If Warren Buffett started today

[Glen48]

Was looking a Buffet and how a lot of his investment are tanking one is BYD elect, cars in China so I was wondering if he started to day would he end up as big as he is now , in the 40 50's etc nothing could go wrong shares in GE GM AT& T all gold.
He seems to be out of his depth with Gold and backing the Feds and no idea depression is coming.

 

[NewTrade]

Re: IF WARREN BUFFET STARTED TODAY

I understand what you mean. In a time of growth, and emerging companies in the private sector providing necessity - it is hard to imagine one would make such copious sums of currency. But that is not to say there are no risks.

Buffet is a long term investor, to my knowledge. If Buffet were perhaps young, but posessed the knowledge he has now, I am rather sure than by his latter years, he wil have made some very wise choices.

There was no such time in the history of investing that there was zero risk. One only needs to look at the great depression as an example; as extreme an example it may be.

 

[Tysonboss1]

The frame work of investing he learned from ben Graham is timeless, sound investment principles don't really change over the decades.

Of course buffet is working with such huge sums now he is not going to get 25%+ per year as he did back in the day, but he is still beating the index's consistently by a healthy margin.

In regards your view that all investments seemed to be gold back them that is just plain wrong, it's like saying the last decade is all cheese and biscuits because of Bhp, wow and Cba.

 

[skc]

Uncle Warren just bought $10B shares in Bank of American...

Despite BAC saying for weeks that they don't need additional capital.

 

[NewTrade]

Re: IF WARREN BUFFET STARTED TODAY

I understand what you mean. In a time of growth, and emerging companies in the private sector providing necessity - it is hard to imagine one would make such copious sums of currency. But that is not to say there are no risks.

I meant Wouldn't*

 

[Wysiwyg]

I doubt a textile manufacturer would be anything extraordinary nowadays. Must not have been much competition back in the 60's.

 

[Tysonboss1]

I doubt a textile manufacturer would be anything extraordinary nowadays. Must not have been much competition back in the 60's.

The competition was huge, Buffet says Berkshire Hathaway textiles was the Biggest investment mistake he ever made.

He struggled with it for 19years before he shut it down.

 

[Glen48]

After the war USA had refined mass production and car makers etc were away no restrictions, rules and reg's to hinder then. No emission rules. service men wanting homes Tv etc etc.. So if you had money and time the market was a good place to be.

Now WB has put 5B into BOA and I was lead to believe BOA is on the verge and just received .5 B bailout again.

Imagine if WB had invested in Gold or maybe he is keen to prop up the pres OB.
Plus most of WB deals with the banks he has a the edge . money and he can dictate the terms.

 

[Tysonboss1]

After the war USA had refined mass production and car makers etc were away no restrictions, rules and reg's to hinder then. No emission rules. service men wanting homes Tv etc etc.. So if you had money and time the market was a good place to be.

Now WB has put 5B into BOA and I was lead to believe BOA is on the verge and just received .5 B bailout again.

Imagine if WB had invested in Gold or maybe he is keen to prop up the pres OB.
Plus most of WB deals with the banks he has a the edge . money and he can dictate the terms.

WB would never buy gold, especially when it is hitting highs and everything else is on sale.

He has never been a trend follower, he buys value, even against the trend.

here is what he thinks of gold.

.

 

[MrMomentum]

I’ve often wondered if Buffet started today if he would mainly look for low price stocks (e.g under say $5).

I know that he looks for companies that are undervalued (amongst many other things), but if he were starting in today’s market I wonder if lower price stocks with price leverage would be where he would focus his attention.

 

[Tysonboss1]

Now WB has put 5B into BOA and I was lead to believe BOA is on the verge and just received .5 B bailout again.

I don't know the details of the BOA deal. But I know WB just recently got paid back the $5B by Goldman sachs, he still holds the warrents from that deal.

He was disappointed when GS said they were paying him back because he was earning $15 / second interest on the money. Maybe he has found another similar home for the 5B.

 

[Tysonboss1]

I’ve often wondered if Buffet started today if he would mainly look for low price stocks (e.g under say $5).

I know that he looks for companies that are undervalued (amongst many other things), but if he were starting in today’s market I wonder if lower price stocks with price leverage would be where he would focus his attention.

He has said he doesn't look at the price of the share until he has valued the business.

eg, he works out what a resonable person would be prepared to pay for the whole company, divides that figure by the number of outstanding shares, and if that number is higher than the current share price he may buy it.

 

[craft]

WB would never buy gold, especially when it is hitting highs and everything else is on sale.

He has never been a trend follower, he buys value, even against the trend.

here is what he thinks of gold.

Tysonboss1

Any chance of a dedicated thread for these Buffet insight video's you keep finding? or does one already exist?

Cheers

 

[MrMomentum]

He has said he doesn't look at the price of the share until he has valued the business.

eg, he works out what a resonable person would be prepared to pay for the whole company, divides that figure by the number of outstanding shares, and if that number is higher than the current share price he may buy it.

Hi Tysonboss1,

Any thoughts on how he works out the price a reasonable person would pay?

 

[Tysonboss1]

Hi Tysonboss1,

Any thoughts on how he works out the price a reasonable person would pay?

The concept is simple, But it's application takes alot of knowledge, experiance and effort.

He learned the concept through Ben Grahams book " the intelligent investor", He was so inspired by ben he traveled to columbia university to study under ben, and later worked for Ben's Hedge fund, before starting his own in 1960.

Basically you make an assessment of the earning power of the company or asset, ie. how much cash is it going to generate each year in profits, and then based on that figure you work out how much you are willing to pay for the asset, Some other considerations would have an effect on whether you would be prepared to pay more of less though.

If you want to learn more I would suggest reading Ben Grahams Intelligent investor and security analysis.

 

[banco]

I've seen some suggestions that the markets are more efficent now than when Buffett was making the big returns but Michael Burry (who's is mostly famous for his bets on US housing) was a value investor who had very good returns in the past 10 years.

 

[Tysonboss1]

I've seen some suggestions that the markets are more efficent now than when Buffett was making the big returns but Michael Burry (who's is mostly famous for his bets on US housing) was a value investor who had very good returns in the past 10 years.

Well buffett is still out performing the market,

I would suggest with all the hyperactive trading, stop losses, margin loans etc.etc the market is less efficent.

Hasn't the last 5 years prooved this, I mean in the last 5 years at what point was the price of Bhp efficent was it when it was

$25 in in 2006 or
$50 in 2007 or 6 months later at
$20 or one year later at
$37 or a year later at $49
or now at $38.

The very fact that a large majority of people ignore value investing and instead use TA or trend following means that the market will not be efficent.

Also with most people prefering to trade and constantly swinging between cash and stocks, and dumping stocks at the first sign of trouble it means the high and lows will always be out of proportion with the true value.

 

[Tysonboss1]

Imagine if WB had invested in Gold.

We would never have heard of him, If he took his $10,000 starting capital in the 50's and held it in gold all this time he would not be even a millionaire, let alone a billionaire in the top three richest.

Instead he took his $10,000 and bought income producing assets and is now worth $40,000,000,000.



This reminds me of a saying, "Time is the friend of the good investment and the enemy of a bad one"

By Buying income producing assets that throw off income he could reallocate into other investments his system produced massive compounded returns.

This is why to this day he doesn't buy gold, No conspiracy theory needed, it's just gold doesn't throw off income.

 

[NewTrade]

What you are saying makes a heck of a lot of sense Tyson. Quite enlightening.

 

[davede]

Good stuff Tyson!

Love the Buffet videos. Especially his quote on gold

"I don't do anything. I just stand here and look pretty."

love it.

I think we can all agree Buffet is a value investor. He invests in predominantly companies.

That being said he is one of many extremely successful and intelligent investors who don't necessarily limit themselves to one particular asset class; Soros and Tudor Jones being two of my favourites.

The market certainly values his pickings though. B of A shares went up 22% after he announced his US$5 bn purchase of preference shares in the company.

However a lot of commentators have been quick to point out what happened to Goldman's share price after he bought in late 2008.

On the subject of different investment periods. It is worth noting that that 69 to 82 was one of the longest secular bear markets in history. Holding the index would have netted you (post inflation) almost nothing. So to succeed during such a period demonstrates remarkable finesse.