Tips to Succeed in Stock Market
Monitor
Tips to Succeed in Stock Market
Legendary Investor Warren Buffett once advised, "Be greedy when others
are fearful."
Buy when you cannot find a Bull. Thanks to a fear-filled summer, many
top notch stocks are still trading well below their potential, giving
savvy investors the opportunity to strike it rich.
Time to Get Greedy?
Graham taught Buffett to ignore the markets and focus upon buying the
underlying worth of the stock. Buying stocks below their book value
and having a margin of safety were key Graham investing themes. Graham
taught Buffett to look beyond the current stock price to the
"intrinsic value" of the stock. And, then, to only buy the stock if it
could be purchased at a steep discount to its intrinsic value, giving
a large margin of safety
Buffett's partnership portfolio over ten years grew by a modest 1,156%
compared to the Dow's 122.9% and other major world indices.
The Start of a Bull Market ?
The bottom of the market starts at a time when the stock market is
weak and the general population is pessimistic. At this point most
investors sell after having endured a long and torturous bear market.
This extreme pessimism found at a bottom is always irrational and
undeserved. Now the market is undervalued and is a bargain. Savvy
investors, the “smart money”, buy bargain stocks knowing that they
will be able to sell them higher in the near future. Smart money
buying, called accumulation, causes stocks to rise. The smart money
often consists of NYSE specialists, Nasdaq Market Makers, hedge fund
traders and corporate insiders. These traders have access to
information that the general public does not.
Rising stocks eventually gain the respect of mutual funds, as Billions
of dollars of capital is introduced into the market place. Mutual fund
investment causes the stock market to advance in a powerful manner.
Much of the steady large trends are powered by mutual funds and other
institutional investors.
Stock Market: Buy or Not?
When you go to the store and see a pair of designer slacks that you've
had your eye on for some time on sale, do you buy them? Or, do you
fret, thinking that if you wait they might be even more discounted? Of
course, in the latter scenario you stand the risk of someone else
buying them first and they aren't available at all.
Such is the state of the current stock market. If you buy now, the
market could go down further and you'll be sorry. If you wait, the
market could go up, and you'll still be sorry because you didn't buy
earlier. Dissatisfaction with your decision can plaque you either
way... That is just plain disconcerting.
Will you become the next Warren Buffett? Yes or No. But, I'll leave
you with this: "History repeats itself", and we can learn a great deal
from history. And, hopefully, not repeat the mistakes of others.
Maybe, even, in some limited way, we can repeat some of the successes
others before us have achieved, if we understand their methodology at
the time and absorb some of the lessons they have learned in the past.
--------------------------------------
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HW "Skip" Weldon
wrote:
>Legendary Investor Warren Buffett once advised, "Be greedy when others
>are fearful." Graham taught Buffett to ignore the markets and focus upon buying the
>underlying worth of the stock. Buying stocks below their book value
>and having a margin of safety were key Graham investing themes.
One thing that has always puzzled me: If Buffett's methodology works
so well, how come there's only one Buffett?
-HW "Skip" Weldon
Columbia, SC
Elle
> Savvy
> investors, the “smart money”, buy bargain stocks knowing
> that they
> will be able to sell them higher in the near future. Smart
> money
> buying, called accumulation, causes stocks to rise. The
> smart money
> often consists of NYSE specialists, Nasdaq Market Makers,
> hedge fund
> traders and corporate insiders.
This article suggests these lots are all Warren Buffetts.
Yet from my reading, on average the above are as vulnerable
to practicing numerology, timing, and momentum trading as
the typical stay-at-home, get-rich-quick (not) day trader.
Buffett invests for the long term. Not so with all these
other lots. So many other differences...
Don
<skip5700r...@hotmail.com> said:
> One thing that has always puzzled me: If Buffett's methodology works
> so well, how come there's only one Buffett?
There are probably thousands of investors with just as much knowledge,
perseverence, intelligence, ability to research companies, etc. as
Buffett. Well, maybe hundreds. The fact that Buffett, rather than one
of the other equally qualified people had such enormous success was
largely a matter of chance, luck. Once unusual monetary returns came
his way as a matter of chance, conditions arose that tended to increase
the likelihood of further out-of-the-ordinary success on his part.
In the same way, there are thousands of talented actors alll across the
land who have what it takes to make it in the movies. But only a
handfull become Hollywood superstars.
None of this implies that there is anything wrong with Buffett's
methodology. It is probably better than most.
A financial ad that says "We will show you how to invest like Buffett"
has about the same credibility as an ad in the Yellow Pages that says
"Sign up at our studio and we will show you how to become the next
supermodel."
Gil Faver
"Monitor" <allpaid...@gmail.com> wrote in message
news:3e1805f4-d632-4701...@w5g2000prd.googlegroups.com...
>
>
> Tips to Succeed in Stock Market
>
>
> Legendary Investor Warren Buffett once advised, "Be greedy when others
> are fearful."
> Buy when you cannot find a Bull. Thanks to a fear-filled summer, many
> top notch stocks are still trading well below their potential, giving
> savvy investors the opportunity to strike it rich.
>
>
>
> Time to Get Greedy?
>
> Graham taught Buffett to ignore the markets and focus upon buying the
> underlying worth of the stock. Buying stocks below their book value
> and having a margin of safety were key Graham investing themes. Graham
> taught Buffett to look beyond the current stock price to the
> "intrinsic value" of the stock. And, then, to only buy the stock if it
> could be purchased at a steep discount to its intrinsic value, giving
> a large margin of safety
>
> Buffett's partnership portfolio over ten years grew by a modest 1,156%
> compared to the Dow's 122.9% and other major world indices.
Let's not forget that Buffet buys "at a steep discount to intrinsic value"
as part of the whole Estate Tax fiasco. No wonder he opines against its
repeal.
Douglas Johnson
>Let's not forget that Buffet buys "at a steep discount to intrinsic value"
>as part of the whole Estate Tax fiasco.
Eh? I miss the connection between buying at a steep discount to intrinsic value
and the "whole Estate Tax fiasco". -- Doug
Will Trice
HW \"Skip\" Weldon wrote:
> One thing that has always puzzled me: If Buffett's methodology works
> so well, how come there's only one Buffett?
An excellent question. Buffett claims that there are many other
successful investors like himself in his appendix to the 2003 revised
edition of _The Intelligent Investor_. He gives details on nine of
these folks. Obviously none of them have risen to his leavel of wealth,
but then someone had to be the best, right? Buffett's outlandish
success may be more about his ability to run a business rather than his
investing success as pointed out by Don.
-Will
william dot trice at ngc dot com
Will Trice
Don wrote:
> There are probably thousands of investors with just as much knowledge,
> perseverence, intelligence, ability to research companies, etc. as
> Buffett. Well, maybe hundreds. The fact that Buffett, rather than one of
> the other equally qualified people had such enormous success was
> largely a matter of chance, luck.
For what it's worth, an article in the 8/7/07 _U.S. News & World
Report_, "Built to Make Billions?", quotes a study that concluded that
Buffett's investment record cannot be due to chance alone.
-Will
william dot trice at ngc dot com
--------------------------------------
Don
> For what it's worth, an article in the 8/7/07 _U.S. News & World
> Report_, "Built to Make Billions?", quotes a study that concluded that
> Buffett's investment record cannot be due to chance alone.
Well, yes, that is probably true. He could not have done it without
talent and knowledge, as well as hard work and study. I would be
inclined to say that what is due to chance is his number one rank in
being way out ahead of many other investors who are equally talented.
In other words, I doubt if Buffett possesses any unique talent, or
magic, or special ability to make accurate predictions about the future
not possessed by many other investors.
HW "Skip" Weldon
<wtr...@notmonitored.com> wrote:
>> One thing that has always puzzled me: If Buffett's methodology works
>> so well, how come there's only one Buffett?
>
> Buffett's outlandish
>success may be more about his ability to run a business rather than his
>investing success as pointed out by Don.
My conclusion as well. But since you and I agree on this issue,
perhaps I should revisit my conclusion. <grin>
-HW "Skip" Weldon
Columbia, SC
--------------------------------------
Will Trice
HW \"Skip\" Weldon wrote:
> My conclusion as well. But since you and I agree on this issue,
> perhaps I should revisit my conclusion. <grin>
Oh, now that's harsh. :)
-Will
william dot trice at ngc dot com
--------------------------------------
BreadW...@fractious.net
> Buffett's partnership portfolio over ten years grew by a modest 1,156%
> compared to the Dow's 122.9% and other major world indices.
Which ten years was this? 1156% in any ten year period sounds
a bit suspicious. Buffett's long-term annualized average
return was approx 21%. In 10 years, that's a still-spectacular
570+% cumulative return, but still, in most periods where
Buffett was doing great, the broader market did pretty well,
too. In the period where Buffett made 21% long-term, the
S&P500 did 10+% annualized, which, over a 10-year period, is
about 160% return (so same investment in BRK vs SP500 in a
10 year period, one expects some 4+x as much money at the
end from BRK - if one expects the future to behave just like
the past. Don't. Buffett doesn't. Read his own notes about
this.)
> undeserved. Now the market is undervalued and is a bargain. Savvy
> investors, the “smart money”, buy bargain stocks knowing that they
> will be able to sell them higher in the near future. Smart money
The market can stay "undervalued" a long time. There's an
old trader's saw that the market can stay irrational longer
than you can stay liquid. (That's a real danger for anyone
who's leveraged up on it).
The market may be undervalued. The question is _when_ will
it cease to be.
Financial planning is not just about staying in the stock
market, but making sure that one can safely ride out the
periods where it's not behaving as one hopes it does in
the longer term.
--
Plain Bread alone for e-mail, thanks. The rest gets trashed.
No HTML in E-Mail! -- http://www.expita.com/nomime.html
Are you posting responses that are easy for others to follow?
http://www.greenend.org.uk/rjk/2000/06/14/quoting
PeterL
<skip5700removet...@hotmail.com> wrote:
> On Sat, 21 Jun 2008 05:53:25 -0500, Monitor <allpaidmoni...@gmail.com>
> wrote:
>
> >Legendary Investor Warren Buffett once advised, "Be greedy when others
> >are fearful." Graham taught Buffett to ignore the markets and focus upon buying the
> >underlying worth of the stock. Buying stocks below their book value
> >and having a margin of safety were key Graham investing themes.
>
> One thing that has always puzzled me: If Buffett's methodology works
> so well, how come there's only one Buffett?
>
> -HW "Skip" Weldon
> Columbia, SC
>
There are plenty of other Buffetts, just that they are not nearly as
famous.
PeterL
>
> Let's not forget that Buffet buys "at a steep discount to intrinsic value"
> as part of the whole Estate Tax fiasco. No wonder he opines against its
> repeal.
>
Can you explain this connection?
dapperdobbs
<skip5700removet...@hotmail.com> wrote:
>
> One thing that has always puzzled me: If Buffett's methodology works
> so well, how come there's only one Buffett?
>
Buffet studied directly under Benjamin Graham, which gave him close
insights - he did the course, with hands on interneship. He started a
fund, and the role of other's money may have had something to do with
it. My belief is that he loves what he does, and works harder at it
than most are willing to. The last is probably the most significant.
There are always people with unusual talent in pretty much any field.
The Bechtels haven't done so badly. A distinguishing feature I like in
Buffett is that as far as I know, he didn't resort to underhanded
business practices, as Rockefeller is reputed to have done.
Buffet did have two disadvantages that don't affect the hundreds or
even thousands of other successful investors. He was subject to
scrutiny, as fund manager. And, small guys don't have to worry about
moving the price of a stock when they buy their full position!:-)
Elle
> Buffett's partnership portfolio over ten years grew by a
> modest 1,156%
> compared to the Dow's 122.9% and other major world
> indices.
>From googling, I see the figures above referred to in the
book _The Making of an American Capitalist_ . I do not like
that it focuses on a mere ten-year period that seems to be
hand-picked. The ten-year period seems to have occurred in
the 1960s, per a quotation here,
http://www.lsgifund.com/lsgireport/LSGILetter.pdf which
states Buffett beat the Dow by 21.8% a year for 13 years.
Numerous sites state that Buffett and his partners scored a
coup c. 1964 when the partnership put 40% of its stock in
the troubled American Express Company (AXP) (after it had
tanked by 50% on "bad news") for $35 a share. By 1967, AXP
had risen to $180. Does this explain much of his success in
the aforementioned 10-year period? If so, uh, foul!
About mid-2007, Buffett bought around $450 million of BAC.
In August, his BH stock portfolio (40 stocks or so) was
worth about $61 billion, so his BAC position was less than
1%. By my reckoning, his BAC stock is now worth about half
as much at $243 million.
I guess with hindsight, how much exposure various banks had
to subprime mortgages was not available to investors. Did
the Oracle of Omaha himself get fooled? It's only been
several months, but, unlike AXP in the 1960s, it's not like
BAC had tanked when Buffett bought it. In fact, BAC was at
or near a historical high. Then the writedowns (surprise!)
began.
I think this focus on ten years in the 1960s exaggerates
Buffett's success. He's good, and I celebrate his approach
in general, but I don't know that he's a wizard whose every
move should be followed. I'd like more figures on his stock
investing performance. (I bear in mind that his company also
buys companies not publicly owned--that are not stocks--that
seem a value. I am not interested in this, since it's not
something this group contemplates for most posters here.)
Will Trice
Elle wrote:
> Numerous sites state that Buffett and his partners scored a
> coup c. 1964 when the partnership put 40% of its stock in
> the troubled American Express Company (AXP) (after it had
> tanked by 50% on "bad news") for $35 a share. By 1967, AXP
> had risen to $180. Does this explain much of his success in
> the aforementioned 10-year period? If so, uh, foul!
Nice research here. But why the foul?
-Will
william dot trice at ngc dot com
--------------------------------------
Elizabeth Richardson
"PeterL" <po....@gmail.com> wrote in message >
> There are plenty of other Buffetts, just that they are not nearly as
> famous.
>
Or wealthy.
Elizabeth Richardson
Gil Faver
> On Jun 21, 12:28 pm, "Gil Faver" <rowdy'sb...@xxyz.com> wrote:
>
>>
>> Let's not forget that Buffet buys "at a steep discount to intrinsic
>> value"
>> as part of the whole Estate Tax fiasco. No wonder he opines against its
>> repeal.
>>
>
>
> Can you explain this connection?
http://article.nationalreview.com/?q=OWM0MjZmZTQzMmM5ODFhNTY5MjQxOTQxMzNlOWQ3MzQ
dapperdobbs
> Elle wrote:
> > Numerous sites state that Buffett and his partners scored a
> > coup c. 1964 when the partnership put 40% of its stock in
> > the troubled American Express Company (AXP) (after it had
> > tanked by 50% on "bad news") for $35 a share. By 1967, AXP
> > had risen to $180. Does this explain much of his success in
> > the aforementioned 10-year period? If so, uh, foul!
>
> Nice research here. But why the foul?
>
> -Will
>
I definitely agree, nice piece of research Elle did there.
Not his foul, IMO, but a foul for the people who tab the stats for
BRKSY. Not to disparage Buffett, but the public noise over the fund's
performance - *without explaining AXP and private company
contributions* - may have discouraged many would-be individual
investors. I can't be the only one who has felt downright stupid, can
I:?
W. Wells
strong bank that will probably keep paying its dividend and he had a lot of
cash to park that would get better return than cd's etc.
>>> Let's not forget that Buffet buys "at a steep discount to intrinsic
>>> value"
>>> as part of the whole Estate Tax fiasco. No wonder he opines against its
>>> repeal.
--------------------------------------
BreadW...@fractious.net
> "PeterL" <po....@gmail.com> wrote in message
> news:e544ba93-0588-471b...@p39g2000prm.googlegroups.com...
> > On Jun 21, 12:28 pm, "Gil Faver" <rowdy'sb...@xxyz.com> wrote:
> >
> >>
> >> Let's not forget that Buffet buys "at a steep discount to
> >> intrinsic value" as part of the whole Estate Tax fiasco. No
> >> wonder he opines against its repeal.
> > Can you explain this connection?
> http://article.nationalreview.com/?q=OWM0MjZmZTQzMmM5ODFhNTY5MjQxOTQxMzNlOWQ3MzQ
>
The article basically says that Buffett's got investments
in companies which make money off of efforts to avoid/minimize
the impact of estate taxes. In particular, life insurance
companies.
Secondly, it claims that his business practices - in particular,
the acquisition of family businesses - depends partly on
families having an incentive to sell out due to estate
tax issues.
The first argument is a bit of a stretch - not a huge one,
but a bit of one. I think one would be hard pressed to
show that a big chunk of the profits in the life insurance
business comes from estate-tax-planning permanent life
policies, but rather more of those profits come from
term life policies that folks hold while they have dependents,
and which never pay out because folks let them lapse.
The second argument is absurd, though. Folks sell off
family businesses to people like Buffett not mainly
because of estate taxes but rather because of control
and management and succession issues. And to cash
out. It's hard to sell off part of a business one
owns completely. It's easy to sell the whole business
to someone like Buffett in exchange for BRK stock which
can then easily be sold off a little at a time and
which also helps get professional management in place
to keep the business running - especially important
if one doesn't have, say, kids who are likely to run
the business well.
None of this, however, ties into Buffett's interest
in buying business at substantial discounts to intrinsic
value. He's said he believes the estate tax is a good
thing and while I generally disagree (it seems to make
more work for accountants and lawyers than it raises
useful tax revenues), but I am willing to take Buffett
at his word regarding this.
Norquist's attempt to paint Buffett's support for
Estate taxes as part of Buffett's self-interest-driven
investment planning is, at best, just political posturing.
Norquist can make better arguments against the Estate
tax without taking these potshots at Buffett. And Buffett's
investment strategies work just fine whether that tax
is in place or not.
There is one interesting piece which ties into all of
this which has not been mentioned, though - a stock
which simply accumulates capital value and pays no
dividends - under current Estate tax structures an
heir who inherits that stock gets a "stepped up basis"
on the value of the stock. Under the provisions of
the Estate tax repeal in 2010, while the estate pays
no tax on the inheritence, the heirs will ultimately
pay, instead, much larger cap-gains, since they will
inherit the lower cost basis of the original purchaser.
Under existing rules, the Estate tax exemption allows
some cap-gains to never be taxed (ie. any estate which
falls below the exemption, heirs get stepped up basis,
but no taxes are paid on the estate). Under Repeal,
much smaller estates may be hit when heirs sell
appreciated properties (though there is a provision
for executors to allowate "increased basis" of $1.3
million to assets in the estate and up to $3million
to assets transferred to surviving spouses) - those
provisions may not be as generous in many instances
as existing step-up basis provisions.
As far as these basis issues affecting Buffett, well,
the truth is that it'll only substantially affect
the very wealthy heirs of folks who bought BRK a
long time ago. But, again, that's not very specific
to Buffett or his stock-picking and investment strategies.
--
Plain Bread alone for e-mail, thanks. The rest gets trashed.
No HTML in E-Mail! -- http://www.expita.com/nomime.html
Are you posting responses that are easy for others to follow?
http://www.greenend.org.uk/rjk/2000/06/14/quoting
--------------------------------------
Elle
Ever in search of brevity, snip
> But why the foul?
To me the OP's article suggested that Buffett was a sage as
a stock picker. But if much of his success in this single
ten-year period was due mostly to a single, very good stock
selection, then to me, this does not define a sage. I think
Buffett is still good with his stock and non-publicly traded
company investments, as evidenced by, for one, the last ten
years per
http://www.berkshirehathaway.com/letters/2006ltr.pdf . BH
stock beat the S&P by about 6% on average per annum from
1997 to 2006. But I hesitate to infer this denotes
wizard-like stock picking, though, since the BH company does
not buy solely stocks.
On the third hand, the guy does not exactly tout himself as
a wizard. In the letter linked above, Buffett writes with
great humility about the mistake he and one of his partners
made when they bought Blue Chip Stamps decades ago. On the
fourth hand, freely describing mistakes one has made is the
sign of someone who is honest, learns from the mistakes,
etc. This might put him back in the oracle category in many
people's eyes. It improves his credibility, and so forth, to
me.
Elle
> As far as Buffett investing in BAC, I think that he has
> found that it is a strong bank that will probably keep
> paying its dividend and he had a lot of cash to park that
> would get better return than cd's etc.
I see media reports from early 2007 noting the lack of
transparency in banks reporting exposure to subprime
mortgages. No one (except maybe insiders of each bank) could
say which bank had the most exposure. Choosing banks in
which to invest then becomes capricious. Buffett IIRC spoke
about the real estate bubble and tranching mortgages, that
these were insanity. Is the current pricing of BAC based
merely in hysteria? Or is it based in little factoids like
it has had huge writedowns and has a dividend payout ratio
that shot up to over 100% recently? I do not think so. It is
hard for me to believe that Buffett would not proceed with
more caution when purchasing banks last summer, unless he
made a mistake. I would have thought someone like him would
hope for a dive in the BAC price rather than buying near a
high in a precarious time for mortgages and housing and so
banks.
Still, for the long term, we laypeople might extrapolate
what happened c. 1991 and the following five years. Many
banks recovered and restored their dividends.
To be revisited in five years or so. Or it would sure make
sense if Buffett bought more BAC right now, wouldn't it? If
he does not, well I think he knows he got burnt at least a
little.
Douglas Johnson
>
>"PeterL" <po....@gmail.com> wrote in message
>news:e544ba93-0588-471b...@p39g2000prm.googlegroups.com...
>> On Jun 21, 12:28 pm, "Gil Faver" <rowdy'sb...@xxyz.com> wrote:
>>
>>>
>>> Let's not forget that Buffet buys "at a steep discount to intrinsic
>>> value"
>>> as part of the whole Estate Tax fiasco. No wonder he opines against its
>>> repeal.
>>>
>>
>>
>> Can you explain this connection?
>
>
>http://article.nationalreview.com/?q=OWM0MjZmZTQzMmM5ODFhNTY5MjQxOTQxMzNlOWQ3MzQ
I thought better of the National Review than this. It is worth reading only as
an exercise in critical thinking and reading. You can expect any article that
says "Buffett is another of those leeches. Buffett is another of those leeches."
(yes, twice) to be long on emotion and short on facts.
This article does not disappoint. It connects a few (mostly correct) facts with
a great deal of emotion and inference. Bread did a nice job of dissecting the
details.
-- Doug
Elle
self-interest: Sure, maybe... uh... come on... hogwash. In
his testimony to the Senate, he said the estate tax revenues
need to go back to the poor, and he elaborated on exactly
how. Media reports say he has been a long time proponent of
wealth re-distribution. He's been a supporter of both
Senators Obama and Clinton (and no GOPers). He's known as
the biggest Democrat in the country. The clincher: He's
leaving the bulk of his fortune to charity, and very little
to his kids. Self-interest, hooey, unless the guy wants to
be remembered for getting money for himself so he can give
it away to others.
Don
> Media reports say he has been a long time proponent of
> wealth re-distribution. He's been a supporter of both
> Senators Obama and Clinton (and no GOPers). He's known as
> the biggest Democrat in the country. The clincher: He's
> leaving the bulk of his fortune to charity, and very little
> to his kids.
I'll bet the old time rich folks like the Rockefellers, the
Vanderbilts, the Carnegies, the Hunts, and any others that may still be
around, hate Buffett with a passion (along with the internet, USNET
newsgroups, U-tube, Myspace, and all the other places where voices of
criticism arise nowadays and cannot be silenced). Buffett actually put
some of his own money into the Bill and Melinda Gates foundation,
instead of starting a new foundation in his own name! That would be
like the Vanderbilts turning money over to a Rockefeller foundation.
What is the world coming to? And, just think of it, giving the bulk to
charity instead of heirs. Buffett money surely should go to Buffett
kids, or else someone might get the idea Rockefeller money should not
go to Rockefeller kids! And I'll bet the Titans of finance are fed up
with financial planning newsgroups on the internet that actually advise
working-class commoners how to invest responsibly and avoid ripoffs and
make profits for themselves.
Douglas Johnson
>
>I'll bet the old time rich folks like the Rockefellers, the
>Vanderbilts, the Carnegies, the Hunts, and any others that may still be
>around, hate Buffett with a passion
Again, too broad a brush. From the Wikipedia article on Andrew Carnegie:
"By the time he died, Carnegie had given away $350,695,653 (approximately $4.3
billion, adjusted to 2005 figures). At his death, his last $30,000,000 was
likewise given away to foundations, charities, and to pensioners."
-- Doug
PeterL
> "PeterL" <po.n...@gmail.com> wrote in message
>
> news:e544ba93-0588-471b...@p39g2000prm.googlegroups.com...
>
> > On Jun 21, 12:28 pm, "Gil Faver" <rowdy'sb...@xxyz.com> wrote:
>
> >> Let's not forget that Buffet buys "at a steep discount to intrinsic
> >> value"
> >> as part of the whole Estate Tax fiasco. No wonder he opines against its
> >> repeal.
>
> > Can you explain this connection?
>
>
Wow, that's what I would call a very loose connection.
PeterL
> On 2008-06-21 15:06:23 -0700, Will Trice <wtr...@notmonitored.com> said:
>
> > For what it's worth, an article in the 8/7/07 _U.S. News & World
> > Report_, "Built to Make Billions?", quotes a study that concluded that
> > Buffett's investment record cannot be due to chance alone.
>
> Well, yes, that is probably true. He could not have done it without
> talent and knowledge, as well as hard work and study. I would be
> inclined to say that what is due to chance is his number one rank in
> being way out ahead of many other investors who are equally talented.
>
> In other words, I doubt if Buffett possesses any unique talent, or
> magic, or special ability to make accurate predictions about the future
> not possessed by many other investors.
>
Buffett's, and other successful investors, do not rely on "special
ability to make accurate prediction about the future" for their
success. Other than a reliance on the long term benefits of publicly
traded equities, there is no need to predict the future. In fact, it
is not possible to predict the short term direction of the market with
any rate of success. The long term growth of the market is known to
everyone for a long time so there is no need to make any predictions.
Don
> Again, too broad a brush. From the Wikipedia article on Andrew Carnegie:
>
> "By the time he died, Carnegie had given away $350,695,653 (approximately $4.3
> billion, adjusted to 2005 figures). At his death, his last $30,000,000 was
> likewise given away to foundations, charities, and to pensioners."
Strike Carnegie from my list. I forgot about all those great libraries
he created. Come to think of it, all those people, or most of them,
made extensive charitable contributions.
Somehow, I still believe they would look askance at Buffett and his
strange ideas.
Don
> Buffett's, and other successful investors, do not rely on "special
> ability to make accurate prediction about the future" for their
> success. Other than a reliance on the long term benefits of publicly
> traded equities, there is no need to predict the future. In fact, it
> is not possible to predict the short term direction of the market with
> any rate of success. The long term growth of the market is known to
> everyone for a long time so there is no need to make any predictions.
Anyone who speculates that one stock will do better than another over
any time frame in a sense is predicting the future. The real question
is: What accounts for Buffett's spectacular results when other equally
talented and hard-working investors had good, but not spectacular
results? My suspicion is that chance played a large role. In the
uncertainties of financial markets the player who comes in first does
not always have any special ability not possessed by the runners-up.
PeterL
> On 2008-06-23 13:36:35 -0700, Douglas Johnson <p...@classtech.com> said:
>
> > Again, too broad a brush. From the Wikipedia article on Andrew Carnegie:
>
> > "By the time he died, Carnegie had given away $350,695,653 (approximately $4.3
> > billion, adjusted to 2005 figures). At his death, his last $30,000,000 was
> > likewise given away to foundations, charities, and to pensioners."
>
> Strike Carnegie from my list. I forgot about all those great libraries
> he created. Come to think of it, all those people, or most of them,
> made extensive charitable contributions.
>
> Somehow, I still believe they would look askance at Buffett and his
> strange ideas.
>
what are his "strange" ideas?
Don
> what are his "strange" ideas?
Giving his money to a foundation set up by someone else, passing on a
relatively small part of his wealth to heirs, supporting Democrats in
national elections, living in a rather modest dwelling in Omaha,
advocating redistribution of wealth. ( I thought these ideas to be
"strange" only from the point of view of what I called "old time rich
folks." Nowadays they are becoming less and less strange.)
Default User
> On 2008-06-23 19:47:34 -0700, PeterL <po....@gmail.com> said:
>
> > what are his "strange" ideas?
>
> Giving his money to a foundation set up by someone else, passing on a
> relatively small part of his wealth to heirs, supporting Democrats in
> national elections, living in a rather modest dwelling in Omaha,
> advocating redistribution of wealth. ( I thought these ideas to be
> "strange" only from the point of view of what I called "old time rich
> folks." Nowadays they are becoming less and less strange.)
But Buffet isn't "old time rich". He's from what sounds like
upper-middle-class background.
Brian
PeterL
> On 2008-06-23 19:47:34 -0700, PeterL <po.n...@gmail.com> said:
>
> > what are his "strange" ideas?
>
> Giving his money to a foundation set up by someone else, passing on a
> relatively small part of his wealth to heirs, supporting Democrats in
> national elections, living in a rather modest dwelling in Omaha,
> advocating redistribution of wealth. ( I thought these ideas to be
> "strange" only from the point of view of what I called "old time rich
> folks." Nowadays they are becoming less and less strange.)
>
Unusual maybe, but definitely not strange.
Don
> But Buffet isn't "old time rich". He's from what sounds like
> upper-middle-class background.
I know; he definitely is not "old time rich." What I was trying to say
is that those old time rich folks and any of that ilk who are still
around today would disapprove of Buffett's methods of managing wealth.