to a deal that's being done by the former firm of the Treasury secretary with the company of a former vice chairman of Goldman Sachs and former deputy Treasury secretary,” Buffett said, according to the book. “There is no way. They'll all wake up and realize, even if it was the best deal in the world, they can't do it.”
Others also realized the deal would harm Paulson's credibility and feed conspiracy theorists, who would accuse Paulson of helping his friends financially.
Sorkin wrote that the deal died after Paulson, Fed Chairman Ben Bernanke and Timothy Geithner, president of the Federal Reserve of New York at the time and now Treasury secretary, decided against it, in part, because of the “optics” of Goldman's ties to the government.
Buffett eventually invested $5 billion in Goldman to help its finances. Dec. 31, 2008, Wachovia was acquired by Wells Fargo & Co., of which Berkshire is a major stockholder.
Richest man
The chairman and CEO of the electric car company that attracted an investment by Berkshire is China's richest man, the London Telegraph reported.
Wang Chuanfu, 43, of BYD Inc., is worth $5.1 billion following gains in the price of his company's stock, triggered in large measure by Buffett's investment, the newspaper said.
“I was shocked, I really was,” said Rupert Hoogewerf, who keeps track of Chinese billionaires. “There's no way you could have predicted he would rise to the top, but we could not find anyone else worth as much.”
Wang's parents were poor farmers who died while he was in school. He worked as a government researcher before borrowing $300,000 from relatives in 1995 to start a company that makes rechargeable cell phone batteries.
The battery business led to the electric car business, attracting the attention of Berkshire's vice chairman, Charlie Munger. Berkshire invested $232 million in BYD, receiving about a 10 percent stake that is worth about $1 billion more today.
BYD so far has sold fewer than 100 of the electric cars but plans to begin large-scale production and sales in China soon and to enter the U.S. market next year.
The newspaper said the “Buffett effect” helped drive up the stock's price more than 380 percent so far this year.
Stock price
Over the past year, Buffett's wealth declined the most, dollarwise, among those listed in Forbes magazine's new tally of the richest Americans. The decline was due to Berkshire's stock price.
Once more than $140,000 for a Class A share, the price dipped as low as $70,050 during the market crunch before recovering to the $100,000 range recently.
Buffett's Berkshire shares were worth nearly $59 billion at one point last year, before the market slide and before his Gates Foundation donation. Forbes, which released its list last week, put his wealth at $40 billion, second place behind his friend, Microsoft founder Bill Gates.
The 400 people on the Forbes list saw their combined wealth decline by $300 billion from a year earlier, the magazine reported, to $1.27 trillion, thanks to falling stock and real estate prices. Counting divorces and fraud, the magazine said, 314 of those on the list had less wealth than a year ago.
Gates, whose net worth declined by $7 billion to $50 billion, beat out Buffett for the 16th straight year, Forbes said.
If you combined the fortunes of the four Walmart heirs, they would be No. 1 with $80 billion. The top 10 lost $39.2 billion, or 14 percent of their wealth, Forbes said. The biggest gainer was Dallas banker Andrew Beal, who tripled his wealth to $4.5 billion by buying up cheap loans and assets during the market decline.
Successor
Berkshire's financial deals won't be as profitable under Buffett's successor, according to an analyst with Stifel Nicolaus & Co.
Bloomberg News reported that as an example, Meyer Shields cited the 10 percent annual return that Berkshire is getting from its $8 billion investments in Goldman Sachs Group Inc. and General Electric Co. last fall, when the credit shutdown left the companies needing financial backing.
“When Berkshire bought preferred shares from Goldman Sachs and GE, it's very likely that the imprimatur of the world's most famous investor conveyed a level of confidence that itself contributed to the deals' very generous terms,” Shields said. “Thanks to its solid cash position, Berkshire should always be a competitive acquirer, but the economic impact of Buffett's ‘halo' will probably fade.”
Buffett, 79, has said Berkshire has a succession plan in place, likely splitting his duties among one or more investment officers and a chief executive.
“We expect the ‘Buffett Premium' to wane as the inevitable transition approaches,” Shields wrote in a research note. “Buffett's knowledge and skills are replaceable, but since his iconic status isn't, the economic attractiveness of Berkshire's future investment opportunities will likely decline.”
GURUFOCUS: The private market value of Burlington Northern Santa Fe
Oct. 04, 2009 | Filed Under: BNI
There have been several questions as to the private market value of BNI. While it is difficult to put a number on this, Warren Buffett, when buying a business, always ask what is it worth and suggests looking at recent transactions in the industry to get a better understanding.
As mentioned, the industry has consolidated to just seven players so a reasonable effort to value the railroad would be to look at what these players are doing: The Dakota Minnesota & Eastern Railroad Corp. (D,M&E), a division of Canadian Pacific, recently put its $6 billion plan to ship coal in Powder River on hold. DM&E cited weakness in the economy as well as other regulatory concerns.
This is a 278 mile project with a $6 billion price tag, suggesting that each mile is worth over $21 million. Additionally, D,M&E received a $2.5 billion grant from the Federal Government. While it is unknown whether D,M&E will be successful in efforts to build the railroad, these metrics are quite telling as BNI is currently valued at over $1 million a mile, thus highlighting the margin of safety that is so important when making an investment.
With the stock trading around 80, the company is trading at approximately 14x 2010 earnings and 7x 2010 EBITDA. It should generate over $1.2 billion after capital expenditures and will pay out over $500 million in dividends. As mentioned above, the company has generated a healthy 7% cash flow yield for the last decade and used that cash flow in a wise manner – the shares have decreased by over 160 million. As there is weakness in the economy, the company has suspended its share repurchase plan but those who have been following Buffett know that he has made the bulk of his purchase around these prices.
GURU FOCUS: Warren Buffett On Ben Graham
Oct. 05, 2009
If I have seen further it is by standing on ye shoulders of Giants.” –Isaac Newton
In The Intelligent Investor and Security Analysis, Warren Buffett contributes to the titles by writing a foreword or giving permission to republish the letter he wrote on Ben Graham shortly after he passed away.While the influence is obvious on paper, you really do not get to see the face expressions, tone of voice, etc. that really show how Warren Buffett feels about Benjamin Graham. Words come to life in the Warren Buffett on Ben Graham video which I recently found. While I do not know the exact date of the video, my guess it was recorded around the time the 6th edition ofSecurity Analysis was released (September 2008).
Oct. 05, 2009
If I have seen further it is by standing on ye shoulders of Giants.” –Isaac Newton
In The Intelligent Investor and Security Analysis, Warren Buffett contributes to the titles by writing a foreword or giving permission to republish the letter he wrote on Ben Graham shortly after he passed away.While the influence is obvious on paper, you really do not get to see the face expressions, tone of voice, etc. that really show how Warren Buffett feels about Benjamin Graham. Words come to life in the Warren Buffett on Ben Graham video which I recently found. While I do not know the exact date of the video, my guess it was recorded around the time the 6th edition ofSecurity Analysis was released (September 2008).
24/7 WALL ST: Symetra, a Buffett Holding, Plans IPO… Again
Posted: October 6, 2009 at 11:56 am
After the close on Monday came a little-known IPO filing from a life insurance operation called Symetra Financial Corp. It turns out that the Bellevue, Washington-based insurer has no terms for the sale but listed a sale of up to $575 million in the initial public offering filing. This is not the first attempt to come public, but it turns out that Warren Buffett’s Berkshire Hathaway Inc. (NYSE: BRK-A) and White Mountains Insurance Group, Ltd. (NYSE: WTM) effectively control the company.
This one filed for an IPO of up to $750 million back in 2007, but the insurer pulled the plug on the IPO in 2008. You can guess the reason listed… ‘unfavorable market conditions.’
Symetra palns to trade under the stock ticker “SYA” on the New York Stock Exchange. It has an impressive lineup of joint book running managers: BofA Merrill Lynch, JPMorgan, Goldman Sachs and Barclays Capital.
We noted that Berkshire Hathaway is a shareholder, and that stake is listed as 26.3%. But other shareholders include White Mountains Insurance Group, Ltd. (NYSE: WTM) also listed with a 26.3% stake. Franklin Mutual Advisers, LLC, a unit of Franklin Resources, Inc. (NYSE: BEN) is listed as a 11.7% stakeholder. Even Och-Ziff Capital Management Group LLC (NYSE: OZM) is listed as a 6.6% stakeholder via its OZ Master Fund, Ltd. Other stakeholders include Vestar Capital Partners, Highfields Capital Management, and Caxton Associates.
Based on how Symetra’s stakeholders are listed and per the filing, this is effectively controlled by Symetra is controlled by Berkshire’s General Re and White Mountains. This time the company and holders will sell shares, although again terms are not disclosed.
Symetra’s revenues fell by almost 9% in 2008 from 2007 to $1.45 billion, with about 60% coming from group and individual insurance lines. Most of the drop was attributed to investment losses.
Posted: October 6, 2009 at 11:56 am
After the close on Monday came a little-known IPO filing from a life insurance operation called Symetra Financial Corp. It turns out that the Bellevue, Washington-based insurer has no terms for the sale but listed a sale of up to $575 million in the initial public offering filing. This is not the first attempt to come public, but it turns out that Warren Buffett’s Berkshire Hathaway Inc. (NYSE: BRK-A) and White Mountains Insurance Group, Ltd. (NYSE: WTM) effectively control the company.
This one filed for an IPO of up to $750 million back in 2007, but the insurer pulled the plug on the IPO in 2008. You can guess the reason listed… ‘unfavorable market conditions.’
Symetra palns to trade under the stock ticker “SYA” on the New York Stock Exchange. It has an impressive lineup of joint book running managers: BofA Merrill Lynch, JPMorgan, Goldman Sachs and Barclays Capital.
We noted that Berkshire Hathaway is a shareholder, and that stake is listed as 26.3%. But other shareholders include White Mountains Insurance Group, Ltd. (NYSE: WTM) also listed with a 26.3% stake. Franklin Mutual Advisers, LLC, a unit of Franklin Resources, Inc. (NYSE: BEN) is listed as a 11.7% stakeholder. Even Och-Ziff Capital Management Group LLC (NYSE: OZM) is listed as a 6.6% stakeholder via its OZ Master Fund, Ltd. Other stakeholders include Vestar Capital Partners, Highfields Capital Management, and Caxton Associates.
Based on how Symetra’s stakeholders are listed and per the filing, this is effectively controlled by Symetra is controlled by Berkshire’s General Re and White Mountains. This time the company and holders will sell shares, although again terms are not disclosed.
Symetra’s revenues fell by almost 9% in 2008 from 2007 to $1.45 billion, with about 60% coming from group and individual insurance lines. Most of the drop was attributed to investment losses.
THE GLOBE AND MAIL: Graham's strategy still stands tall
From Wednesday's Globe and Mail Last updated on Wednesday, Oct. 07, 2009 03:10AM EDT
Validea.com
In the sports world, some of the most intriguing debates involve comparisons that cross generations. How many goals could Bobby Hull score in today's NHL? How about Maurice Richard? Could Babe Ruth hit 60 home runs?
In investing, you can ask similar questions - and get much more definitive answers.
Take Benjamin Graham. Born in 1894, Mr. Graham is considered the father of both value investing and the field of security analysis. He's also known as Warren Buffett's mentor. He earned his reputation by producing annual returns of about 20 per cent from the mid-1930s through the mid-1950s, far exceeding the 12.2-per-cent annual returns of the broader market.
We'll never know for sure how well Mr. Graham would have performed in today's market - but we can get a pretty good idea. That's because in his classic book The Intelligent Investor, Mr. Graham laid out a step-by-step, quantitative stock-picking method for the "defensive investor" - a method I've replicated in my Graham-inspired "Guru Strategy" computer model.
Based on the performance of that strategy, has Mr. Graham's approach been passed by? Hardly. In fact, the 10-stock Graham-inspired portfolio I track has been my best long-term performer, more than doubling in value since its July, 2003, inception.
Even amid the huge market shakeup of the past two years, the Graham portfolio has continued its strong performance. It lost less than the broader market last year, and quickly made up all of its 2008 losses.
Mind the Business
How can a 60-year-old strategy fare so well today? It's because Mr. Graham's strategy wasn't gimmicky, or designed to capitalize on specific market conditions.
Mr. Graham knew that over the long term, stocks tend to move up or down based on how their underlying businesses perform. So, he scoured balance sheets and income statements to find strong, steady companies that were likely to thrive over the long haul.
The same criteria he used to find solid businesses 60 years ago are thus still finding solid businesses for my Graham-based portfolio today. Among those criteria:
Current Ratio: This compares current assets (a company's most liquid assets) to current liabilities (those closest to maturity) to gauge liquidity. The Graham approach wants this to be at least 2.0.
Long-Term Debt v. Net Current Assets: Net current assets (current assets minus current liabilities) should be equal to or greater than long-term debt.
Earnings-Per-Share Growth: He wanted steady growth, at least 30 per cent total over the past decade, with no negative annual EPS over the past five years.
The Margin of Safety
Having lived through his own family's financial woes and the Great Depression, Mr. Graham thought minimizing losses was every bit as important as realizing gains. Because of that, he looked for stocks with a "margin of safety," whose prices were already so low relative to real values of their businesses that even if they struggled, the stock didn't have far to fall.
There were two ways Mr. Graham targeted such stocks: the price/earnings and price/book ratios. He measured the P/E two ways - using the past year's earnings and using the average of the past three years. He wanted both figures to be below 15.
As for the price/book ratio, Mr. Graham's defensive approach used a slightly unusual criterion: The product of the P/E ratio and the P/B ratio should be no greater than about 22.
Last year, in one of the worst market environments ever, my Graham-based model did indeed provide a margin of safety. Its tough debt requirements excluded nearly all financial firms, which were hit hard.
This year, my Graham portfolio is well ahead of the S&P 500. What is it high on right now? Here are three U.S. firms with a presence in Canada:
Smith International Inc.: Based in Houston, this oil field services firm has about 1,000 rigs in the U.S. and almost 200 in Canada. My Graham-based model likes the $2.9-billion in net current assets versus $2.1-billion in long-term debt, and 11.88 P/E ratio.
Snap-On Inc.: This Kenosha, Wis.-based company makes tools and diagnostic equipment. Two of its manufacturing and distribution centres are in Canada. My Graham-based approach likes the firm's solid 2.33 current ratio, manageable long-term debt and 11.6 P/E ratio.
Cabela's Inc.: Cabela's is the world's largest direct marketer, and a leading retailer of outdoor merchandise. The Sidney, Neb.-based firm has about 30 retail locations, most in the northern U.S. and one in Winnipeg. The Graham model likes its manageable long-term debt and low 0.97 P/B ratio.
These three stocks get a perfect 100-per-cent score from my Graham-based model. Two Canadian-based stocks also rate highly, with Toronto-based Harry Winston Diamond and Calgary-based oil services firm Precision Drilling Trust earning scores of 86 per cent.
From Wednesday's Globe and Mail Last updated on Wednesday, Oct. 07, 2009 03:10AM EDT
Validea.com
In the sports world, some of the most intriguing debates involve comparisons that cross generations. How many goals could Bobby Hull score in today's NHL? How about Maurice Richard? Could Babe Ruth hit 60 home runs?
In investing, you can ask similar questions - and get much more definitive answers.
Take Benjamin Graham. Born in 1894, Mr. Graham is considered the father of both value investing and the field of security analysis. He's also known as Warren Buffett's mentor. He earned his reputation by producing annual returns of about 20 per cent from the mid-1930s through the mid-1950s, far exceeding the 12.2-per-cent annual returns of the broader market.
We'll never know for sure how well Mr. Graham would have performed in today's market - but we can get a pretty good idea. That's because in his classic book The Intelligent Investor, Mr. Graham laid out a step-by-step, quantitative stock-picking method for the "defensive investor" - a method I've replicated in my Graham-inspired "Guru Strategy" computer model.
Based on the performance of that strategy, has Mr. Graham's approach been passed by? Hardly. In fact, the 10-stock Graham-inspired portfolio I track has been my best long-term performer, more than doubling in value since its July, 2003, inception.
Even amid the huge market shakeup of the past two years, the Graham portfolio has continued its strong performance. It lost less than the broader market last year, and quickly made up all of its 2008 losses.
Mind the Business
How can a 60-year-old strategy fare so well today? It's because Mr. Graham's strategy wasn't gimmicky, or designed to capitalize on specific market conditions.
Mr. Graham knew that over the long term, stocks tend to move up or down based on how their underlying businesses perform. So, he scoured balance sheets and income statements to find strong, steady companies that were likely to thrive over the long haul.
The same criteria he used to find solid businesses 60 years ago are thus still finding solid businesses for my Graham-based portfolio today. Among those criteria:
Current Ratio: This compares current assets (a company's most liquid assets) to current liabilities (those closest to maturity) to gauge liquidity. The Graham approach wants this to be at least 2.0.
Long-Term Debt v. Net Current Assets: Net current assets (current assets minus current liabilities) should be equal to or greater than long-term debt.
Earnings-Per-Share Growth: He wanted steady growth, at least 30 per cent total over the past decade, with no negative annual EPS over the past five years.
The Margin of Safety
Having lived through his own family's financial woes and the Great Depression, Mr. Graham thought minimizing losses was every bit as important as realizing gains. Because of that, he looked for stocks with a "margin of safety," whose prices were already so low relative to real values of their businesses that even if they struggled, the stock didn't have far to fall.
There were two ways Mr. Graham targeted such stocks: the price/earnings and price/book ratios. He measured the P/E two ways - using the past year's earnings and using the average of the past three years. He wanted both figures to be below 15.
As for the price/book ratio, Mr. Graham's defensive approach used a slightly unusual criterion: The product of the P/E ratio and the P/B ratio should be no greater than about 22.
Last year, in one of the worst market environments ever, my Graham-based model did indeed provide a margin of safety. Its tough debt requirements excluded nearly all financial firms, which were hit hard.
This year, my Graham portfolio is well ahead of the S&P 500. What is it high on right now? Here are three U.S. firms with a presence in Canada:
Smith International Inc.: Based in Houston, this oil field services firm has about 1,000 rigs in the U.S. and almost 200 in Canada. My Graham-based model likes the $2.9-billion in net current assets versus $2.1-billion in long-term debt, and 11.88 P/E ratio.
Snap-On Inc.: This Kenosha, Wis.-based company makes tools and diagnostic equipment. Two of its manufacturing and distribution centres are in Canada. My Graham-based approach likes the firm's solid 2.33 current ratio, manageable long-term debt and 11.6 P/E ratio.
Cabela's Inc.: Cabela's is the world's largest direct marketer, and a leading retailer of outdoor merchandise. The Sidney, Neb.-based firm has about 30 retail locations, most in the northern U.S. and one in Winnipeg. The Graham model likes its manageable long-term debt and low 0.97 P/B ratio.
These three stocks get a perfect 100-per-cent score from my Graham-based model. Two Canadian-based stocks also rate highly, with Toronto-based Harry Winston Diamond and Calgary-based oil services firm Precision Drilling Trust earning scores of 86 per cent.
Increasing Your Financial Intelligence Series: Rules of Warren Buffett
By Issa, October 4th, 2009
Finding Kindred Minds
I could never get enough of Warren Buffett. I follow him on Twitter (and follow everyone he follows), his name would be the red flag that would make me read financial reports and updates (and countless finance websites I subscribe to that send me maybe 20 emails a day), and I even tried to join his 10,000 Women.
I cannot help it. He was there at my first foray into the world of money and investment through a book given to me by a mentor: The Tao of Warren Buffett, by Mary Buffett and David Clark. That introduction so inspired me that I have dedicated my life to learning all I can about this enigmatic thing, wealth, which has the power to change lives – not only the money earner’s but everyone’s. Buffett, the philanthropist, showed that it can be done (and should be done). I moved on to learn the principles of Kiyosaki, Orman, Coelho, Bo Sanchez, Ramit, Tim Ferris, Dan Kennedy and countless others.
But I always go back to Buffett and his principles. Here are three and some life’s lessons.
Rule No. 1: Never lose money. Rule No. 2: Never forget Rule No. 1
I failed at Rule No. 1.
I just came home from the States and was making my rounds visiting friends. This particular friend was a favorite and something about her caught my eye. She was wearing a curious bag, brown and locally made and it had dangling from it, very interesting big stones. But they were not stones. They were “charms”. I was to find out later that they came in bracelets too and that they brought people “luck”. Luck! I was intrigued. I just came from a Western nation where there was no place for charms or luck and having seen these colorful, enchanting reminders of the way of life I left behind, I was at once captivated. I had an inspiration to go into business selling charm bracelets! I put in an order for so many bracelets that cost me USD$600 and I took it upon my head that I could sell them in the country that I just left.
Of course it did not work.
It was interesting that my friend’s friend (the owner) appeared not too enthusiastic to sell to me. I was intrigued by this but did not think much of it at that time. On hindsight, I should have. She was a feng shui master and she probably looked into my present and saw that it was not an auspicious time for me to be selling charm bracelets.
And so I lost the $600, which to me, then, was a lot of money (okay, okay, it is still a lot of money today).
But some important lessons were learned. One, do not go into a business that you do not understand (selling). Two, do not leave the selling to other people and think you can just sit there, oceans away, and make lots and lots of money. Sometimes it works, most of the time it does not. Three, do your due diligence. Find out about the business, does it sell, can you get the goods for less (I did not really haggle that time), how long before you make the first installment, can you get a discount for bulk, are there existing flyers to help you promote the business, how many months before you get the ROI (return on investment), what is the possibility that it would fail and is it surmountable? Four, have a marketing plan – launch the product, join trade fairs, do vigorous email marketing, provide incentives or discounts, testimonials, product review – that would span months, or years.
I still get excited at business prospects more than I should have, sometimes. But I am more cautious too, thanks to Rule No. 1.
Rule No. 2: I made my first investment at age eleven. I was wasting my life up until then.
I made my first investment when I married my investment who was a diamond-in-the-rough who has got so much potential and every day is a wonder seeing that potential come true.
I am kidding. And not. I think marriage is an investment of sorts. Your financial future depends upon whom you marry, not the person he or she is at present (because that might not be much) but his potential, because more than the net present value, it is that potential that makes it possible for the future to give its limitless rewards. Love could enable a person to see into the future (it has a reputation for blindness too, but maybe that is an afterthought invented by people who did not work at it), and belief can help the “potential” come to life.
I remember my father-in-law saying that he does not want a rich man for his daughter. He wants someone with a mind of a businessman (like him), because only a businessman can give his daughter the life of ease and happiness – limitless – that he wants for her. She got him.
And I got mine.
But like all investments, marriages (and people) should be nurtured so the material and the non-material rewards (which are more important) would come.
The investment has paid off and hubby’s genius has made it possible for me to start investing (business, stocks, mutual funds). Yes, it did not happen at age 11, but I do not think I have wasted my life until then. I was nurturing a diamond.
Rule No. 3: You can’t make a good deal with a bad person.
There is a problem – how to tell if a person is good or bad. It is not always easy. Some people have tongues of honey and can talk you into anything. I particularly remember one. He played the piano like Rachmaninoff, office was set up in one of the most expensive parts of town and he was even a geomancer with an impressive reputation (we did not check). We were surprised and flattered that he wanted to go into business with us. But before we put in the money, there was a news explosion – he was actually a con artist who scammed people in Asia and in the United States.
It was a close call.
When dealing with persons (whether referred to you or not) and you will do business with that person (the amount of money does not matter), extensive research should be done (Google may help), questions should be asked, plans should be carefully analyzed, contracts drawn up. If all else fails, trust the gut.
And have fun learning from life.
Warren buffett books
Warren Buffett was born in 1930 in Omaha, Nebraska, USA and has become probably the world’s most successful investor. He is the son of a stockbroker and Congressman, and of course everyone wants to learn about his trading secrets.
I don’t think that Warren Buffett has actually written a book about his investment principals himself, in that sense there is no Warren Buffett book, but he has from time to time given hints in his annual letters to share holders of Berkshire Hathaway, and in other short notes and reports to the media.
However there have been a lot of books written about Warren Buffett by others who have tried to put together the story and ideas behind the man and his fortune.
In fact if you go to Amazon and do a search for “Warren Buffett” will find 2,576 books being listed, compare that to “Bill Gates”, who for a long time was also considered to be the riches man in the world, and you only find 11 listings, that should give you some idea about the public obsession with the man.
I have only read one of his books called “The Warren Buffett Way”, it was hard work and somewhat of a boring read. Much of the content of all these books on Warren Buffett seems to be the same basic information about value investing and being patient with your investments. I don’t think there is much to be gained by reading more than one of them.
Here is a small selection of some of the better known ones:
The Warren Buffett Way, Second Edition by Robert G. Hagstrom, Ken Fisher and Bill
The Snowball – Warren Buffett and The Business of Life
The essential Buffett library
Investing – the Last Liberal Art – by Robert Hagstrom
Buffett: by Roger Lowenstein
The New Buffettology, by Mary Buffet and David Clark
The Interpretation of Financial Statements, by Benjamin Graham
Value Investing: by Janet Lowe
Robert Hagstrom, The Warren Buffett Way
Buffettology by Mary Buffett and David Clark
Janet Lowe, Warren Buffett Speaks – Wit and Wisdom from the Word’s Greatest Investor
John Train, The Midas Touch: The Strategies That Have Made Warren Buffett ‘America’s Preeminent Investor’.
Andrew Kilpatrick, Of Permanent Value, The Story of Warren Buffett
Warren Buffett, Lawrence Cunningham (editor), The Essays of Warren Buffett
Ms Janet M. Tavakoli, Dear Mr. Buffett: What An Investor Learns 1,269 Miles From Wall Street
Many of these Buffet books are quite large, with many pages that would take a long time to read, and even longer to understand and make any sense of. A better way of understanding Buffett maybe to find investment articles which have summarised the Buffett principals into short concise lessons that can be quickly learnt and applied.
One point of caution however, and this is not investment advice, Buffett has made most of his fortune during the years of the great USA bull markets, times have changed and it is possible these principals are no longer as effective as they used to be.
I don’t think that Warren Buffett has actually written a book about his investment principals himself, in that sense there is no Warren Buffett book, but he has from time to time given hints in his annual letters to share holders of Berkshire Hathaway, and in other short notes and reports to the media.
However there have been a lot of books written about Warren Buffett by others who have tried to put together the story and ideas behind the man and his fortune.
In fact if you go to Amazon and do a search for “Warren Buffett” will find 2,576 books being listed, compare that to “Bill Gates”, who for a long time was also considered to be the riches man in the world, and you only find 11 listings, that should give you some idea about the public obsession with the man.
I have only read one of his books called “The Warren Buffett Way”, it was hard work and somewhat of a boring read. Much of the content of all these books on Warren Buffett seems to be the same basic information about value investing and being patient with your investments. I don’t think there is much to be gained by reading more than one of them.
Here is a small selection of some of the better known ones:
The Warren Buffett Way, Second Edition by Robert G. Hagstrom, Ken Fisher and Bill
The Snowball – Warren Buffett and The Business of Life
The essential Buffett library
Investing – the Last Liberal Art – by Robert Hagstrom
Buffett: by Roger Lowenstein
The New Buffettology, by Mary Buffet and David Clark
The Interpretation of Financial Statements, by Benjamin Graham
Value Investing: by Janet Lowe
Robert Hagstrom, The Warren Buffett Way
Buffettology by Mary Buffett and David Clark
Janet Lowe, Warren Buffett Speaks – Wit and Wisdom from the Word’s Greatest Investor
John Train, The Midas Touch: The Strategies That Have Made Warren Buffett ‘America’s Preeminent Investor’.
Andrew Kilpatrick, Of Permanent Value, The Story of Warren Buffett
Warren Buffett, Lawrence Cunningham (editor), The Essays of Warren Buffett
Ms Janet M. Tavakoli, Dear Mr. Buffett: What An Investor Learns 1,269 Miles From Wall Street
Many of these Buffet books are quite large, with many pages that would take a long time to read, and even longer to understand and make any sense of. A better way of understanding Buffett maybe to find investment articles which have summarised the Buffett principals into short concise lessons that can be quickly learnt and applied.
One point of caution however, and this is not investment advice, Buffett has made most of his fortune during the years of the great USA bull markets, times have changed and it is possible these principals are no longer as effective as they used to be.
вторник, 6 октомври 2009 г.
Бъфет изстреля китайски бизнесмен на челна позиция по богатство в страната
29.09.2009 23:13
Уан Чуанфу – основател на компанията BYD, в която групата на Уорън Бъфет Berkshire Hathaway държи 10 на сто, се изкачи със 102 места до челната позиция в годишната класация на най-богатите хора в Китай, предаде ВВС.
Богатството на Уан е нараснало от 880 млн. долара до 5,1 млрд. долара, след като подразделение на Berkshire Hathaway закупи дела от 10% в BYD за 230 млн. долара.
Акциите на компанията, от която Уан притежава 27,8%, са скочили с 387% тази година.
BYD стартира дейността си с производство на батерии за мобилни телефони, но доби популярност с хибридните си автомобили. Компанията е създадена през 1995 г., а започва производство на електрически коли през 2003 г.
На второ място в класацията се нарежда Джан Ин, създала компанията за рециклиране и пакетиране Nine Dragons Paper. Нейното богатство се оценява на 4,9 млрд. долара.
Според класацията броят на милиардерите в Китай се е увеличил до 130 от 101 миналата година.
29.09.2009 23:13
Уан Чуанфу – основател на компанията BYD, в която групата на Уорън Бъфет Berkshire Hathaway държи 10 на сто, се изкачи със 102 места до челната позиция в годишната класация на най-богатите хора в Китай, предаде ВВС.
Богатството на Уан е нараснало от 880 млн. долара до 5,1 млрд. долара, след като подразделение на Berkshire Hathaway закупи дела от 10% в BYD за 230 млн. долара.
Акциите на компанията, от която Уан притежава 27,8%, са скочили с 387% тази година.
BYD стартира дейността си с производство на батерии за мобилни телефони, но доби популярност с хибридните си автомобили. Компанията е създадена през 1995 г., а започва производство на електрически коли през 2003 г.
На второ място в класацията се нарежда Джан Ин, създала компанията за рециклиране и пакетиране Nine Dragons Paper. Нейното богатство се оценява на 4,9 млрд. долара.
Според класацията броят на милиардерите в Китай се е увеличил до 130 от 101 миналата година.
Коя е най-успешната покупка на Бъфет?
06.10.2009 16:02
Покупката на компанията СТВ, произвеждаща оборудване за ферми за отглеждане на селскостопански животни, е „най-големият успех“ за фонда Berkshire Hathaway. Това е заявил собственикът на фонда Уорън Бъфет във видеообръщение към служителите на фирмата.
По думите му Berkshire Hathaway никога няма да продаде този актив, съобщава Bloomberg.
Фондът на Бъфет купува СТВ през 2002 г. за 177 млн. долара. Оттогава, коментира Бъфет, „оперативните резултати от дейността на фирмата и проведените от нея поглъщания“ са надминали неговите очаквания. По-конкретно, през последните 7 години, СТВ е осъществила ред поглъщания в Израел, Германия и Холандия, в т.ч. фирмите Swine Services Specialists и Porcorn.
Бъфет си припомнил, че отначало се отказал от покупката на СТВ, но скоро след това променил решението си. Това станало, след като в централата на Berkshire Hathaway дошъл за делова среща генералният директор на СТВ Виктор Манчинели. „Той е точният човек, а СТВ е точната компания“, допълва Бъфет.
Уорън Бъфет е известен като инвеститор, който се придържа към простия принцип – да купува това, което самият той би ползвал. Сега активите на Berkshire Hathaway възлизат на около 150 млрд. долара. Фондът притежава дялове в Coca-Cola, American Express, Washington Post, Gillette, Walt Disney и др.
06.10.2009 16:02
Покупката на компанията СТВ, произвеждаща оборудване за ферми за отглеждане на селскостопански животни, е „най-големият успех“ за фонда Berkshire Hathaway. Това е заявил собственикът на фонда Уорън Бъфет във видеообръщение към служителите на фирмата.
По думите му Berkshire Hathaway никога няма да продаде този актив, съобщава Bloomberg.
Фондът на Бъфет купува СТВ през 2002 г. за 177 млн. долара. Оттогава, коментира Бъфет, „оперативните резултати от дейността на фирмата и проведените от нея поглъщания“ са надминали неговите очаквания. По-конкретно, през последните 7 години, СТВ е осъществила ред поглъщания в Израел, Германия и Холандия, в т.ч. фирмите Swine Services Specialists и Porcorn.
Бъфет си припомнил, че отначало се отказал от покупката на СТВ, но скоро след това променил решението си. Това станало, след като в централата на Berkshire Hathaway дошъл за делова среща генералният директор на СТВ Виктор Манчинели. „Той е точният човек, а СТВ е точната компания“, допълва Бъфет.
Уорън Бъфет е известен като инвеститор, който се придържа към простия принцип – да купува това, което самият той би ползвал. Сега активите на Berkshire Hathaway възлизат на около 150 млрд. долара. Фондът притежава дялове в Coca-Cola, American Express, Washington Post, Gillette, Walt Disney и др.
Абонамент за:
Публикации (Atom)