Buffett

Warren Buffett experience

August 30, 1930, Warren Buffett was born in the United States Nebraska Spurs, Nebraska, Warren Buffett investment from the very consciousness, his favorite figures in the stock and the extent of far more than the family of any person. He is earning full stomachs, children, five-year-old at home when Baidenan peddle chewing gum. Slightly larger than small partner after he led the seizure wealthy Stadium used to golf, and then resell reselling business is in the fire. In high school, in addition to use after-school newsboy, he also will partner with partners billiards ball game rented to barber shop owner who earn quick money.
1941, we had just entered the 11-year-old, he Yuejuan Unit sea, the first to buy stock in his life.
1947, Warren Buffett entered the University of Pennsylvania to study finance and business management. But he learned professors have not satisfied the empty theory, Bucierbie after two years, was admitted to Columbia University to their financial system, imam investment in the well-known theory of Jurists Benjamin Graham. Subglottic in Graham, Buffett. Graham, the anti-speculation, and stands for the profit of enterprises, assets and future prospects and other factors to evaluate stocks. Professor Warren Buffett to his wealth of knowledge and know-how. Very talented Graham Buffett quickly became the proud protege.
Buffett 1950 for the Harvard University have been shut out.
In 1951, 21-year-old Buffett graduate studies, he received the highest A +.
In 1957, Buffett charge of the funds reached 300,000 US dollars, but rose to the end of 500,000 US dollars.
1962, Buffett's partner in the capital of 7.2 million US dollars, of which 1 million are Buffett personal. He was several corporate merger partner as a "Buffett Limited Partner." Minimum investment in the amount of 10 million dollars. China is a bit like the situation of private funds, or private investment company.
1964, Buffett's personal wealth to 4 million US dollars, at a time when he has been in charge of the funds up to 22 million US dollars.

Spring 1966, the United States bolstered the stock market, but Buffett has fidgety although his stock in the soaring, but found it difficult to find with his standard of a cheap stock. Although the stock market speculation crazy trip home to the speculation brought windfall, but Buffett has remained unmoved, because he thinks stock prices should be built on the growth of corporate performance rather than on the basis of speculation.
October 1967, Buffett charge of the funds reached 65 million US dollars.
1968, Buffett's shares in its history made the best results: an increase of 59 percent, while the Dow Jones index increased by only 9%. Buffett charge of the funds rose to 100 million, 4 million US dollars, of which there are Buffett's 25 million US dollars.
May 1968, when the stock market is in a paean, Buffett has informed the partners, he had to retreat. He then gradually cleared Buffett partners almost all the company's shares.
June 1969, and the stock market down, and gradually evolved into the stock market crash, in May 1970, each stock should be compared with the previous year decreased by 50%, or even more.
1970 1974, the United States stock market like a ball to vent the gas, not the slightest angry, persistent inflation and low economic growth, the United States has entered a "stagflation" period. However, the loss was secretly delighted that Buffett is unusual because he has seen billowing from the forthcoming financial resources ─ ─ he found too many cheap stocks.
In 1972, Buffett also locked in the industry, because he found a brand owned newspapers, like the one owned toll bridges, any visitors must leave the money to buy road. In 1973, he began secretly in the stock market nibbled "Boston Globe" and the "Washington Post", and his intervention to "Washington Post" profit increase, an annual average growth of 35 per cent. After 10 years, Buffett invested 10 million for the two billion dollar.
In 1980, he used 120 million US dollars to the price of 10.96 US dollars per share to buy 7% of the shares of Coca-Cola. To 1985, Coca-Cola changed its business strategy to begin disinvestments funds into beverage production. Its stock price has rose to 51.5 US dollars, up five times. As for making a number, the number will allow investors around the world speechless.
Buffett in 1992 to 74 dollars a purchased 435 million American high-tech defense industry companies - General Dynamics company's stock, the end of the year rose to 113 yuan shares. Buffett has in the six months before the 32,200 million stock has a value of 49,100 million dollars by the end of 1994 with 23 billion US dollars has developed into the Royal Berkshire Hathaway industry, it no longer is a spinning plant, It has become Buffett's huge investment Financial Group. From 1965-1994, the average annual stock Buffett's value-added 26.77%, higher than the Dow Jones industrial average nearly 17 percentage points. If the Who's 1965 Buffett's investment company 10,000 US dollars, then to 1994, he could have been 11.3 million US dollars in return, that is, if the 30 who chose to first Buffett will come to sit down at the wealth Rockets.
March 11, 2000, Buffett's Berkshire Hathaway Web site of the annual open letter - a heavy letter. Figures show that the President of the Warren Buffett of Berkshire Hathaway investment fund group, net income last year dropped by 45 per cent, from 2.83 billion US dollars fell to 1.557 billion US dollars. Berkshire Hathaway's A-share price dropped 20% last year, is the only one in 90 fell at the same time the book Berkshire Hathaway profit increased only 0.5 percent, far lower than the same period the Standard & Poor's 21% growth in 1980 Since the first backward.
March 1, 2007 night, "Share God" unit of Warren Buffett's investment flagship company - Berkshire Hathaway Hasawei (Berkshire Hathaway) released its fiscal 2006 results, statistics show that, Hurricane benefit from the "Shuangdi", the company's main insurance business profitable results, Berkshire Hathaway company profit last year grew by 29.2 per cent, profit amounted to 11.02 billion US dollars (over the same period in 2005 of 8.53 billion US dollars) for each Unit profit 7,144 US dollars (2005 to 5338 US dollars).
1965-2006, the 42, Berkshire Hathaway's net assets with an annual growth rate of 21.4% cumulative growth of 361,156% During the same period the Standard & Poor's 500 index components company's average annual growth rate of 10.4%, and total growth rate for 6479 %.
March 1, 2007, the company Berkshire Hathaway A shares rose 410 US dollars, to 106,600 US dollars. Berkshire Hathaway A shares last year rose 23%, in contrast, the S & P 500 Index constituent stocks or stock average only 9%.
Buffett is the greatest investment ever home, he relies on the stock and foreign exchange markets and investment become one of the world's billionaires. He championed the value of investment theory sweeping the world. Value investing is not complicated, Buffett has been attributed to its three points: the stock as many micro-business unit; to market fluctuations as your friend rather than the enemy (sometimes profit from the blind adherence to a friend); Buy stock price should be lower than the price you can bear. "In the short term, the market is a voting calculator. But in the long run, it is a weighing device" - in fact, is not difficult to grasp these concepts, but very few people can be as few as 10 years if a Buffett , and stick to it. Buffett never seems to be trying to make money through stocks, he bought shares based on: Suppose the stock market closed the next day, or within five years no longer re-opened. Appears in the value of investment theory, to see if the market fluctuations that profitable, and has become a speculative investment, nothing more than a gambling mentality affect investments. "

Buffett on June 25, 2006 announced that he would donate the total amount of 37 billion US dollars of private wealth into charitable causes. This will be huge money into the world's richest man, Microsoft Chairman Bill Gates Foundation, as well as the creation of the Buffett family charitable foundations. Buffett donation of 37 billion US dollars so far in the United States is the largest private charitable donations.
According to a Reuters report, Berkshire Hathaway - Hathaway CEO Warren Buffett's investment company, 75 years old, "Forbes" magazine estimated he was worth to 62 billion US dollars, is the world's richest man. 37 billion yuan, the extent of Buffett property accounted for about 60 per cent.
Buffett wrote in a Bill and Melinda Gates Foundation said in the letter that he will donate 10 million shares of Berkshire Hathaway stock company of B shares, according to market value, equivalent to cover Buffett Mainz Fund donated 30 billion US dollars.
Gates Foundation said in a statement: "We have our friend Warren Buffett's decision flattered. Chose him to the Bill & Melinda Gates Foundation to donate most of his wealth to solve the world The most challenging problem of inequality. "
In addition, Buffett will be created for the late wife of charitable funds donated 100 million shares to his three children, while the charitable funds donated 35 million shares.
Not long ago, Gates has just announced that he will be gradually handed over his two years in Microsoft's day-to-day management responsibilities, devoted to the work of the Gates Foundation. Gates Foundation's total assets had reached 30 billion US dollars at present. The Foundation is committed to helping developing countries, the United States and the development of the cause of medical education.


March 6, 2008, "Forbes" magazine released the latest list of the world's richest people, as Buffett's stock soared, assets soared from 10 to 62 billion US dollars, won the world's richest man, Mexico telecom Hensley Alem to 60 billion US dollars in second place, 13 reelection as the richest man in the title Microsoft Chairman Bill Gates relegated to the third.

Buffett investment "pot of gold" law

A foolish use of the market, with regular investment.
The decision to return the purchase price level, even long-term investment as well.
Compound growth of profits and transaction costs, investment tax benefit endless.
Do not care about the coming year, the company earns a certain number, as long as the care of their next five to 10 years the number is going.
Only invest in the future companies with high earnings certainty.
Inflation is the greatest enemy of investors.
Value-and growth-oriented investment philosophy are interlinked. Is the value of an investment in future cash flows discounted value, and growth is forecast to be used in determining the value of the process.
Investors and the financial success of his investment enterprises proportional to the degree of understanding.
"Marginal safety" from the following two aspects to your investment. First is the buffer price risks may be followed by the availability of relatively high interest rate of return.
With a stock and look forward to its next week on the rise, is very foolish.
Even Federal Reserve Chairman secretly told me that the next two years monetary policy, I would not have it any change my investment as a.
Ignore the stock market analyst, the economic situation is not worried that the changes do not believe that any forecast, do not accept any information that only pay attention to two points: A. What to buy stocks; B. purchase price.
Buffett stocks of the six major elements of unbeaten

First, make money and not lose money Buffett is often cited phrase: "the first of the criteria for investment is not losing money; second criteria must never forget the first." Because if the investment dollar, the United States paid 50 points, only half of the money in hand, unless there is 100 per cent of income, can return to the starting point.
Buffett is the greatest achievement in 1965 to 2006, after three bear market, and his company Berkshire Hathaway only one year (2001) running at a loss.
Second, do not be deceived by the proceeds Buffett like to use more equity yield to the profitability of an enterprise. Equity yield is with the company's net income divided by shareholder equity, which measures the profitability of the percentage of shareholder capital to better reflect the company's profit growth.
According to the value of his investment principles, the company's rate of return of equity should not be less than 15%. Buffett's holding in the shares of listed companies, Coca-Cola's equity yield more than 30%, American Express of 37%.
Third, the future depends on people to Buffett called "Omaha prophet," because he always Weiyishidequ identify whether there are good prospects for development, can be in the next 25 years to continue to remain successful. Buffett is often said that through the windows to look forward, not look at the mirrors.
Forecast for future development of a solution is to calculate the company's future expected cash income worth, in today. This is the assessment of the company Buffett intrinsic value approach. Then he will be looking for those serious deviation from this value, low-priced sale of the company.
Fourth, investment will adhere to a competitor, a great "barriers" to predict the future of the company will be at risk, so Buffett preference to a competitor who can pose a huge "economic barriers" companies. This does not necessarily mean that his company will invest some exclusive products or a particular market. For example, the Coca-Cola Company has never missing competitors. But Buffett is always looking for those with long-term competitive advantage, he forecast the value of the company more security companies.
20 in the late 1990s, Buffett reluctant to invest in technology stocks is a reason: he could not see which companies have adequate long-term competitive advantage.
Fifth, we should bet on the gambling nature of the vast majority of conservative value investors. But Buffett is not. He invested 62 billion US dollars in the stock market concentrated in 45 stocks. His investment strategy, and even more radical than this figure. In his portfolio, the former accounted for 10 shares 90% of the total investment. Morningstar senior stock analyst Justin Fullerton said: "This is consistent with Buffett's investment philosophy. Not wavering, why not invest the money to your most favorite investment target?"
Sixth, if you have the patience to wait in the stock market, changing hands, it may be missing a golden opportunity. Buffett's principle is: Do not frequently changing hands, until there are good investment targets before shots.
Buffett often quoted baseball legend Ted Williams, the batter: "will be a good hitter, you must have a strike can play." If there are not any good investment, then he would prefer to hold cash. According to Morningstar statistics, cash in the Berkshire Hathaway investment company in the ratio of 18 per cent and above, and most fund companies only 4% in cash.
Buffett fiscal law: "Third, we should not three"

Following be called Buffett investment philosophy essence of the "three to three instead of" fiscal law:
To invest those who always put the interests of shareholders first enterprises. Buffett always favor those with strong stress honesty, companies with high dividend returns to the maximum to avoid the volatility of share prices, and to ensure that investment in preserving and increasing the value-added. For the wish to take advantage of share placements, such as ways to extract additional investors reject all the toil and sweat of enterprises.
To invest resources monopoly industries. From a look at Buffett's investment, roads, bridges, coal, electric power and other resources monopoly enterprises accounted for a considerable share of foreign capital in such enterprises is generally the preferred market acquisitions, and the unique advantages of industry can also ensure that the smooth efficiency .
Easy to understand the investment, promising enterprises. Buffett that any investment must own the stock knows, and is a good prospect of the industry's enterprises. Not familiar with, and the future is uncertain even if the enterprise has been more hype without Movable.
Not greedy. Wall Street in 1969 as a whole has entered a stage of frenzied speculation, in the face of even a new high of the stock market, Buffett is in the hands of up to 20 per cent of the stock when it all very calmly full parabolic.
Do not follow suit. 2000, the world stock market the so-called Internet-related stocks, Buffett has said he do not understand high-tech, not investment. One year after the global Internet stocks in the high-tech stock market crash.
Do not speculation. Buffett often say a mantra is: owning a stock, look forward to it the next morning on the rise is very foolish.
[Edit] billionaire Make this: Buffett Revelation today's financial sector financial management habits, Microsoft Chairman Bill Gates, Warren Buffett and investment tycoon Sitting two long list of the previous two. They have jointly to the University of Washington in Seattle speakers, when the University of Washington Business School students what they think about Zhifuzhidao, Buffett said: "customary strength."
The eggs in one basket Now everyone is getting stronger financial awareness, many people think that "not all the eggs in one basket", then even if a greater risk in financial assets, will not be completely annihilated. However, Buffett believes that investors should, as Mark Twain suggested, with all the eggs in one basket, and then carefully optimistic about it.
On the surface it seems that Buffett and everyone has differences, the two sides are not in fact wrong. Financial management know-how because no one size fits all truth. For example, Buffett is the internationally recognized "Share God", has a small stock holders MORE confidence. We ordinary investors Because of its energy and knowledge limitations, it is very difficult to invest in a professional-depth study on the dispersal of investment at this time may be wise. Meanwhile, Buffett's investment strategy focused on research-based, centralized decision-making. In the time and resources are limited, the number of decision-making and more natural than the success rate of investment decision-making should be less low, just like the one-child than families with many children suffered more care, and some look like zhuang.
Citizens who are not good business not to call an old Chinese saying goes: "citizens who are not good do business." Buffett has a habit of citizens who are not good stocks do, so he never could only buy some traditional industry stocks, but not touch those high-tech stocks. In early 2000, when Internet stocks upsurge, Buffett is not purchased. At that time it was agreed that he has left behind, but now I look back, buried the Internet bubble, a number of frenzied speculation home, Buffett once again demonstrated its prudent investment style master and become the biggest winners.
This example tells us that in any one must carefully before investing research, did not understand thoroughly, do not want to understand before hasty decision-making. For example, we all think that the deposit interest rate is too low, it should be to find ways to invest. The stock market slump, many people wanted in stamps and in foreign exchange, futures speculation, property investment and even investment "small owls." In fact, these channels than the risk of the stock market, are likely to lower operation also difficult than the stock market. So in the absence of their grasp, the money in savings inverted more than blind investment security.
Some people have made long-term investment statistics, each of Buffett's investment not only shares less than 8 years. Warren Buffett once said: "Short-term stock market forecast is poison, it should be placed in the most safe place, away from children and those in the stock market acts like children as naive investors."
What we see is many people Duizhangshadie the end of the day only to brokerage fees contributed, it is drawing water with a sieve own. We might as well be an account, by Buffett's floor, a stock holdings for eight years, buy sell fee is 1.5%. If these eight years, the convertible once a month, spending 1.5% of the cost of 12 months a year is 18 percent of expenditures, and eight years is not compounded, static expenditure reached 144 percent! Not ignorant of the fact that a balance Hayidiao, often in the details of the devil.

Buffett recommended investors to read the book

God Buffett shares of investment money to the gods of envy, and how these can be even a little bit of the divine? Have time to read Buffett recommended to investors read some books may help.
"Securities Analysis" (with Graham). Graham classics, professional investors required reading book, Buffett that every investors should read this book 10 times over.
"Smart investor" (with Graham). Graham written specifically for amateur investors, Buffett called "the greatest investment ever works."
"How to Select growth stocks" (with Fisher). Buffett said his investment strategy is "85% of the 15% of the Graham and Fisher." He said: "The use of Fisher's skills, can understand this line…… help make a wise investment decisions."
"Buffett's letter to shareholders: shares of the company handbook." Finishing the book collection more than 20 years Buffett's letter to shareholders in the essence of paragraphs, the book that Buffett investment philosophy is finishing its first-class work.
"Jack Welch Autobiography" (Jack Welch author), the world's CEO autobiography. Be global managers as a "CEO of the Bible." In this book the first time that management tips: In a short span of 20 years will be how the world from the 10th General Electric upgraded to second place, the market capital growth more than 30 times to 450 billion US dollars, as well as his years of growth, success stories and business philosophy. Buffett is so recommend this book: "Jack is the management sector Tiger Woods, CEO all want to emulate him. Although they can not keep up with him, but if you listen carefully to what he says, he will be able to close some more."
"Win" (with Jack Welch). Buffett said, "With the" win ", it was no other management book," although this view is exaggerated, but it has proved that the weight of the book. "Win" this type of book, and "female president tell you," and "influence" are views of the methods described with an example, if you would like to have them in a short time the skills, then you need only copy of the book all bold headings, because those are the author's summary of the various cases, a thick book, it is around these elements started. But if you think this is the essence of this book, then you are wrong, those in the real life examples, as well as the author's experience is the selling point of these books. Everyone can acquire skills, but everyone has different experiences, if you are willing to spend time reading every book examples, I believe you will be more valuable things.
Finally, Buffett is summed up his day-to-day work: "My job was to read." Buffett is the source of divine power from the reading.
Buffett's management wisdom

Despite the organizational form of the corporate system, but we will be shareholders as partners.
I and Charles Mans grid (Berkshire Hathaway - Hathaway vice chairman of the company) will be our shareholders, as owners and partners, and is the managing partner of our own people. We believe that the assets of the company itself is not the ultimate owners, it is merely a channel, shareholders and the company's assets will be linked to the company's assets and shareholders are the true owners.


Conform to the owner-oriented principles, we become self-reliant.
The majority of company directors will be the bulk of their net assets into individual companies. Charlie and I can not ensure that the operating results, but we guarantee: If you become our partners, regardless of the amount of time, our wealth will be synchronized with your movements. We have no intention through salary or stock options for your cheap.
Our long-term economic goals: to achieve a share intrinsic business value to maximize the average annual growth.
We are not to the scale of Berkshire Hathaway to evaluate its economic significance or performance. Our yardstick is the growth of share value.
In order to achieve this goal, the first choice is a diversified asset portfolio.
Our first choice is a diversified portfolio of these portfolios to create a stable cash flow, and sustained higher than the market average return on assets.
We will report every one of the major investment income, as well as the important data.
As our twin objectives of the traditional accounting methods, as well as the limitations of traditional accounting method has been difficult to reflect the true operating performance. As owners and managers, Charlie and I turn a blind eye to the fact that for these data. However, we will report to you our control every major investment income, as well as those that we think are important data.
Book results will not affect our operating and capital allocation decisions.
Assets of the target cost of similar mergers, we would prefer not to purchase reflected in the book, but can bring two US dollars income assets, which may be reluctant to purchase reflected in the books, receipts for one dollar assets.
We seldom borrowing.
When we really borrowing, we will try to fix long-term interest rates. Its excessive borrowing, but rather to give up some opportunities. Charlie and me, never to the additional 12 percentage points of return even at the expense of one night's sleep.
We will not allow shareholders to pay to satisfy the desire of the management.
We will not ignore long-term economic laws are being used to manipulate the price of the purchase of the entire company. Spend your money in, we like to spend their own money as carefully, and will be fully weigh If you own direct investment through the stock market to diversify available value.
Regardless of how noble intentions, we believe that only the result is a standard examined.
We continue to reflect on the company retained earnings is reasonable, its testing standards, each dollar of retained earnings, and at least one US dollars for shareholders in the market value. So far, we have basically achieved this point.
We can only harvest the same time and paid ordinary shares in issue.
This rule applies to all forms of distribution - not only is the public sale or acquisition, including debt-equity swap, stock options and convertible securities. Each stock represents part of the same company, but the company belongs to you.
Regardless of price, we have no intention to sell Berkshire Hathaway owned by the quality of assets.
You should be very clear, this is my Charlie and the common mindset that could undermine our financial performance. We believe that even those who are poor business, as is expected to generate cash flow, and we are its management and labour relations still satisfied with the decision of whether to sell, we will be hesitant.
We will report to you frankly performance, a positive emphasis on valuation and the adverse effects of the incident.
Our principle is that use of a transposition thinking mentality, we will want to know the real situation in reporting to you. This is our obligation, and never compromise.
We will only allow the law discussed in the context of securities trading.
Although our strategy is open to the public, but also Wusixiweigui good investment ideas, and they might have access to competitors. Similarly, a good product planning and corporate mergers and acquisitions, also in the attention to confidentiality. Therefore, we normally do not talk about their own investment ideas.
We hope that the Berkshire Hathaway stock is reasonable, and not be overestimated.
To the extent possible, and we hope that each and every one Berkshire Hathaway shareholders holding shares in the period, the income gained or losses, and the intrinsic value of a share was corresponding ratio Change. Therefore, Berkshire Hathaway shares and intrinsic value, there needs to be a constant that is 1:1.