Warren Buffett Letters

7 Secrets of Warren Buffett’s Success (as per Charlie Munger)

April 17, 2018 | 3 Comments

In the 2008 shareholder meeting of Wesco Financial, a shareholder asked Charlie Munger to describe what caused Warren Buffett’s success.

“His success…is a lollapalooza,” Munger replied – a confluence of factors moving in the same direction.

Munger outlined the following seven key factors which combined together to cause Buffett’s success –

Mental aptitude (Being seriously smart)
Having great interest in the subject (“It’s very hard to succeed in something unless you take the first step – which is to become very interested in it.” ~ Sir William Osler)
Early start (If something takes a long time to achieve, you better start early)
Being a learning machine (Keep learning and learning)
Reinforcement (Human beings work well if they get reinforcement – constant rewards for doing well, which drives you to do more of the same)
Being correctly trusted by people
Avoiding envy, jealousy, self-pity, vengeance, and extreme ideology

My Notes on Warren Buffett’s 2017 Letter to Shareholders

March 1, 2018 | 6 Comments

Warren Buffett recently released his 2017 letter to shareholders of Berkshire Hathaway. As outlined on the first page of the letter, Berkshire’s share price has increased by, hold your breath, 2,404,748% over the last 53 years.

The big idea worth noting here is that the annualized return Berkshire’s stock has earned for its shareholders to achieve such magnificent result over 53 years is less than 21% – something people basking in the limelight of current bull run would discard as too less!

Anyways, I have prepared some notes on Buffett’s 2017 letter. Click on the image below or click here to download the document.

Notes on Warren Buffett's 2017 Letter to Shareholders - Safalniveshak.com

I suggest you read the original letter in its entirety by downloading it from here.

The Most Powerful Mental Model for Identifying Stocks

February 13, 2017 | 11 Comments

For starters, we had our Value Investing Workshop in Chennai yesterday, and here are some moments from the same…

Safal Niveshak's Value Investing Workshop in Chennai - Feb. 2017

The next workshops are in Mumbai (19th Feb), Delhi (25th Feb), and Hyderabad (5th March). In case you wish to join any of these, please click here to register.

Anyways, let’s start with today’s post.

“It’s a funny thing about life; if you refuse to accept anything but the best, you very often get it.” ~ W. Somerset Maugham – English dramatist & novelist (1874-1965)

As I’ve seen in the past 14+ years of investing in the stock market, Maugham’s thought holds a great relevance when it comes to picking up businesses for investment.

Pick up a business with good economics and with good margin of safety, and the probability of making money in the long run is high. Pick up a business with poor economics with any margin of safety, and the probability of losing your shirt, and entire wardrobe, in the long run is very high.

Understanding a business also adds significantly to your margin of safety, which is a great tool to protect yourself against losing a lot of money.

Teach Your Kids About Money – Join Warren Buffett’s Secret Millionaires Club

January 6, 2016 | 19 Comments

Warren Buffett's Secret Millionaire’s Club I’m good friends with Warren Buffett,
He’s gonna teach me how to do my best, learn to invest
And have a lot of fun doin’ it…

Well, that’s how the jingle begins for the cartoon series called “Secret Millionaires Club” (SMC) where Warren Buffett (in his own voice) teaches kids the basic of good financial decision making and some of the basic lessons of starting a business.

While my 11-year old daughter loves the lessons Buffett teaches, my 4-year old son loves the jingle itself, and thus I have to often watch some videos from the series alongwith them. 🙂

“It’s not intended to teach kids how to read a balance sheet,” Buffett says about SMC. “It’s meant to provide a fun way for kids to understand business and develop good habits from an early age.”

SMC has lots of good lessons about money such as learning not to spend more than you have, and saving for the unexpected, and not borrowing money unless you have a plan to pay it back. The series shows the consequences that can happen if people don’t make wise decisions.

Some of the other lessons kids (and adults) can learn from this series include…

The best investment you can make is an investment in yourself.
The more you learn, the more you’ll earn.
Find something you enjoy doing and you’ll never work a day in your life.
Treat other people the way you would like to be treated.
Never trade your reputation for anything.

Then, there’s the most important lesson Buffett doles out on making mistakes – “Learn from your mistakes. Better yet, learn from the mistakes of others.”

And finally, on failure – “Failing is not falling down…it’s staying down.”

You can watch all 26 episodes of the series here.

I find SMC a fun-filled and effective way to pass on critical lessons on money and business to my child. I am sure you will not find it any different.

18 Lessons for Investors and Managers from Warren Buffett’s 2014 Letter to Shareholders

March 31, 2015 | 1 Comment

One of my favourite Warren Buffett letters is from 2014. The reason I find this letter so special isn’t just because it marked the completion of 50 years of Buffett being at helm at Berkshire, but also because it contained a bonus – Charlie Munger’s words of wisdom and vision for Berkshire over the next 50 years.

What follows below are 18 big lessons Buffett and Munger have outlined in the 2014 letter, which are relevant for both investors and corporate managers. Though I suggest you read the original letter in its entirety by downloading it from here.