Legendary value investors' secrets
December 22, 2024
“You don’t try and buy businesses worth $83 million for $80 million. You leave yourself an enormous margin (of safety). When you build a bridge, you insist it can carry 30,000 pounds, but you only drive 10,000-pound trucks across it. And that same principle works in investing. ” – Warren Buffett on what Benjamin Graham,…
Read More about Margin of safety“In my opinion, investment success will not be produced by arcane formulae, computer programs or signals flashed by the price behavior of stocks and markets. Rather an investor will succeed by coupling good business judgment with an ability to insulate his thoughts and behavior from the super-contagious emotions that swirl about the marketplace.” – Warren…
Read More about Warren Buffett on investment successDoes Warren Buffett or Berkshire Hathaway hold certain stocks forever? To answer this question, one needs to go back to Berkshire Hathaway’s 2016 Annual Report 2016, in which chairman Warren Buffett said: “Sometimes the comments of shareholders or media imply that we will own certain stocks “forever.” It is true that we own some stocks…
Read More about Does Warren Buffett or Berkshire Hathaway hold certain stocks forever?“Long ago, Sir Isaac Newton gave us three laws of motion, which were the work of genius,” Warren Buffett said in a comment in Berkshire Hathaway’s FY2016 annual report. “But Sir Isaac’s talents didn’t extend to investing: He lost a bundle in the South Sea Bubble, explaining later, “I can calculate the movement of the stars,…
Read More about The Fourth Law of Motion that Sir Isaac Newton failed to discoverBackground on Warren Buffett’s US$500,000 wager: Warren Buffett said in Berkshire’s 2005 annual report that active investment management by professionals – in aggregate – would over a period of years underperform the returns achieved by rank amateurs who simply sat still. Recalling his argument, he said in his FY2016 letter to Berkshire Hathaway shareholders: “I explained…
Read More about Warren Buffett is set to win this US$500,000 wager1. Don’t overstress diversification Investors have been so oversold on diversification that fear of having too many eggs in one basket has caused them to put far too little into companies they thoroughly know and far too much in others about which they know nothing at all. “It never seems to occur to them, and…
Read More about Philip Fisher’s five more don’ts for investorsCommon Stocks and Uncommon Profits by Philip Fisher lists five don’ts for investors 1. Don’t buy into promotional companies All too often, young promotional companies are dominated by one or two individuals who have great talent for certain phases of business procedure but are lacking in other equally essential talents. They may be superb salesmen…
Read More about Five don’ts for investors: Philip FisherFor a man like Berkshire Hathaway chairman Warren Buffett who doesn’t personally own an iPhone, one wonders why he more than doubled Berkshire Hathaway’s holdings in Apple to about 2.5 per cent in January 2017. At that point, Mr Buffett owned US$17 billion worth of the tech giant’s stock In a CNBC report on 27…
Read More about Philip Fisher’s scuttlebutt methodIn Chapter 5 (The Defensive Investor and Common Stocks) of The Intelligent Investor, Benjamin Graham, the father of value investing, touched on various aspects of defensive investment, among which was dollar-cost averaging, an application of a “formula investment”. Elaborating, he said: “The New York Stock Exchange has put considerable effort into popularizing its ‘monthly purchase…
Read More about Benjamin Graham on dollar-cost averaging