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rffrydr
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 Posted: Tue Jan 17, 2006 11:53 am Post subject: BUFFETT |
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Okay, you wanted it Henry, I'm going to strart throwing my 2cents in on this board. Remember, it's all, IMHO.
Warren Buffett's record speaks for itself--but what it says is deceptively simple. What he's actually done is far less basic than we believe.
Don't forget this guy's called "The Wizard of Ohmaha." Yes, he's a plain-talking, plain shootin' ol' coot from the plains--but what he actually does is anything but "basic," or "value-oriented" in the way the full-color glossy brokerage PR we all get with our first account.
Buffett is renown for a great many things underscoring a basic sense of "valuation"--the midwestern college student salespitches being the latest. But you'll notice the older he gets the less "value" really has to do with his success. Whatever elese Warren Buffet is, BH is nothing without INSURANCE AND COKE.
He was buying this sugar water in 96 with PE through the roof. Meanwhile Microsoft et. al. was dismissed as so much snake oil. If I'm not mistaken Buffet didn't buy his first tech company til well after that bubble and that was really just insider deal between his ol' buddy--nepotism in a word. The all-wise WB COMPLETELY missed the biggest commercial revolution of our age. Perhaps he understood the experience of the railroads at the turn of the century or Ford's five BKs before getting the Model T right (which wasn't about cars), and in that, should be extolled, I suppose--not by The Street.
There are a hundred colas and it's been scientifically shown that what we taste is the can! PE's are commonly DOUBLE the SP. Where's the "value" in this? The "value" is precisely that: What we taste is the can. And the "we" in this sentence is the world. And what a brand Coke is! The company which made a profit under Hitler and brought us our modern notion of Santa Clause, the company selling to north and south during the Vietnam war and the worst kept "secret (recipe) in the world, is the non plus ultra of brands. Where is the value? The value is "myth"!
"Mutual of Omaha is people, people you know you can trust." There's something about the the midwest and Insurance. Probably something to do with strong moral fibre matched only by an appetite for risk in their grain growing hermitage that would make a riverboat gambler blush (hey, that expression came from the Mississippi--point!). What does this industry sell? what is it's "product"? Fear. Statistically parsed and geographically spread it's fear we pay for in that 100 shares of GenRE. Where's the "value"?-- what does the "Value Investor" buy. The value is "fear."
And lastly, you can't be a "wizard" unless you are old. Waren's old, and the "Rich get Richer." How? Not in value investing. In "value" stocks paying dividends and dividends compounding. This is called the "majic" of compounding. As we find out in the newspaper obits, it has made many a depression-era spend-thrift rich. In that way, WB truely is, a "wizard."
I like and admire Warren Buffet. But what does he really tell us, the market speculators, the news-letter subscribers? I may also note there are "investments" you can make as billionaire that I'm just never going to pull off. I can't buy the Board. As far as I'm concerned, WB is head-and-shoulders above the rest and that's exactly where he should stay.
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rffrydr
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| Posted: Mon Aug 10, 2009 10:29 pm Post subject: |
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Buffett had no problem jumping on THE chinese national champion and popular bandwagon, PTR. The company was as big and made as much money as the government declared. The money Buffett made was entirely on the backs of that same country's citizenry however. But that's just nationalism. He wasn't the only one. Investors who wouldn't give such companies as C, GM, MBI or Airbus the time of day pile high into Putin's playthings and chinese overachievers.
The real govt. haters won't buy "stock" at all--they pile into real assets. Hello RIO investors, you too will learn this dance:
http://ftalphaville.ft.com/blog/2009/08/10/66151/a-bad-week-for-chinas-facts-and-figures/
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HenryTo
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| Posted: Mon Aug 10, 2009 6:32 pm Post subject: |
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| Bill, this is my institutional side speaking today. But over the very long-run - say a few generations of investors - there is no substitute for having the necessary public policy connections to long-term investment success. Americans have gotten away without the need for it - but plenty of international investors will tell you otherwise. The locals who understood what the Reichsbank was doing prior to its hyperinflation policies in the early 1920s made or managed to avoid losing a fortune. Same goes for the Hong Kong citizens who made it to mainland China just before the Japanese landed in December 1941. Then there are guys like Jay Cooke and Andrew Carnegie who made a fortune during the Civil War. |
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nodoodahs
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| Posted: Mon Aug 10, 2009 3:34 pm Post subject: |
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| HenryTo wrote: | | Having the necessary information network - in addition to the necessary connections and public policy clout - is also essential to long-term investing success. |
Essential per se? No.
Information network is helpful for all sizes of trader.
Connections and public policy clout is only really helpful, or perhaps, necessary, for very large speculators. I think you can make a living without them, but if you want to swing a big enough line to make a FORTUNE, then you’ll either find the connections, or they’ll find you.
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I've long since gotten past that "that's the game and that's how it's played" revelation.
What's still slightly annoying to me is that the players themselves are such hypocrites about it. Although, really, that IS part of the game.
What will always be REALLY annoying to me is how the cult of celebrity-worshippers actually BELIEVE the hypocrites.
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HenryTo
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| Posted: Mon Aug 10, 2009 10:38 am Post subject: |
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| Having the necessary information network - in addition to the necessary connections and public policy clout - is also essential to long-term investing success. |
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rffrydr
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| Posted: Mon Aug 10, 2009 10:09 am Post subject: |
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It's only when the tide goes out do we see the color of your speedo. 
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nodoodahs
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| Posted: Mon Aug 10, 2009 9:50 am Post subject: |
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http://blogs.reuters.com/rolfe-winkler/2009/08/04/buffetts-betrayal/
| Quote: | Buffett’s Betrayal
Posted by: Rolfe Winkler
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Today, Buffett remains famous for investing The Right Way. He even has a television cartoon in the works, which will groom the next generation of acolytes.
But it turns out much of the story is fiction. A good chunk of his fortune is dependent on taxpayer largess. Were it not for government bailouts, for which Buffett lobbied hard, many of his company’s stock holdings would have been wiped out.
Berkshire Hathaway, in which Buffett owns 27 percent, according to a recent proxy filing, has more than $26 billion invested in eight financial companies that have received bailout money. The TARP at one point had nearly $100 billion invested in these companies and, according to new data released by Thomson Reuters, FDIC backs more than $130 billion of their debt.
To put that in perspective, 75 percent of the debt these companies have issued since late November has come with a federal guarantee.
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And this excludes the emergency, opaque lending facilities from the Federal Reserve that also helped rescue the big banks. Without all these bailouts, the financial system would have been forced to recapitalize itself.
Banks that couldn’t finance their balance sheets would have sold toxic assets at market prices, and the losses would have wiped out their shareholder’s equity. With $7 billion at stake, Buffett is one of the biggest of these shareholders.
He even traded the bailout, seeking morally hazardous profits in preferred stock and warrants of Goldman and GE because he had “confidence in Congress to do the right thing” — to rescue shareholders in too-big-to-fail financials from the losses that were rightfully theirs to absorb.
Keeping this in mind, I was struck by Buffett’s letter to Berkshire shareholders this year:
“Funders that have access to any sort of government guarantee — banks with FDIC-insured deposits, large entities with commercial paper now backed by the Federal Reserve, and others who are using imaginative methods (or lobbying skills) to come under the government’s umbrella — have money costs that are minimal,” he wrote.
“Conversely, highly-rated companies, such as Berkshire, are experiencing borrowing costs that … are at record levels. Moreover, funds are abundant for the government-guaranteed borrower but often scarce for others, no matter how creditworthy they may be.”
It takes remarkable chutzpah to lobby for bailouts, make trades seeking to profit from them, and then complain that those doing so put you at a disadvantage.
Elsewhere in his letter he laments “atrocious sales practices” in the financial industry, holding up Berkshire subsidiary Clayton Homes as a model of lending rectitude.
Conveniently, he neglects to mention Wells Fargo’s toxic book of home equity loans, American Express’ exploding charge-offs, GE Capital’s awful balance sheet, Bank of America’s disastrous acquisitions of Countrywide and Merrill Lynch, and Goldman Sachs’ reckless trading practices.
And what of Moody’s, the credit-rating agency that enabled lending excesses Buffett criticizes, and in which he’s held a major stake for years? Recently Berkshire cut its stake to 16 percent from 20 percent. Publicly, however, the Oracle of Omaha has been silent.
This is remarkably incongruous for the world’s most famous financial straight-shooter. Few have called him on it, though one notable exception was a good article by Charles Piller in the Sacramento Bee earlier this year.
Buffett didn’t respond to my email seeking a comment.
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rffrydr
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rffrydr
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| Posted: Fri Aug 07, 2009 12:38 am Post subject: |
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....without having to own them--or their stock. 
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HenryTo
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| Posted: Wed Aug 05, 2009 10:57 pm Post subject: |
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Berkshire projected to post its highest gain in book value ever:
http://www.bloomberg.com/apps/news?pid=20601087&sid=ajElYiFbKLhY
Good ol' Warren pulled off what a lot of folks couldn't pull over the last two years - making a bundle by providing liquidity to the financial institutions. |
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rffrydr
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| Posted: Mon May 11, 2009 9:15 am Post subject: |
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Berkshire results take WB back to pre-history. The derivatives put him in a too-clever position but it's Peak Oil that really burned. Unmentioned was the PetroChina stake. Had it not been for the madness of chinese national pride expressed in the buying of this stock he'd stuck in it now, nursing a stake-in-the-heart. But just buying even one share at the peak of that mountain is enough to rattle a wizard like him.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aaClgQ3x013o
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rffrydr
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| Posted: Sun May 10, 2009 12:46 am Post subject: |
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Irony is the cycle made abstract--and the indicator that won't be denied. As with all cycle analysis, the questions arise with the timing....and the expression.
So now we can say it, fear is the ultimate derivative....and Buffett the clown face on this "weapon of mass destruction." And all the wizards of Omaha were shown to have no monopoly on this market, "security." That it would come from the land of the farmer, the salt of the earth, head to the heavens, should surprise no-one. The dice of the wind and rain in his grip, is not the farmer civilization's greatest gambler?
The Goldman buy-in may have been at once his grandest and most pale moment. Cashing in on the icon while putting his money behind...nothing. Brand marketing in its purest form.
Fear finally caught up to this man of Trust. Order breeds chaos. The latter is a testament to his achievement and power in the construction of the former. Yes, even cold cash needs...demands its heroes. If Warren never lived we would have invented him. Equations need revisiting. Behind every quantity there is quality. --And out of chaos order demands restoration. The stress test was a journey, not a destination. Thank you, WB.
Now he will end his career like the Medici's began, financing the state. Rates will have to be ratcheted up, of course. Is there nothing left to insure?
Berkshire may be the one longstanding entity (Exxon?...) in our most free of free markets that has the authority to defy its mark. The longterm may be the greatest value for his "shareholders."
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