> Warren Buffett Blog: 2015

Monday, December 28, 2015

Top Warren Buffett quotes for December 2015

1. "I've seen more people fail because of liquor and leverage -- leverage being borrowed money. You really don't need leverage in this world much. If you're smart, you're going to make a lot of money without borrowing."

2. "Nothing sedates rationality like large doses of effortless money."


3. "I don't look to jump over seven-foot bars; I look around for one-foot bars that I can step over."


Monday, December 21, 2015

Warren Buffett buys into Seritage Growth Properties

Warren Buffett just bought 2 million shares of a company called Seritage Growth Properties (SRG). That works out to an 8% stake and makes him Seritage's second-largest shareholder.

Shares of Seritage surged 17% on the news. Seritage is a real estate investment company that was spun off by struggling retailer Sears (SHLD) earlier this year.

Seritage owns 262 retail locations. Most of them are Sears or Kmart stores. (Sears also owns Kmart.) Seritage then leases the properties back to the Sears and Kmart stores.

The company has a joint venture with shopping mall owners Simon Property Group (SPG), General Growth Properties (GGP) and Macerich (MAC) as well. 

Legally, Seritage is set up as a real estate investment trust, which means it by law has to pay at least 90% of its taxable earnings back to shareholders. The company said last month when it reported earnings that it expected to declare a dividend by the end of the year.

Berkshire Hathaway famously does not pay a dividend.

But it's no secret that Buffett likes receiving them from his many investments. Berkshire Hathaway has often bought preferred stakes in companies -- investments that usually pay higher dividends to their investors than the common stock. 

Buffett may also be making a bet on the U.S. consumer -- although not necessarily Sears and Kmart shoppers. Seritage said last month that 22% of its revenue came from third-party tenants -- i.e. not Sears or Kmart.

That group includes Walmart (WMT), Dick's Sporting Goods (DKS), Nordstrom Rack (JWN) and Lands' End. 


Wednesday, December 16, 2015

Give back to the less fortunate

If you're in the luckiest 1 percent of humanity, you owe it to the rest of humanity to think about the other 99 percent.

Wednesday, December 9, 2015

Your biggest asset is YOURSELF

Invest in as much of yourself as you can. You are your own biggest asset by far. Anything you do to improve your own talents and make yourself more valuable will get paid off in terms of appropriate real purchasing power.

Anything you invest in yourself, you get back ten-fold. Nobody can tax it away; they can't steal it from you.

Wednesday, December 2, 2015

Buffett said to be ready to appear with Hillary Clinton for campaign

Warren Buffett has long been a fan of Democratic presidential front-runner Hillary Clinton. Now the Oracle of Omaha is preparing to appear with her in Omaha, Nebraska.

Buffett will appear with Clinton at a campaign stop in Nebraska this month, a source close to the Clinton campaign confirmed to CNN. 

The event, to be held on December 16, will be Clinton's first campaign stop in Omaha before the Nebraska Caucus on March 5.

According to the source, Buffett and Clinton are expected to talk about income inequality and the need for tax reform. 


Monday, November 23, 2015

Passion for work more important than pay

There comes a time when you ought to start doing what you want. Take a job that you love. You will jump out of bed in the morning. 

When I first got out of Columbia Business School, I wanted to go to work for Graham immediately for nothing. He thought I was over-priced. But I kept pestering him. I sold securities for three years and I kept writing him and finally I went to work for him for a couple of years. It was a great experience. But I always worked in a job that I loved doing. You really should take a job that if you were independently wealthy that would be the job you would take. You will learn something, you will be excited about, and you will jump out of bed. You can't miss. You may try something else later on, but you will get way more out of it and I don’t care what the starting salary is.

When you get out of here take a job you love, not a job you think will look good on your resume. You ought to find something you like.

Wednesday, November 18, 2015

Dont work a job just because it looks impressive on your Resume

I get to work in a job that I love, but I have always worked at a job that I loved. I loved it just as much when I thought it was a big deal to make $1,000. I urge you to work in jobs that you love. I think you are out of your mind if you keep taking jobs that you don't like because you think it will look good on your resume. 

I was with a fellow at Harvard the other day who was taking me over to talk. He was 28 and he was telling me all that he had done in life, which was terrific. 

And then I said, "What will you do next?" "Well," he said, "Maybe after I get my MBA I will go to work for a consulting firm because it will look good on my resume." 

I said, "Look, you are 28 and you have been doing all these things, you have a resume 10 times than anybody I have ever seen. Isn't that a little like saving up s-e-x  for your old age?"

Monday, November 16, 2015

Warren Buffett invests in Texas real estate company

Billionaire Warren Buffett is getting in on the Dallas real estate market. HomeServices of America which is an affiliate of Bershire Hathaway has purchased Dallas, Texas based firm - Allie Beth Allman & Associates.

The real estate company specializes in luxury properties with $1.5 billion in sales last year. "Allie Beth Allman & Associates is a strong company with an exceptional reputation in a growth market," said Ron Peltier, HomeServices' chairman and CEO. "This transaction aligns with our vision of acquiring distinguished companies in leading markets that share our core values."

Allie Beth Allman & Associates was founded in 2003 and is recognized as the "highest-grossing, single office residential real estate firm in Dallas," according to a press release.

Wednesday, November 4, 2015

Shocking reason why Warren Buffett's son avoids donating to charities

Howard Buffett (Eldest son of Warren Buffett): We try to avoid charity, if we can. We think of what we do as an investment. If you look at what we’re doing in Democratic Republic of the Congo, where we’re building three hydroelectric plants, that’s an investment. People will have electricity in their homes, businesses will be built, and farmers will thrive. That’s what our approach accomplishes.

Why avoid charity?

Charity doesn’t solve a long-term problem. It addresses an immediate situation, but it won’t solve anything. For me, charity comes into play when there’s not a good opportunity to make an investment, but you still feel there’s something you should do—you’re compelled to do it. In the world’s poorest places, there are limited resources, limited infrastructure, and limited governance. Together, that can create a very difficult environment. So sometimes you can’t do it purely one way or the other and, instead, you end up doing both.

Wednesday, October 28, 2015

Google Alphabet copying Berkshire Hathaway model

Google's recent announcement of a change in corporate structure with the release of "Alphabet" is explained in a simple concept - Alphabet is the farm, and Google is its most successful crop.

Rather than nurturing the Google brand and using its substantial ad revenue to support various cash-bleeding projects, Alphabet will look for each subsidiary to support itself instead of just living off Google.

“Alphabet is an attempt to build a holding company like Berkshire Hathawayout of an existing operating company,” Alphabet CEO Eric Schmidt said, according to one report. “It’s never been done before. We’re trying to push the Alphabet companies to be separate companies, not divisions.|

 Schmidt pointed to the person in charge of self-driving car initiatives, who will become the CEO of that business “and bear the downside and the upside” that comes with it.

This is just like how Warren Buffett runs Berkshire, giving complete autonomy to subsidiaries including Geico, Dairy Queen and Heinz. After how in the world could one person run and fully understand all those disparate businesses?

The heart of Buffett’s investing strategy and Berkshire’s management structure is a long-term value proposition and not quarter-to-quarter shenanigans or interoffice politics. If Google truly embraces this mindset, it could be a very powerful way to both foster innovation and also demand greater accountability from individual pet projects which currently aren’t standing on their own feet.

Of course, don’t think GOOG stock is going to be throwing its own shareholder meetings with the same flair as Buffett with his “Woodstock for Capitalists” in Omaha. For starters, Alphabet is still incredibly reliant on Google ad sales right now and will be for the forseeable future regardless of this posturing. Furthermore, Alphabet Inc. still has a dual stock structure that consolidates power in the hands of a brain trust that includes Schmidt, Larry Page and Sergey Brin. This trio can (and will) continue calling most of the shots for the near-term.

But if you are a long-term investor who believes in the ultimate promise of innovation at Alphabet and GOOG stock, you should be encouraged by the fact that Warren Buffett is the role model Schmidt is aspiring to, and that Berkshire Hathaway is the archetype for the kind of company he wants GOOGL to become.

Monday, October 26, 2015

Wake Forest MBA students meet Warren Buffett


Warren Buffett met with a selected group of Wake Forest University students for a Q&A session.

Buffett emphasized the U.S. must invest in higher education and assure a means to finance that education to ensure a qualified labor force. He referred to innovative ideas in student loans, such as Purdue University’s plan to accept 10 percent of a graduate’s income for 12 years as full payment of their student loan obligation.

What does Buffett say leads to success? Focus and passion. He suggests that mastering both oral and written communication skills are vital. He talked about the importance of honor, integrity, and energy and used his performance as interim chairman at Salomon Brothers as an example of how honesty and integrity prevented a criminal indictment of that firm in 1991.

He advised professional investors to start young, build an audited record, do their work for the fun of it, and base fees on management instead of performance. He advised us to avoid “liquor, ladies, and leverage” as he had found this to be the cause of most ethical and legal problems friends and colleagues had faced over the years. He advised avoidance of risk but also pointed out that if you are following your passion you are already minimizing risk.

Throughout our discussion with Buffett there was a common theme of gratitude for his opportunities and experiences. He spoke of his parents and the influence his father had on his life, relaying he felt the greatest job one could have was being a teacher for your child. His decision to marry his first wife Susie provided stability and direction as she put him together and kept him together. His decision to work with Bill Gates in initiating and promoting the “Giving Pledge” was what he felt would be his greatest contribution to society. I

Warren Buffett also felt many of our greatest advancements would be in healthcare, and in particular in research concerning the brain. He warned the threat of chemical, biological, and nuclear attack was very real. He advocated for the refinement and adoption of renewable and sustainable energy and for government’s active role in that process. He spoke of the necessity of diversity in the workforce and utilization of all individuals’ talents and assets regardless of age, race, or gender.


Monday, October 5, 2015

Wells Fargo stock may be a decent buy

Berkshire Hathaway’s biggest single holding as of June 30, Wells Fargo has a reputation for being one of the most conservatively managed of the biggest U.S. banks, plus it offers a generous 3% dividend yield. The stock recently fell from July highs above $58 to $50 on August 25, and now appears to be retesting that low. The next level of support would be last October’s low of $47.85.

Thursday, October 1, 2015

Warren Buffett making mind blowing money daily


In 2013, Warren Buffett made on average $37 million per DAY — that's more than what Jennifer Lawrence made the entire year.

According to Forbes, Jennifer Lawrence was the second-highest-paid actress in 2013, and she is estimated to have made $34 million that year.

Warren Buffett made $37 million per day in 2013.


Wednesday, September 30, 2015

Try and dont give up easily

When Warren Buffett was first getting started in his career as a young man, he originally wanted to work with his idol, and author of "The Intelligent Investor," Benjamin Graham, but Graham rejected him because he wasn't Jewish.

But Warren Buffett wouldn't take no for an answer, and continued pitching Graham ideas until he eventually hired him.

Monday, September 28, 2015

Resist borrowing money when investing unless you know what you are doing

Over the past 50-60 years, Charlie and I have never permanently lost more than 2% of our personal worth on a position. We've suffered quotational loss, 50% movements. That's why you should never borrow money. We don't want to get into situations where anyone can pull the rug out from under our feet. 

Thursday, September 24, 2015

Diversification vs Stock Picking | Warren Buffett

If it's your game, diversification doesn't make sense. It's crazy to put money into your 20th choice rather than your first choice. 

'Lebron James analogy.' 

If you have Lebron James on your team, don't take him out of the game just to make room for someone else. If you have a harem of 40 women, you never really get to know any of them well.

Concentrate your assets if you know what you are doing

Charlie and I operated mostly with five positions. If I were running 50, 100, 200 million, I would have 80% in 5 positions, with 25% for the largest. In 1964 I found a position I was willing to go heavier into, up to 40%. I told investors they could pull their money out. None did. The position was American Express after the Salad Oil Scandal. In 1951 I put the bulk of my net worth into GEICO. Later in 1998, LTCM was in trouble. With the spread between the on-the-run versus off-the-run 30-year Treasury bonds, I would have been willing to put 75% of my portfolio into it. There were various times I would have gone up to 75%, even in the past few years. If it's your game and you really know your business, you can load up. 

Wednesday, September 23, 2015

Simplicity, low cost and strength to stop attacks from competitors will bring success

I don’t want a business that’s easy for competitors. If you’ve got a wonderful castle, there are people out there who are going to try and attack it, and take it away from you. And I want a castle that I can understand, but I want a castle with a moat around it. I want a business with a moat around it. I want a very valuable castle in the middle. And then I want…the Duke who’s in charge of that castle to be honest and hard working and able. And then I want a big moat around the castle, and that moat can be various things.

The moat in a business like our auto insurance business at GEICO is low cost. I mean people have to buy auto insurance, so everybody’s going to have one auto insurance policy per car basically, or per driver. And…I can’t sell them twenty…but they have to buy one. What are they going to buy it on? They’re going to buy it based on service and cost. Most people will assume the service is fairly identical among companies, or close enough, so they’re going to do it on cost, so I gotta be the low cost producer. That’s my moat. To the extent my costs get further lower than the other guy, I’ve thrown a couple of sharks into the moat.

Monday, September 21, 2015

Holding cash to buy

Billionaire investor Warren Buffett has built a cash pile in recent years, with his company Berkshire Hathaway holding a record cash levels of $67 billion, prior to its $37 billion acquisition of US industrial group Precision Castparts last month. 

Wednesday, September 16, 2015

Warren Buffett defends Hillary's and her email controversy


It [Hillary Clinton's use of personal email as Secretary of State] hasn’t been handled well, but I’ve handled some things badly in my life too. I do not consider that determinative at all of the kind of person she would be as president.

I believe that she has a vision for America that’s very similar to mine, in terms of everybody being included in the prosperity we enjoy.

Monday, September 14, 2015

Investing edge quote from Charlie Munger

“You have to figure out what your own aptitudes are. If you play games where other people have the aptitudes and you don’t, you’re going to lose. And that’s as close to certain as any prediction that you can make. You have to figure out where you’ve got an edge. And you’ve got to play within your own circle of competence.” - Charlie Munger - Warren Buffett's right hand man.

Friday, September 11, 2015

China will continue moving forward and long term buy

Warren Buffett thinks China is a great bet for the long term. Buffett cites World War 1 and 2 and economic downturns America faced in the past as an example of how a country can recover. Buffett believes China will make similar progress. Watch the video for his full views.


Thursday, September 10, 2015

Warren Buffett bullish bets on Aerospace and Titanium

In August 2015, Warren Buffett’s Berkshire Hathaway bought Precision Castparts at a price of $235.00 per share, amounting to nearly $32.5 billion in cash. The details of the transaction are less important than what the billionaire from Omaha’s logic was behind the acquisition. By his own admission, he bought it at a high price—especially considering PCP’s 52-week low was $186.00 a share.

Buffett is clearly bullish on aerospace; and Precision Castparts is a world leader in the manufacturing of highly complex titanium alloys and other metal parts for that sector. Titanium casting is not for everyone. There are but a handful of specialists worldwide; PCP just happens to be the most important one. The company admits that the highly-specialized nature of its products and production processes have acted as a barrier to potential competitors. Not surprisingly, PCP ranks first or second in each of its markets and any would-be challenger would have to face massive investments just to catch up—let alone compete.

Tuesday, September 8, 2015

Warren Buffett investments drop in recent market sell off

Warren Buffett seems to have also been negatively affected by the recent market selloff.

Buffett’s Berkshire Hathaway the insurance company turned investment conglomerate run by the billionaire, appears to have lost $11.2 billion in value from its stock market investments, on paper at least, during the worst of the downturn from mid-July to the end of August. 

That represents a 10.3% drop. The good news for Buffett: His, and his investment team’s, performance was likely not much worse than everyone else’s. During the same time, the S&P 500 fell 10.1%.

Friday, September 4, 2015

Wednesday, September 2, 2015

Warren Buffett has lot of cash to buy more stocks

When the stock market declines, Warren Buffett and Berkshire Hathaway usually get ready to make a ton of money. In 2008, at the nadir of the financial crisis, Buffett invested $5 billion in Goldman Sachs. Three billion dollars went to General Electric a month later.

In August of 2011, Buffett invested in Bank of America. The markets were in a full-on panic over Bank of America's mortgage loan problems. Meanwhile, Buffett calmly stroked a check for $5 billion. In all, Berkshire invested more than $25 billion in deals during the crisis.

By 2013, those investments had already returned $10 billion to Berkshire.The returns are stunning, but they're only possible because Berkshire had the ability to write $25 billion of checks to actually make the investments.

This time around, the company has even more cash at the ready. As of June 30,Berkshire reported cash and equivalents of $66 billion, with free cash flow of $4.6 billion for the quarter.That is just an absurd amount of money, and it sits at the willing and capable hands of perhaps the greatest opportunist of all time, Warren Buffett.

Monday, August 31, 2015

Warren Buffett buys Phillips 66 oil refiner stock

Warren Buffett's Berkshire Hathaway Inc has invested $4.48 billion to acquire 57.98 million shares or roughly 10.8 per cent stake in oil refiner Phillips 66, hoping to gain from current low prices of oil company stocks.

Berkshire is reinvesting in the Houston-based company, after divesting nearly two-thirds of its stake in February 2014 by swapping $1.35 billion shares for a chemicals business acquired by its Lubrizol unit.

Berkshire revealed the acquisition of roughly 10.8 per cent in Phillips 66 in a filing with the US Securities and Exchange Commission. 

Phillips 66's share price has dropped by less than 1 per cent while crude oil prices have fallen by more than half. The company's shares closed at $77.23 on Friday.

Berkshire once held a large stake in the Houston-based company, but shed nearly two-thirds of it in February 2014 when it swapped $1.35 billion of shares for a chemicals business that it folded into its Lubrizol unit.

Crude oil prices have since fallen by more than half, though Phillips 66's share price has dropped by less than 1 percent.

Wednesday, August 26, 2015

Buffett quote on buying at a discount

Long ago, Ben Graham taught me that 'Price is what you pay; value is what you get.' Whether we're talking about socks or stocks, I like buying quality merchandise when it is marked down.

Warren Buffett supports Hillary Clinton for President

Monday, August 24, 2015

We will have recessions from time to time



"In the short term, the market is a popularity contest. In the long term, the market is a weighing machine." - Warren Buffett

Monday, August 17, 2015

Warren Buffett buys Precision Castparts - Interview on Fox Business



According to Warren Buffett, Precision Castparts is a company that makes very Important Parts for very important machines.

Warren Buffett has targeted and acquired his latest elephant – the term he often uses to describe companies that are worth billions of dollars. Buffett’s investment company, Berkshire Hathaway, has announced that it will agree to acquire the metal parts manufacturing company, Precision Castparts Corporation, in a deal valued at $37.2bn (£24bn) including debt.

Wednesday, August 12, 2015

Warren Buffett on being a nice man or nice woman

Be a nice person. It’s so simple that it’s almost too obvious to notice. Look around at the people you like. Isn’t it a logical assumption that if you like traits in other people, then other people would like you if you developed those same traits.

Monday, August 10, 2015

Warren Buffett on Donald Trump chances for Republican nominee

Warren Buffett said today that Donald Trump has a solid base of support in the race for the Republican presidential nomination that seems unshakable by the real estate mogul's over-the-top comments.

Trump will have a block of delegates when the convention arrives, but with the huge field of GOP candidates, it's possible no one will have a majority, Buffett told CNBC's "Squawk Box" in a wide-ranging interview.

"I wouldn't be surprised if [Donald Trump] maintained a quite a solid base for some time," Buffett said—adding that he won't run out of money.


Wednesday, August 5, 2015

More info on BYD the Chinese auto company backed by Warren Buffett

Warren Buffett, Chairman and CEO of Berkshire Hathaway, owns a substantial share of BYD, China’s most successful electric car firm. BYD isn’t anything like Youxai, the copycat that emerged last week. It’s a car firm with its own idea about what an EV should be and who should buy it.
Hybrids still work for BYD

BYD makes most of its sales in China, and its most successful car make a pure EV that compares to the Tesla Motors Model S. Instead the firm makes the Qin, a plugin hybrid that uses its power pack for short trips and relies on petrol for longer journeys.

Tesla Motors had problems selling the Model S in China because of a lack of charging infrastructure. A focus on hybrids, at least in the short term, has allowed BYD to avoid that problem. The firm has sold a total of 31,366 units of the Qin in China through June 2015.

The battery in the Qin is nothing on the Tesla Motors Model S. The power cell comes in at just 13 kWh, five times smaller than the lowest option on the Model S. It can’t compete on power either. The car goes from 0-60 in 5.9 seconds, a lot slower than the 2.8 second charge that Ludicrous mode on the Model S will allow when it arrives in the coming weeks.

Direct comparisons don’t flatter the Qin, but the car’s real power is in its price tag and its appeal to those who live in a country with poor charging systems. The BYD Qin costs around $31,000. A large subsidy from the Chinese government brings that cost down to just $25,400.

The Qin is facing the same market segment as the Tesla Motors Model 3, a car that won’t be released until 2017. Just because it’s a hybrid doesn’t mean that it shouldn’t be taken seriously. The Chinese government regards it as a new-energy vehicle, and Warren Buffett thinks the car is worth backing.

Friday, July 31, 2015

Buffett quote on opportunities

Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble.

Wednesday, July 29, 2015

Seize your moment and make it count

Big opportunities in life have to be seized. 

We don’t do very many things, but when we get the chance to do something that’s right and big, we’ve got to do it. And even to do it in a small scale is just as big a mistake almost as not doing it at all. You’ve really got to grab them when they come, because you’re not going to get 500 great opportunities.

Monday, July 27, 2015

Greg Abel could be next CEO of Berkshire Hathaway

Warren Buffett is likely to appoint Greg Abel to be the chief executive of his multinational conglomerate holding company Berkshire Hathaway according to Barrons Magazine.

Abel, the 53-year-old head of Berkshire Hathaway Energy, has a greater chance than 64-year-old Ajit Jain who runs Berkshire's reinsurance business, with his age and experience.

Abel has been the CEO of the group of electric utilities and two natural gas pipelines since Buffett bought it in 2000. Both Abel and Jain were singled out in the annual letter by Berkshire vice chairman Charlie Munger.
Barron's also reported Buffett will appoint his son Howard to be Berkshire's non-executive chairman.

Friday, July 24, 2015

Friend with people better than yourself says Warren Buffett

It’s better to hang out with people better than you. Pick out associates whose behavior is better than yours and you’ll drift in that direction.

Wednesday, July 22, 2015

Warren Buffett on value of life and mind

In Warren Buffett's biography “The Snowball: Warren Buffett and the Business of Life,” describes an incident where Buffett asked students to imagine if a genie came to him at age 16 and offered the car of his dreams. But the catch was that it would also be the last car Buffett could ever own. The car would have to last a lifetime, and to make sure that happened, he said, “I would read the manual about five times. I would always keep it garaged. If there was the least little dent or scratch, I’d have it fixed right away because I wouldn’t want it rusting. I would baby that car, because it would have to last a lifetime.”

Then Buffett related the fable back to the students: “That’s exactly the position you are in concerning your mind and body. You only get one mind and one body. And it’s got to last a lifetime. Now, it’s very easy to let them ride for many years. But if you don’t take care of that mind and that body, they’ll be a wreck 40 years later, just like the car would be.

“It’s what you do right now, today, that determines how your mind and body will operate 10, 20, and 30 years from now.”

Monday, July 20, 2015

Warren Buffett did not buy Greek island

Warren Buffett didn’t buy a Greek island, not for 15 million euros or any other price.

His office said Monday that reports from Greece that Buffett and Italian real estate agent Alessandro Proto together purchased the island of St. Thomas, southwest of Athens, are incorrect.

The newspaper Proto Thema reported the sale, and various news agencies repeated it, including the Athens-Macedonian News Agency and a Newsweek website.

The story said several uninhabited Greek islands are for sale, and St. Thomas would be suitable for building a resort or for some other private use. Greece’s financial problems supposedly are creating real estate bargains.

Stories quoted Proto’s company, Proto Enterprises, as saying that Buffett and Proto acquired the island, in the Saronic Gulf near the port of Piraeus, on Thursday. It’s a 45-minute ferry ride from Athens.

Asked by The World-Herald if the report was correct, Buffett’s office in Omaha said, "No."

Wednesday, July 15, 2015

Warren Buffett sells his old car for 20 times the book value



The 2006 Cadillac with only 20,000 miles on the odometer, was buzzing through Illinois, USA on the way from Omaha to New York City, with no license plates.

An Illinois police officer spotted it and pulled it over.

“I know we’re driving without plates, but this is the story,” the driver explained. He had bought the car from Warren Buffett for $122,500 in a charity auction and had just picked it up in Omaha. He showed the bill of sale and the title, transferred from Buffett to him, and Buffett’s signature on the dashboard.

“It was too late to get temporary plates,” the car buyer told me in a telephone interview. He spoke on the condition that he not be identified. “So we just drove it back to New York.”

The officer called for backup. Soon two policemen approached the formerly Buffett-owned Cadillac.

“Did you actually get to meet Mr. Buffett?” one asked, according to the buyer’s recollection.

“Yes, he was very generous with his time,” the driver said. “He spent over an hour with us at his office.”

“Does Warren think the economy’s going to be OK?” the officer asked.

“Yes, he seems to think things are going OK.”

The two officers smiled and nodded.

“OK, we’ll give you a warning, and thank you very much.”

It was a pleasant finale to a trip that “exceeded our wildest expectations,” said the mystery car buyer, a New York City money manager who built his career by following Buffett’s investment ideas.

Buffett had bought a new Cadillac and donated his old one to Girls Inc., a program for young women, for an online auction in March, promising to hand over the keys to the buyer in person.

The money manager didn’t need the car but wanted to meet Buffett and thank him for his investment philosophy, his philanthropy and his emphasis on ethical business practices. He has attended Berkshire Hathaway Inc. shareholder meetings for nearly 25 years, sometimes with his sons, ages 19 and 22.

This time, he brought his wife, his sons and his mother along for the late-afternoon appointment with Buffett, chairman and chief executive of Berkshire.

Buffett gave them a tour of company headquarters and then invited them into his corner office.

“He talked with my sons about choosing a career and how important long-term friendships are,” the man said. “We didn’t talk a lot about investments per se. We talked about the importance of having a positive outlook and enjoying what you’re doing.”

Inside the office, “the phone never rang the whole time we were there. He was never interrupted. I said, ‘Is it always this quiet?’ And he said, ‘Basically, yes.’ ”

Buffett took them downstairs to hand over the keys. The man started up the Cadillac and saw that the gas gauge was down one-quarter.

“Warren, for $122,500 I do expect a full tank of gas,” he said. They all laughed.

Tuesday, July 14, 2015

Cuba to import BYD autos of Warren Buffett

Chinese auto and battery company BYD Ltd. said Cuba plans to buy 719 of its vehicles for tourists to rent, once the rush begins as the United States re-establishes diplomatic relations.

BYD, partly owned by Berkshire, says its sedans and SUVs will make up Cuba’s largest auto rental fleet. The country’s streets are known for their vintage American autos, preserved since the 1953-1959 revolution that resulted in a Communist government.

BYD said in a press release that it sent some vehicles to an exposition in Havana last November. The Cuban government also has purchased 40 BYD passenger cars.

“Chinese tourists are flocking to Cuban beaches, leisure resorts and golf courses, and their visits to this old socialist ally are expected to increase even more,” BYD said.

Monday, July 13, 2015

Warren Buffett donates almost $3 billion to charity

Warren Buffett has just donated more than $2.8 billion to charity.

He made the donation by transfering 20.64 million Berkshire Hathaway Class B shares. The announcement was made on the company’s website. Each year in the last few have been stratospheric, including another $2.8 billion in 2014 , and $2.6 billion in 2013. 

As in the past, the major recipients are the Bill and Melinda Gates Foundation, plus foundations set up by Buffett family members, including the Susan Thompson Buffett, Sherwood, Howard G. Buffett and NoVo Foundations. Mr. Buffett has pledged to give away 99% of his wealth, and his lifetime giving now tops $25.5 billion. He and Bill Gates created the Giving Pledge to encourage the world’s wealthiest people to donate a substantial portion of their fortunes to charity.

Wednesday, July 8, 2015

Warren Buffett of Saudi Arabia to donate $32 billion to charity

Saudi Arabia's version of Warren Buffett and billionaire Prince Alwaleed bin Talal, one of the world's richest people, announced that he will donate all of his wealth of $32 billion to charity over the coming years.

The money will go to the Saudi prince's organization called Alwaleed Philanthropies to work in the fields of "intercultural understanding" and supporting communities in need, he said in a statement. Programs will include promoting health, eradicating disease, bringing electricity to remote villages, building orphanages and schools, as well as "empowering women."

"Philanthropy is a personal responsibility, which I embarked upon more than three decades ago and is an intrinsic part of my Islamic faith," he said in the statement, which came during the holy month of Ramadan when Muslims are encouraged to give charity and help the needy.

The prince built his wealth through seed money from his father and smart investments. Kingdom Holding owns stakes in hotels like The Four Seasons, Fairmont and Raffles, as well as companies such as News Corp., Citigroup, Twitter and Apple.

Alwaleed joins other billionaires who have made similar pledges in recent years, such as Warren Buffett, Bill Gates, Mark Zuckerberg and Michael Bloomberg. 

Tuesday, July 7, 2015

Ordinary things can bring extraordinary results


"It is not necessary to do extraordinary things to get extraordinary results." - Warren Buffett

Monday, July 6, 2015

I work in a job I love and you should too


I get to work in a job that I love, but I have always worked at a job that I loved. I loved it just as much when I thought it was a big deal to make $1,000. You really should take a job that if you were independently wealthy that would be the job you would take. You will learn something, you will be excited about, and you will jump out of bed. You can’t miss. When you get out of here take a job you love, not a job you think will look good on your resume. You ought to find something you like.

Tuesday, June 30, 2015

Buffett not optimistic on Reinsurance business

[The Reinsurance industry] will not be as good as it has been in the last 30. It’s a business whose prospects have turned for the worse and there’s not much we can do about it.

Monday, June 29, 2015

Buffett looks for businesses that can grow

When asked what kind of businesses Warren Buffett likes to invest in

“It will be businesses that I think I understand and that understanding will grow over time, as will the value of the business grow over time. And then we will look for businesses that we think have good long-term economics, where we think that the managers and employees are both trustworthy and able and where the money makes sense, and they’re the same criteria we would use in this country as well.”

Thursday, June 25, 2015

Warren Buffett confident in US and Australian economy


I feel very comfortable with both the US and the Australian economy. I have no idea what’s going to happen six months from now in business or the market, but I mean, I would be very happy over a five or 10-year period, which is the way you look at these things, or much longer even, investing in either country.

In both areas you have a respect for capital, the rule of law, you have a market that’s well established, you have able and ethical people.

I know less, obviously, about Australia than of the United States but everything I know about it gives me the reason to have the same kind of forecast for it as I have for the United States.

Wednesday, June 24, 2015

Charlie Munger says to invest big when the right opportunity comes

Experience tends to confirm a long-held notion that being prepared, on a few occasions in a lifetime, to act promptly in scale, in doing some simple and logical thing, will often dramatically improve the financial results of that lifetime. A few major opportunities, clearly recognizable as such, will usually come to one who continuously searches and waits, with a curious mind that loves diagnosis involving multiple variables. And then all that is required is a willingness to bet heavily when the odds are extremely favorable, using resources available as a result of prudence and patience in the past. 

- Charlie Munger (Vice Chairman of Berkshire Hathaway and Warren Buffett's right handman)

Tuesday, June 23, 2015

Warren Buffett invests in Australian company for first time

Last week the world's greatest living investor and third richest person made his first foray into the Australian stock market with a US $390 million stake in Australian insurer IAG.

Shares in the insurance group quickly jumped 4 per cent; the investment was widely hailed as a vote of confidence in IAG and in Australia generally.

Under the deal, IAG is issuing Buffett's investment conglomerate Berkshire Hathaway with $390 million (Australian $500) million worth of shares for a 3.7 per cent stake in the company. Berkshire Hathaway will also receive 20 per cent of IAG's insurance premium revenue and cover a fifth of the insurance customers' claims in exchange for an undisclosed fee.

For Berkshire Hathaway, the deal means a fast track into Asia, where IAG is strong, as well as the premium income.

Buffett has committed to the deal for the next decade, but envisages the investment will be much longer term.

Warren comments after the deal were , 
"I am 84 years old and this is my first investment in an Australian company - I have been very derelict, but it has been worth waiting for. Even though this contract only runs for 10 years, I expect for decades and decades and decades we will both benefit from this"
- Warren Buffett


Monday, June 22, 2015

Quote on difficulties making profit in Airline industry

In 60 years the world-wide airline industry had profit margins of less than 1 percent on average.

"A durable competitive advantage has proven elusive ever since the days of the Wright brothers. Indeed, if a far-sighted capitalist had been present at Kitty Hawk he would have done his successors a favor by shooting Orville down." 
    - Warren Buffett

Friday, June 19, 2015

Do the right things the right way

"You only have to do a very few things right in your life so long as you don't do too many things wrong."

Wednesday, June 17, 2015

Lunch donor joins Berkshire to manage investments

The donor in 2011 Ted Weschler who bought lunch with Buffett for a whopping $2.6 million now helps manage Berkshire Hathaway’s Investment Portfolio, suggesting that lunch with Warren Buffett can pay dividends.

Meeting in July, 2010 for the $2,626,311 dinner, the two men liked each other right away. Buffett learned about Weschler’s investment success and how he achieved it—the ‘how’ being as important to Buffett as the gains themselves.


Tuesday, June 16, 2015

Your friends and network define who you become


"It's better to hang out with people better than you. Pick out associates whose behavior is better than yours and you'll drift in that direction."

Monday, June 15, 2015

Warren Buffett invests in Canadian company Suncor Energy

Warren Buffett with Berkshire staff Tracy Cool
Suncor Energy is now became Berkshire’s biggest oil holding after the company sold all shares in Exxon last year, while increasing its stake in the Calgary-based producer since the second quarter of 2014.

Berkshire owned about 22.3 million shares of Suncor as of the end of the first quarter, up from 13 million at the end of 2013, according to data compiled by Bloomberg. Since the end of 2013, Suncor has declined 4.7 percent.

For Williams, a former Exxon executive who is now the Canadian oil-sands producer’s chief executive officer, Berkshire’s stake in Suncor is a testament to a strategy of cutting costs and investing in its best assets even as the industry confronts a price collapse.

“I’m very proud that Warren has come in so heavily to the stock.” Williams, who’s had “occasional discussions” with the billionaire, said in an interview at Bloomberg’s Calgary bureau on Wednesday. “I’m particularly pleased because I worked for Exxon for 20 years before I came to Suncor, so it’s slightly personal as well.”

Suncor has the highest gross margins among 18 of the world’s largest oil and natural gas producers, four times higher than Exxon’s, data compiled by Bloomberg show. The margins have risen while those of global and Canadian peers declined, according to the data.


Thursday, June 11, 2015

Warren Buffett could win big if Fed raises rates

A rising interest rate environment could benefit Warren Buffett and he is probably hoping the Federal Reserve starts raising interest rates sooner. The famed billionaire investor's investment vehicle, Berkshire Hathaway has 44.8% of its portfolio invested in the financial sector, according to FactSet. 

Financial stocks tend to benefit in a rising rate environment, because they can make more money on the spread between the interest they earn on assets and the interest they pay on liabilities.

Wednesday, June 10, 2015

Warren Buffett oldest CEO in S&P500 companies

It's another list that Warren Buffett can say he tops. At the age of 84, the Berkshire Hathaway chief is the oldest CEO in the S&P 500, according to data provided to CNBC by S&P Capital IQ. 

Tuesday, June 9, 2015

Learning from failures is important


"People succeed in life countless different ways but failures group around a few key themes. As such, you learn more from people's failures than people's successes."

Monday, June 8, 2015

Chinese company pays $2.3 billion for lunch with Warren Buffett

A Chinese gaming company won this year’s charity auction for lunch with Warren Buffett Friday night, displaying a sense of humor with a bid of $2,345,678. The amount was not a record, but was higher than what fans of Mr. Buffett have paid in the past couple of years.

Da Lian Zeus Entertainment Co., an online gaming firm based in Beijing, was the winner of the 16th annual auction, according to a statement from the Glide Foundation, the San Francisco charity that receives the proceeds from the auction each year. 

The bidding was done on behalf of the company rather than individuals. That the winning bid came from China reflects the fact that Buffett and his firm Berkshire Hathaway have been picking up Chinese fans by the droves in recent years. More than 200 Chinese investors attended the Berkshire annual meeting in Omaha last month.

Last years winning bidder was Andy Chua of Singapore who paid $2.16 million to lunch with Mr Buffett

Thursday, June 4, 2015

Charlie Munger says Berkshires success is due to Learning non stop

Warren Buffett has become one hell of a lot better investor since the day I met him, and so have I. If we had been frozen at any given stage, with the knowledge we had, the record would have been much worse than it is. So the game is to keep learning.

Wednesday, June 3, 2015

Buffett automaker BYD to do placement

BYD halted trading on its shares saying it was preparing for a potential private placement.

China Merchants Securities, Guosen Securities and UBS Securities were working on the deal, with other banks joining the deal later, added IFR. Details of the deal are yet to emerge.

The company, which counts Warren Buffett’s Berkshire Hathaway Inc.as a shareholder, joins the rush of Chinese companies tapping the equity market. “It makes perfect sense to go ahead with a share placement now, given the rally in the market”.

To date, the firm has not specified what the funds from the placement will be used for, but issuing shares now allows the company to take advantage of the increase in its share price.

BYD Co. will spend the proceeds from a planned share sale to increase its capacity to manufacture batteries to meet the growth in demand for electric vehicles. The analyst also suggests that the funds will be further financed in research and development and will give the company an edge over its competitor, Tesla.

BYD made the announcement via a posting on a Shenzhen stock exchange affiliated website. The group has laid out its plans to compete with Tesla in the EV market, where its only real advantage right now batteries. Efficient, Lightweight and High energy are considered to be the few vital components to make a successful electric car. They also pledged to deliver more electric buses on the United States market after securing recently a big contract from a mass-transit operator last month. It also plans to start taking orders for electric trucks from overseas buyers in the second half of the year and begin deliveries in 2016, with the U.S. being one of the likely first destinations, the company said.

Tuesday, June 2, 2015

Leverage your strengths for success

"You don’t have to be an expert on everything, but knowing where the perimeter of that circle of what you know and what you don’t know is, and staying inside of it is all important. Tom Watson Sr., who started IBM, said in his book, he said, ‘I’m no genius. But I’m smart in spots, and I stay around those spots.’ And, you know that is the key. So if I understand a few things and stick in that arena, I’ll do OK.”

Monday, June 1, 2015

Your chance to lunch with Warren Buffett

Bidding has opened for a lucky person's chance to chat with Warren Buffett over lunch.

Warren Buffett is auctioning himself so that someone could eat lunch with him. The funds will go to his favourite San Francisco charity, the Glide Foundation, which helps the homeless. Over the last 15 years he has raised $17.9 million for it. The bidding is stuck at $178,100 and 77 bids. 

The most expensive meal ticket was in 2012, when the winner paid a record $3,456,789 to have lunch with Buffett, the founder of Berkshire Hathaway. Last year’s winner paid a mere $2,166,766 for a private audience with Buffett, who recently likened Tesco’s problems to finding cockroaches in the kitchen. He also confessed to spending too long “thumb-sucking” over exiting Tesco, in which he once held almost 5%.

Bidding for the lunch — during which his next investments cannot be discussed  —  ends on Friday.


Some of the previous winners of the bids 

    -2003 David Einhorn, Greenlight Capital – $250,100
    -2004 Jason Choo, Singapore – $202,100
    -2005 Anonymous – $351,100
    -2006 Yongping Duan, California $620,100
    -2007 Mohnish Pabrai, Guy Spier, Harina Kapoor – $650,100
    -2008 Zhao Danyang, China – $2,110,100
    -2009 Salida Capital, Canada – $1,680,300
    -2010 Ted Weschler – $2,626,311
    -2011 Ted Weschler – $2,626,411
    -2012 Anonymous - $3,456,789

Monday, May 25, 2015

Warren Buffett advice to 11 year old inventor

"Meeting Warren Buffett was amazing,” says Matthew Meyer a 11 year old kid who invented Grip Wizard, a fabric strap holding the pinky and ring fingers to the palm, allowing kids to master the tripod grip necessary for holding a pen or pencil.

“Warren Buffett encouraged me to continue on with my idea and said that ‘the best investment is an investment in myself.’ That means doing well in school, learning from your mistakes, believing in yourself and never giving up.”

Thursday, May 21, 2015

Avoiding some mistakes key to success

"We’ve done a lot of stupid things but we’ve avoided a small subset of stupidity and that subset is important. It’s about avoiding the dumb things."

Wednesday, May 20, 2015

A purpose to everything you do

"If the only reason you find for doing something is because others are doing it then that’s not good enough."

Tuesday, May 19, 2015

Warren Buffett confident on IBM future

I think ten years from now they will be earning a fair amount more money than they are now and I think they will have a fair amount fewer shares. Our percentage ownership will be up and I think we'll make considerable money.

Monday, May 18, 2015

Passion in life and work

"Do what you’re passionate about. If you do this, there will be few people competing or running faster than you. "

Warren Buffett on Clayton lending role in helping people

According to Warren Buffett, many of Clayton's lending customers pose higher risk for lending, so therefore charging them higher interest rates was justified.

I make no apologies whatsoever about Clayton's [alleged predatory] lending terms. It's true that manufactured housing hits the lower end of the market. The main question is whether a company can make sensible loans to people so that they can continue making those payments and keep their houses. In that regard, Clayton has been "exemplary".


If we make a mistake, it hurts them and it hurts us, and that is a very unusual arrangement in the financial industry.

Buffett explains the main causes for loan default are - job loss, divorce and death.

That happens with high-priced houses as well. It happens more often with people who are living closer to the edge, but I don't think that's a reason to deny them a house.

Friday, May 15, 2015

Warren Buffett jokes about his diet

In the last 30 years, one quarter of all the calories I’ve consumed have come from Coca-Cola.

Thursday, May 14, 2015

Face your fears to be stronger

"I think I developed courage when I learned I could deal with hardship. You need to get your feet wet and get some failure under your belt." 

Wednesday, May 13, 2015

Wealthy sending their kids to private schools

The wealthy in many cities have opted out of the public school system. Some of them may be involved philanthropically, but with our own kids, we send them to private schools.

Tuesday, May 12, 2015

Berkshire will resist activist shareholders

The market value of Berkshire is going to be so great that, even if all the activists got together, they couldn’t do much about it.

Monday, May 11, 2015

Charlie Munger praises McDonalds role in society

"They [Mc Donalds] take people and give them a first job, which enables them to get a second job. They do a very good job of educating troubled young people to be good citizens and they're probably more successful than charter schools." -Charlie Munger


Thursday, May 7, 2015

Bonds are expensive says Warren Buffett

If I had an easy way, and a non-risk way, of shorting a whole lot of 20- or 30-year bonds, I’d do it. But that’s not my game, and it can’t be done in the kind of quantity that would make sense for us. But I think that bonds are very overvalued, I’ll put it that way.

Wednesday, May 6, 2015

Buffett says he was wrong on inflation

So far, I have been wrong on interest rates. It is so hard for me to believe that you can drop money from a helicopter and not have inflation, but we haven’t.

Monday, May 4, 2015

Could Berkshire qualify as a SIFI

Even as it operates one of the world’s largest insurers, Berkshire is unlikely to be named a SEFI (Systemically important financial institution) according to Warren Buffett. He said regulators haven’t contacted the firm about the tag, which can mean tougher capital, leverage and liquidity requirements.


"There is no reason, in logic or in terms of what we've heard, to think that Berkshire would be designated as a SIFI,” Buffett said. He added that SIFIs tend to get at least 85 percent of revenue from financial operations, and “we don’t come remotely close to that.”

"I do not think Berkshire comes within miles of qualifying as a SIFI."

Thursday, April 30, 2015

BYD car company owned by Warren Buffett wins contract in USA

BYD, the Chinese automaker part-owned by Warren Buffett’s Berkshire Hathaway Inc., projected it will sell as many as 200 electric buses in the U.S. this year after securing its biggest order from a mass-transit operator.

The company won the contract in the U.S. from the Long Beach Transit Authority, which serves portions of the Los Angeles metropolitan area, BYD Senior Vice President Stella Li said in a telephone interview. The authority’s board approved the purchase of an initial 10 electric buses, each costing about $800,000, with options for its partner agencies to buy as many as 50 more, Li said.

The Long Beach deal marks BYD’s biggest order for electric buses outside its home market since the Shenzhen-based company opened a bus factory in California a year ago to push into the U.S., Canadian and Latin American markets. 

The company has sold more than 5,000 of the electric buses globally, with about 50 of its buses in operation in the U.S.

Wednesday, April 29, 2015

Stock market quote on when to sell or buy

"I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful."

Tuesday, April 28, 2015

Buy stocks at a good price instead of over paying


"It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price."


Monday, April 20, 2015

Warren Buffett not surprised by IBM share prices

Folks have this false impression that—when we purchase a stock—we want it to go up. There have been no surprises at IBM considering the fact that we started out buying it a couple many years back. We anticipated earnings to occur down. We anticipated a 12 months like this wherever international trade would get a whack off revenues.


Friday, April 17, 2015

Changes needed in the Euro currency

I've often felt that the present arrangement with the euro would not stand the examination of time in the feeling that it would have to be modified. You harmonized the currency with out harmonizing a complete lot of other issues that have big results on the forex. The Greek predicament could illustrate the sort of adjustments that are needed

Wednesday, April 1, 2015

Buffett says share repurchases will be done if price drops below value

If Berkshire shares are selling below intrinsic business value, massive repurchases will almost certainly be the best choice. You can be comfortable that your directors will make the right decision.

No company will be more shareholder-minded than Berkshire. For more than 30 years, we have annually reaffirmed our Shareholder Principles, always leading off with: “Although our form is corporate, our attitude is partnership.” This covenant with you is etched in stone.

Monday, March 30, 2015

Buffett issues warning for purchases of Berkshire using leverage


Berkshire shares should not be purchased with borrowed money. 

There have been three times since 1965 when our stock has fallen about 50% from its high point. Someday, something close to this kind of drop will happen again, and no one knows when. Berkshire will almost certainly be a satisfactory holding for investors. But it could well be a disastrous choice for speculators employing leverage.

Warren Buffett on importance of learning from failure


"The reason why I’m successful is because I’ve had more failure than anybody else." 

-- Warren Buffett

Wednesday, March 25, 2015

Buffett sees limits of Berkshire in the distant future

The U.S. economy will ebb and flow – though mostly flow – and, when it weakens, so will our current earnings. But we will continue to achieve organic gains, make bolt-on acquisitions and enter new fields.

I believe, therefore, that Berkshire will annually add to its underlying earning power. In some years the gains will be substantial, and at other times they will be minor. Markets, competition, and chance will determine when opportunities come our way. Through it all, Berkshire will keep moving forward, powered by the array of solid businesses we now possess and the new companies we will purchase. In most years, moreover, our country’s economy will provide a strong tailwind for business. We are blessed to have the United States as our home field.

The bad news is that Berkshire’s long-term gains – measured by percentages, not by dollars – cannot be dramatic and will not come close to those achieved in the past 50 years. The numbers have become too big. I think Berkshire will outperform the average American company, but our advantage, if any, won’t be great.

Eventually – probably between ten and twenty years from now – Berkshire’s earnings and capital resources will reach a level that will not allow management to intelligently reinvest all of the company’s earnings. At that time our directors will need to determine whether the best method to distribute the excess earnings is through dividends, share repurchases or both.

Tuesday, March 24, 2015

Berkshire could issue dividends within 10 years

Eventually – probably between ten and twenty years from now – Berkshire’s earnings and capital resources will reach a level that will not allow management to intelligently reinvest all of the company’s earnings. 

At that time our directors will need to determine whether the best method to distribute the excess earnings is through dividends, share repurchases or both. If Berkshire shares are selling below intrinsic business value, massive repurchases will almost certainly be the best choice. You can be comfortable that your directors will make the right decision.”

Thursday, March 19, 2015

Warren Buffett on importance of Cash

At a healthy business, cash is sometimes thought of as something to be minimized – as an unproductive asset that acts as a drag on such markers as return on equity.

    Cash, though, is to a business as oxygen is to an individual: never thought about when it is present, the only thing in mind when it is absent.

American business provided a case study of that in 2008. In September of that year, many long-prosperous companies suddenly wondered whether their checks would bounce in the days ahead. Overnight, their financial oxygen disappeared.

At Berkshire, our “breathing” went uninterrupted. Indeed, in a three-week period spanning late September and early October, we supplied $15.6 billion of fresh money to American businesses. We could do that because we always maintain at least $20 billion – and usually far more – in cash equivalents.

And by that we mean U.S. Treasury bills, not other substitutes for cash that are claimed to deliver liquidity and actually do so, except when it is truly needed. When bills come due, only cash is legal tender. Don’t leave home without it.

Monday, March 16, 2015

Warren Buffett on BNSF and its returns to investors

BNSF disappointed many of its customers. However, our outsized expenditures are beginning to show results.

Dont buy Berkshire shares for short term trading

I believe that the chance of permanent capital loss for patient Berkshire shareholders is as low as can be found among single-company investments. That’s because our per-share intrinsic business value is almost certain to advance over time.

This cheery prediction comes, however, with an important caution: If an investor’s entry point into Berkshire stock is unusually high – at a price, say, approaching double book value, which Berkshire shares have occasionally reached – it may well be many years before the investor can realize a profit.

In other words, a sound investment can morph into a rash speculation if it is bought at an elevated price. Berkshire is not exempt from this truth. Purchases of Berkshire that investors make at a price modestly above the level at which the company would repurchase its shares, however, should produce gains within a reasonable period of time.

Berkshire’s directors will only authorize repurchases at a price they believe to be well below intrinsic value. (In our view, that is an essential criterion for repurchases that is often ignored by other managements.) For those investors who plan to sell within a year or two after their purchase, I can offer no assurances, whatever the entry price.

Movements of the general stock market during such abbreviated periods will likely be far more important in determining your results than the concomitant change in the intrinsic value of your Berkshire shares.

    As Ben Graham said many decades ago: “In the short-term the market is a voting machine; in the long-run it acts as a weighing machine.”

Occasionally, the voting decisions of investors – amateurs and professionals alike – border on lunacy. Since I know of no way to reliably predict market movements, I recommend that you purchase Berkshire shares only if you expect to hold them for at least five years. Those who seek short-term profits should look elsewhere.

Wednesday, March 11, 2015

Warren Buffett says no chance of Berkshire to have financial difficulties

I believe the chance of any event causing Berkshire to experience financial problems is essentially zero. 

We will always be prepared for the thousand-year flood; in fact, if it occurs we will be selling life jackets to the unprepared. Berkshire played an important role as a “first responder” during the 2008-2009 meltdown, and we have since more than doubled the strength of our balance sheet and our earnings potential. 

Bad news travels fast

In the world of business, bad news often surfaces serially: You see a cockroach in your kitchen; as the days go by, you meet his relatives.

Monday, March 9, 2015

Warren Buffett on Acquisitions and Spinoffs on WallStreet

Investment bankers, being paid as they are for action, constantly urge acquirers to pay 20% to 50% premiums over market price for publicly-held businesses. The bankers tell the buyer that the premium is justified for “control value” and for the wonderful things that are going to happen once the acquirer’s CEO takes charge

A few years later, bankers – bearing straight faces – again appear and just as earnestly urge spinning off the earlier acquisition in order to “unlock shareholder value.” Spin-offs, of course, strip the owning company of its purported “control value” without any compensating payment. The bankers explain that the spun-off company will flourish because its management will be more entrepreneurial, having been freed from the smothering bureaucracy of the parent company.


Thursday, March 5, 2015

Character is key for next Berkshire CEO - Warren Buffett

Character is crucial: A Berkshire CEO must be ‘all in’ for the company, not for himself.”

It’s important that neither ego nor avarice motivate him to reach for pay matching his most lavishly-compensated peers, even if his achievements far exceed theirs. A CEO’s behavior has a huge impact on managers down the line: If it’s clear to them that shareholders’ interests are paramount to him, they will, with few exceptions, also embrace that way of thinking.

My successor will need one other particular strength: the ability to fight off the ABCs of business decay, which are arrogance, bureaucracy and complacency. When these corporate cancers metastasize, even the strongest of companies can falter.

Wednesday, March 4, 2015

Diversified long term investment can beat active trading

Investors, of course, can, by their own behavior, make stock ownership highly risky. And many do. 

Active trading, attempts to “time” market movements, inadequate diversification, the payment of high and unnecessary fees to managers and advisers, and the use of borrowed money can destroy the decent returns that a life-long owner of equities would otherwise enjoy.

Tuesday, March 3, 2015

Buffett optimistic on Berkshire long term

A century hence, BNSF and Berkshire Hathaway Energy will still be playing vital roles in our economy. Homes and autos will remain central to the lives of most families. Insurance will continue to be essential for both businesses and individuals. Looking ahead, Charlie and I see a world made to order for Berkshire. We feel fortunate to be entrusted with its management.

Monday, March 2, 2015

Being in USA has lot of advantages

Though we will always invest abroad as well, the mother lode of opportunities runs through America. 

The treasures that have been uncovered up to now are dwarfed by those still untapped. Through dumb luck, Charlie and I were born in the United States, and we are forever grateful for the staggering advantages this accident of birth has given us.

The dynamism embedded in our market economy will continue to work its magic. Gains won’t come in a smooth or uninterrupted manner; they never have. And we will regularly grumble about our government. But, most assuredly, America’s best days lie ahead.