Wit. Wisdom. Value Investing.
This is a Warren Buffett birthday post, and like all birthday wishes, I will not take long. This message will never reach Mr. Buffett, but I silently hope the thoughts form some kind of waves and time-travel to reach him before he celebrates his 100th birthday.
Happy birthday to you.
Trust you are doing well, feeling young at 91, and in the pink of your health.
Announcement: Admission to the 11th batch of my premium, online course in Value Investing – Mastermind – is now open, and will remain so till 25th March. Click here to pay your price and join now.
Warren Buffett recently released his 2019 letter to shareholders of Berkshire Hathaway.
I have prepared some notes on the letter. Click here to download my notes.
Warren Buffett recently released his 2018 letter to shareholders of Berkshire Hathaway.
I have prepared some notes on the letter. Click here to download my notes.
Also, I was on ET Now yesterday to share my thoughts on the letter. Here is the video of the chat (click here to watch the video, or watch below) –
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 –
[Read more…] about 7 Secrets of Warren Buffett’s Success (as per Charlie Munger)
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.
“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.
[Read more…] about The Most Powerful Mental Model for Identifying Stocks
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…
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.
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.
IBM and Coke represent two of Berkshire Hathaway’s three biggest investments (the biggest being Wells Fargo).
However, disappointing earnings announcements at these companies cost Warren Buffett around US$ 2.5 billion in the week gone by.
These losses add to a recent rough patch for Buffett, who slashed Berkshire Hathaway’s stake in British retailer Tesco recently. He has described buying into the stock as a “huge mistake” after the company announced another earnings disappointment and, over that, a £ 250 m accounting scandal.
Few seats remain at my Value Investing Workshop in Bangalore on 1st Nov. (Saturday). To join, please register here – https://t.co/VoXkYaHm9q
— Vishal Khandelwal (@safalniveshak) October 27, 2014
The media is rife with these big “mistakes”, especially Tesco, and is surprised how the world’s best investor could commit them. But then, Tesco isn’t Buffett first mistake and it won’t be his last mistake either.
[Read more…] about One Big Lesson I Learned Seeing Warren Buffett Make Mistakes
Warren Buffett wrote this in his 1989 letter to shareholders…
Stick to proven management with a lot of integrity, talent and passion. After some other mistakes, I learned to go into business only with people whom I like, trust, and admire.
Sadly, 25 years after Buffett first said this and after his countless repetitions of this thought, investors continue to deal with managements that lack integrity, and have talent and passion not in conducting their business affairs honestly but in looting other stakeholders.
The latest case is that of India’s leading (if size matters here) real estate company, DLF, which has sent its customers and investors into a tizzy. This is after the stock market regulator SEBI barred it from raising money from the capital market for three years.
So, home buyers who have invested in DLF projects are worried because they fear the projects that have already been delayed may be pushed back further or even get stalled due to lack of funds with the company.
As for investors (or let me say speculators, who were playing with fire), they have already lost a bucket-load of money in the company’s stock. The stock is down 55% in just the past four months, and 90% down from its post-IPO highs in January 2008.