> Warren Buffett Blog: February 2014

Thursday, February 27, 2014

Dont trade stocks just based on stock pundits

Owners of stocks, however, too often let the capricious and irrational behavior of their fellow owners cause them to behave irrationally. Because there is so much chatter about markets, the economy, interest rates, price behavior of stocks, etc., some investors believe it is important to listen to pundits – and, worse yet, important to consider acting upon their comments.

Wednesday, February 26, 2014

Anyone can invest and earn

You don’t need to be an expert in order to achieve satisfactory investment returns. But if you aren’t, you must recognize your limitations and follow a course certain to work reasonably well. Keep things simple and don’t swing for the fences. When promised quick profits, respond with a quick ‘no.'

Tuesday, February 25, 2014

Liquidity doesnt mean you cannot buy and hold

Those people who can sit quietly for decades when they own a farm or apartment house too often become frenetic when they are exposed to a stream of stock quotations. For these investors, liquidity is transformed from the unqualified benefit it should be to a curse.

Diversify to get decent returns

The goal of the nonprofessional should not be to pick winners. The 'know-nothing' investor who both diversifies and keeps his costs minimal is virtually certain to get satisfactory results. 

Related Stocks/Investment: SPY, DIA

Monday, February 17, 2014

Berkshire to reduce stake in Graham Holdings

According to a Berkshire Hathaway filing Warren Buffett could reduce his 23.4 percent stake in Graham Holdings. In exchange, Graham Holdings would spin off some portion of its assets — which include lucrative broadcast television and cable subsidiaries as well as the for-profit Kaplan education business — into a new unit that would be owned by Buffett’s Berkshire.

Warren Buffett would also receive cash and the relatively small number of Berkshire Hathaway shares, worth about $3 million, owned by Graham Holdings.

Friday, February 14, 2014

Buffett vs Ted Seides and hedgefunds

Six years ago, Buffett and Protégé's Ted Seides made a $1 million bet, with Buffett predicting that the S&P500 Index would outperform hedge funds over a 10-year period, and Seides taking the opposite view. 

Well, six years later, Buffett's S&P index fund, Vanguard Admiral shares, is up 43.8%, against an estimated 12.5% for the five hedge funds picked by Seides.

In the bet's first year, 2008, Admiral shares dropped 37% against the hedge funds' 24% decline. Buffett only took the lead in the race in 2012. Buffett's Admiral shares returned 32.3% last year, while Protégé's hedge funds gained just 11.8%. 

The winner gets to choose the charity that gets the $1 million, which has actually grown to nearly $1.3 million since the money was invested in Berkshire stock.

via https://www.finalternatives.com/node/26064

Thursday, February 13, 2014

Start saving early

I think the biggest mistake is not learning the habits of saving properly early. Because saving is a habit. And then, trying to get rich quick. 

It's pretty easy to get well-to-do slowly. But it's not easy to get rich quick.

Wednesday, February 12, 2014

Hold good investments forever

Warren Buffett has often been an advocate for long term investing. He has often said that his favorite holding period for investments is 'forever'.

"When we buy companies from people, we buy them for keeps. People can trust us to keep our word on this."

Tuesday, February 11, 2014

Warren Buffett March Madness open March 3

Warren Buffett, CEO of Berkshire Hathaway says, “Millions of people play brackets every March, so why not take a shot at becoming $1 billion richer for doing so. While there is no simple path to success, it sure doesn’t get much easier than filling out a bracket online.”

The registration begins on 3rd March and will run until 19th March. All participants who register prior to the tournament selection process will receive their brackets in the evening of 16th March.

In order to win, bettors have to fill out a perfect bracket, keeping in mind that the odds are not amazing – approximately 1 in 9.2 quintillion. If there is a winner, the prize would be paid in 40 annual installments of $25 million.

Monday, February 10, 2014

Berkshire invests in USG Corporation

A January 2014 regulatory filing showed that Buffett's holding company Berkshire Hathaway acquired more shares in USG Corporation by exchanging US$243.8M of convertible notes it held in the Chicago-based company. This has now made Berkshire Hathaway the largest single shareholder in USG.

USG Corporation, formerly known as United States Gypsum Company, is the largest producer of gypsum plasterboard in North America, and the producer of several other homebuilding products.

Related Stock Tickers: USG  BRK.A  BRK.B

Thursday, February 6, 2014

Warren Buffett vs Dan Loeb

A proposal made by Third Point hedge-fund CEO and activist investor Daniel Loeb to spin off Dow Chemical's petrochemical manufacturing business didn't go over well with Mr Warren Buffett.

It's not very often that Warren Buffett gets in a beef with someone regarding the holdings in Berkshire Hathaway. 

In conversations with Dow CEO Andrew Liveris, Buffett said he was happy with the moves the company has made so far, and they were in line with investors who will stay versus investors who will leave.

Wednesday, February 5, 2014

Warren Buffett Top Ten stocks in portfolio

The following is the top 10 holdings in Berkshire. This was last reported in September 2013.

Company                                         Percent of Portfolio

1.) Wells Fargo                               20.79%

2.) Coca Cola Co                16.46%

3.) International Business Machine    13.7%

4.) American Express Co                   12.44%

5.) Procter & Gamble Co          4.33%

6.) Wal Mart Stores Inc           3.95%

7.) Exxon Mobil Corp             3.74%

8.) U S Bancorp Del                       3.14%

9.) Directv                                      2.37%

10.) Davita Inc                                  1.94%

Tuesday, February 4, 2014

3 lessons from Warren Buffett's Wells Fargo purchase

1. In the face of an oncoming crisis, own the best.

2. When the market is crashing, your favorite company may not be your best investment.

3. Don't avoid buying just because a stock is going up.

Monday, February 3, 2014

Invest for long term and have patience

I'm known as a long term investor and a patient guy, but that is not my idea of a big move. To understand why that happened, we need first to look at one of the two important variables that affect investment results: interest rates. These act on financial valuations the way gravity acts on matter:
    "The higher the rate, the greater the downward pull. That's because the rates of return that investors need from any kind of investment are directly tied to the risk-free rate that they can earn from government securities. So if the government rate rises, the prices of all other investments must adjust downward, to a level that brings their expected rates of return into line.
    "In the 1964-81 period, there was a tremendous increase in the rates on long-term government bonds, which moved from just over 4% at year-end 1964 to more than 15% by late 1981. That rise in rates had a huge depressing effect on the value of all investments, but the one we noticed, of course, was the price of equities. So there – in that tripling of the gravitational pull of interest rates – lies the major explanation of why tremendous growth in the economy was accompanied by a stock market going nowhere."