The Buffett/Berkshire Blog

• Berkshire Hathaway continues to reduce its stake in the PetroChina company. Last week, Berkshire sold $140 million worth of shares in the company because the Chinese company may be involved in the humanitarian disaster happening in Darfur, Sudan. Buffett earlier said it had no objections against PetroChina on the last annual meeting where it was a major point of discussion.
• A man is said to have attempted to break into Warren Buffett’s Omaha house. His wife called a security guard who found the burglar with a fake gun and with camouflage paint on his face. He then fled before having even entered Buffett’s house.

Update: We appeared to be down for a while. While I have no idea what caused the downtime, we’re up again now. Sorry guys!

Popularity: 3% [?]

Warren Buffett will organize a fundraiser for the Democratic presidential candidate Barack Obama. He hopes to raise about $1 million for the black senator who is currently the second most favored candidate for the Democrats.

In a similar event, Warren Buffett sat down with Hillary Clinton, who is also running to be the party’s nominee for the presidency. It seems that the Oracle of Omaha isn’t really interested in the exact people who play the political game, but rather that he just prefers liberals, who are generally less supportive of the corporate world Buffett lives in.

Popularity: 7% [?]

IKEA is a giant furniture chain, practically owned by Ingvar Kamprad, the richest European and fourth richest man in the world. Especially in Europe, IKEA is a really big brand, some even go as far as to say that it is a kind of lifestyle. There are virtually no serious competitors to the company and it is a production and retail company, making it simple company with a big moat.

Warren Buffet, through his investment company Berkshire Hathaway, likes such companies. He has been saying in his letters that he would like to buy a big business if he can get it for a fair price. IKEA is currently held by a trust in the Netherlands and has never been publicly traded so it’s hard to say what the Kampvard family would price it for.

If such a deal went through, it would be a hugh merger. The company of the world’s third richest man buying the company of the fourth one. Wouldn’t that be fun?

Inspired by an article by Tracey’s Market Update.

Popularity: 12% [?]

A contribution by David Van Knapp

Warren Buffett is the most successful investor of our time, perhaps of any time. He is famous for his pithy quotes, which often appear in his annual letter to shareholders.

Taken together, his quotes pretty well sum up his investment philosophy and approach. Here are his best sound bites of all time on being a sensible investor.

1. “Rule No. 1: Never lose money. Rule No. 2: Never forget rule No.1.”
2. “Investing is laying out money now to get more money back in the future”
3. “Never invest in a business you cannot understand.”
4. “I don’t look to jump over 7-foot bars: I look around for 1-foot bars that I can step over.”
5. “I put heavy weight on certainty. It’s not risky to buy securities at a fraction of what they’re worth.”
6. “If a business does well, the stock eventually follows.”
7. “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”
8. “Time is the friend of the wonderful company, the enemy of the mediocre.”
9. “For some reason people take their cues from price action rather than from values. Price is what you pay. Value is what you get.”
10. “In the short run, the market is a voting machine. In the long run, it’s a weighing machine.”
11. “The most common cause of low prices is pessimism. We want to do business in such an environment, not because we like pessimism, but because we like the prices it produces. It’s optimism that is the enemy of the rational buyer. None of this means, however, that a business or stock is an intelligent purchase simply because it is unpopular; a contrarian approach is just as foolish as a follow-the-crowd strategy. What’s required is thinking rather than polling.”
12. “Risk comes from not knowing what you’re doing.”
13. “It is better to be approximately right than precisely wrong.”
14. “All there is to investing is picking good stocks at good times and staying with them as long as they remain good companies.”
15. “Wide diversification is only required when investors do not understand what they are doing.”
16. “You do things when the opportunities come along. I have had periods in my life when I have had a bundle of ideas come along, and I’ve had long dry spells. If I get an idea next week, I’ll do something. If not, I won’t do a damn thing.”
17. “[On the dot-com bubble:] What we learn from history is that people don’t learn from history.”
18. “You are neither right nor wrong because the crowd disagrees with you. You are right because your data and reasoning are right.”
19. “You don’t need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beats the guy with 130 IQ.”
20. “You should invest in a business that even a fool can run, because someday a fool will.”
21. “When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact.”
22. “The best business returns are usually achieved by companies that are doing something quite similar today to what they were doing five or ten years ago.”
23. “Diversification may preserve wealth, but concentration builds wealth.”

If you would like to learn about a stock investment approach that that uses similar strategies as those reflected in this article, please consider purchasing Sensible Stock Investing: How to Pick, Value, and Manage Stocks. The book has a perfect 5-star reader rating on Amazon.com. Click on this link to learn more about the book and its systematic, user-friendly approach to investing, designed specifically for the individual investor: http://www.SensibleStocks.com

Article Source: http://EzineArticles.com/?expert=David_Van_Knapp
http://EzineArticles.com/?The-Investment-Philosophy-of-Warren-Buffett—In-23-Quotes&id=528157

Popularity: 4% [?]

Tomorrow I’ll be on holiday, so there will be no posts on this weblog the next few weeks. When I’m back I will continue to bringing you “profiles and stories on the world’s most fortunate ones,” as our tagline says.

In the meantime I would like to hear from you, readers, what you expect from this blog and where you’d like to get to know more about. So, ideas and such are very welcome in the comments.

Finally, here are some links that may interest you, so you won’t get bored:

• The Wikipedia article on Berkshire Hathaway is very extensive and useful. It covers most of the company’s histories and properties.
• Warren Buffett’s infamous Letter to Shareholders give a good insight in how the man thinks and how his amazing company is run. (Thanks for the tip, Arkad!)
• Mashable has a nice list with the 10 richest people in technology.
• The New York Times has a list named ‘The Wealthiest Americans Ever,’ listing them in order of wealth relative to the economy of their time. John D. Rockefeller (Standard Oil) is on top.

P.S. If you’re afraid to forget this blog, subscribe to our RSS feed or via email (check the sidebar at the right!).

Popularity: 3% [?]

Hillary Clinton sits down with the Oracle of Omaha for her presidential campaign. Buffett tells her he relatively pays less tax than the other people in his office, who obviously earn less. Here’s the video:

Popularity: 4% [?]

Bill Gates’ top position in the Forbes 500 is no longer valid. A Mexican monopolist has overtaken his position by $8 billion.

Carlos Slim Helú, of Lebanese descent, started buying businesses with his childhood savings and investment returns when he was 26. He then started Grupo Carso, a real estate and construction company.

The successful company was able to acquire a business printing labels for the tobacco industry. Oddly enough, this company took a majority share in one of its customers, Cigatam, a few years later.

Under bad economic circumstances, Slim bought lots of businesses at bargain prices, adding them to Grupo Carso. That holding company is now worth over $19 billion.

His biggest purchase was also his most controversial. He bought 51% of the telecom company Telmex in an auction when it was privatized. Carlos Slim Helú was accused of having insider information, possibly from the befriended president himself.

Because Telmex was granted a 7 year monopoly, Slim charged his Mexican customers the highest rate in the world. After the guaranteed monopoly, the company, now named América Móvil, still has a 90% market share, but with much lower rates.

Carlos Slim Helú, worth $67.8 billion, is rather disliked in his home country. Forty percent of Mexicans live below the poverty threshold, and they don’t believe that Slim could have earned his fortune fairly in the developing country.

Yet, Slim Helu attempts to earn a better reputation in Mexico. He has promised to match donations to various charities 1:1 and, according to Forbes, he has given 150,750 college scholarships, 10 million pairs of contact lenses and 66 million bicycles to the poor.

Popularity: 7% [?]

In terms of money, the most successful investor is without doubt Warren Buffett. Worth an estimated $52.4 billion, he ranks third in the list of the world’s richest people, after the Mexican multimonopolist Carlos Slim Helú and his good friend Bill Gates, founder of Microsoft.

Buffett bought his first share aged 11, with moderate success. He discovered passive income when he and a friend started buying and installing pinball machines. With the returns from this early enterprise he bought a piece of farmland to rent to farmers.

Aged 20, Warren Buffett went to Columbia Business School to receive class from Benjamin Graham, whose book The Intelligent Investor is the basis for Buffett’s investing strategy. Some time after graduating, he was offered a job at Grahams’ partnership. Two years later this partnership was closed.

Warren Buffett then started Buffett Associates, Ltd. After he closed this partnership 11 years later, it had earned an astonishing return of 2610.6%. Some years before, Buffett Associates had focused its attention on a textile company named Berkshire Hathaway. Buffett remained involved in the company and eventually became its CEO.

Berkshire Hathaway transformed into a holding company and started acquiring businesses that were managed well and had a ‘moat’, a big competitive advantage. Even today, all companies acquired need be understandable by even a fool, thus they are often in insurance, retail, media or production. Buffett said that although it is a great company, he would never buy an interest in Microsoft because he can’t predict where it will be 10 years from now.

Buffett now is a multibillionaire, but he still lives in a $700,000 house he bought half a century ago in Omaha, Nebraska. His CEO salary is just $100,000 but he has a corporate jet he calls “The Indefensible”.

Opposed to heritage, Warren Buffett has promised to donate  his Berkshire stock to the Bill & Melinda Gates Foundation.

Popularity: 100% [?]