> Warren Buffett Blog: April 2013

Wednesday, April 24, 2013

Warren Buffet's best advice to young kids

Q: If it were possible, what advice would Warren Buffett give to his 10-year-old self ?

A: The same advice we are giving through Secret Millionaires Club. Things like: “The best investment you can make is an investment in yourself; The more you learn, the more you’ll earn;  Find something you like to do, and you’ll never work a day in your life; Great partnerships will make any job easier.

Monday, April 22, 2013

Warren Buffet remoured to buy Suntech

Suntech Power Holdings Co., Ltd. (ADR)(NYSE:STP) shares and volumes have seen a surge due to rumours going around that billionaire investor Warren Buffet has plans to buy the company.

Suntech declared bankruptcy after it was unable to pay $541 million in convertible debt on March 15. However with its factories still operating there is not much clarity on how the bankruptcy proceedings will go on. Suntech was the largest solar panel maker in the world with more than 10,000 employees, but the downturn in the industry has claimed it as one of its victims.

Meanwhile Suntech has received a notice from Nasdaq and will soon be delisted. This means that the stock will not be trading in the US markets for a long time.

Wednesday, April 17, 2013

Warren Buffet: India investing part 2

Berkshire India also expects social media platforms like Facebook and Twitter to play an increasingly crucial role.

“As we progress towards becoming the one-stop shop for insurance, our aim is not just to sell insurance but to help the customer understand the nuances of insurance. It is here that social media plays a major role... We realise that the major attraction of the online mode for a customer is a relatively cheaper pricing,” Balakrishnan said.

Ajit Jain, Berkshire Hathaway’s global head of reinsurance business and often seen as a possible successor to Warren Buffett, also plays an active role in its Indian operations.

“Ajit Jain is a part of the Board of Berkshire India Limited and a regular participant in our discussions and formulations. Being actively involved and well versed with our operations, Jain is both aware and happy of our progress as a Company,” Balakrishnan said.

Asked about life insurance business plans, he said life insurance is a different ball game all together but with adequate research, it expects to introduce life products well-suited for the online medium.

“Products that are both a good value proposition for the customer and viable to sell online,” he said.

“As use of mobile Internet increases, our penetration to the rural and semi-urban areas will grow rapidly given that a large part of our web traffic today stems from mobile devices.

Our rural penetration is expected to closely toe that of the telecom sector,” Balakrishnan said.

Monday, April 15, 2013

Warren Buffet: India investment part 1

With an aim to become a leading online insurance provider, the Indian venture of Warren Buffett-led Berkshire Group is betting big on the popularity of mobile phones and social media to boost its business. Berkshire India sells motor, travel and health insurance products online at on BerkshireInsurance.com and it will soon start selling life insurance products as a corporate agent of Bajaj Allianz Life Insurance.

Having started operations here in 2011 with just eight employees, Berkshire India — a majority owned non-direct subsidiary of US-based Berkshire Hathaway Inc — currently has more than 100 employees and headquartered at Gurgaon near here.

The company uses a unique mode for insurance sales through Internet and expects the growing popularity of Internet-enabled mobile devices, such as smartphones and tablets, to further aid to this cost-effective business model.

”...Over half of India’s total Internet user base will access Internet solely through mobile or tablet devices by 2015. Since our direct model of business employs telephone and Internet, we are positioned to enjoy a great advantage,” BerkshireInsurance.com CEO Arun Balakrishnan told PTI.

“We are confident of our business model and are continually developing it to make it even more efficient and cost effective,” he said.

India is estimated to have the world’s third-largest Internet user base of 120 million people.

Monday, April 1, 2013

Warren Buffet be frugal and spend wise

Warren Buffet lives in a five-bedroom house brought in 1958.

So, does that mean that Warren Buffet is a miser? With over $50 billion in wealth, he still stays in a 55-year-old house that too with "just" five bedrooms. He surely must be bluffing about his wealth, because we know for sure he is not bluffing about the house. Or is he? Well not at all. His known public wealth is $53 billion and growing.

So why does the world's fourth richest man stay in such a small house?

No, Warren Buffet is not stingy or miserly by any means, not anyone who donates $30 billion to charity can be. Rather, he has mastered the art of creating wealth.

Wealth is not created just by investing, but also by avoiding unnecessary expenses. It does not make one stingy; rather, it makes one frugal. This frugality has helped him grow his wealth year on year.

His logic is simple: An extra 10 rooms in the house is not going to create any major difference to him. However, the same money, if invested rightly -- of which he is a master -- can be made to grow to probably 10 times the same amount.

Yes, it is not easy for all of us to be like him. Others might say that he can "afford" to be frugal because he already has so much wealth and does not need to worry about anything else. True, but he has stayed the same way even when he was poor.

If Warren Buffett can do it on such a large scale, we can at least do it on a smaller scale. The secret lies in falling in love with growing wealth. If you can fall in love with the happiness that one gets by seeing wealth grow, you will automatically start repelling the evil twin: spending.

Initially, it may be very difficult and you may not even be able to follow. But once you get accustomed to it, you realize that the pain of sacrificing current consumption is much smaller as compared to the thrill of creating long-term wealth. The Rs. 20,000 saved by going for a simple phone can in the coming years grow into Rs. 200,000 and give you the power to be a giver.

The fundamental is to make sure we give priority to the needs and minimize the wants. Happy frugality.