> Warren Buffett Blog: September 2014

Tuesday, September 30, 2014

Warren Buffett admits he makes mistakes sometimes

Our large buys have generally worked out well and, in a few cases, more than well. I have not, however, made my last mistake in purchasing either businesses or stocks. Not everything works out as planned.

Monday, September 29, 2014

5 Step to focus like Warren Buffett

Warren Buffett’s 5-Step Process for Prioritizing True Success

1. Know what you want – One day a few years back Warren went up to his pilot (we’ll call him Steve) and jokingly said “The fact that you’re still working for me, tells me I’m not doing my job. You should be out going after more of your goals and dreams.” Warren then asked Steve to list the top 25 things he wanted to do in the next few years or even his lifetime. Just jot down anything that comes to mind as being important to you that isn’t currently a part of your life. 

2. Pick your Top 5. Once Steve completed his list, Warren then asked him to review each item and circle the top five that were most important to him. The ones he wanted more than anything. Steve was hesitant because to him they were all massively important. After all, that’s why he wrote them down.

But Warren insisted that he could only pick five. So Steve spent some time with his list and after some deliberation, made five circles. “Are you sure these are the absolute highest priority for you” Warren asked. Steve confidently replied the affirmative.

3. Make your Top 5 Plan. Warren now asked Steve when he planned to get to work on these top 5 and what his approach would be. They spent the next while discussing Steve’s plan (for those of you who missed it, this is where my free Goal Setting and Action Workbook comes in). Steve explained “Warren, these are the most important things in my life right now. I’m going to get to work on them right away. I’ll start tomorrow. Actually, no I’ll start tonight.”

Steve went on the explain his plan, who he would enlist to help him and by when all these items would get done. Warren was starting to get excited. With any luck he would be out of a pilot within weeks…

4. Marry your priorities. Once the Top 5 planning session was over, Warren then asked “but what about these other 20 things on your list that you didn’t circle? What is your plan for completing those?” Steve replied confidently “Well the top five are my primary focus but the other twenty come in at a close second. They are still important so I’ll work on those intermittently as I see fit as I’m getting through my top 5. They are not as urgent but I still plan to give them dedicated effort.”

To Steve’s surprise, Warren responded sternly, “No. You’ve got it wrong Steve. Everything you didn’t circle just became your ‘avoid at all cost list’. No matter what, these things get no attention from you until you’ve succeeded with your top 5.”

5. Know your ‘Avoid at all Cost List‘ and stick to it. Did #4 surprise anyone? It certainly did me. Warren makes a powerful and somewhat unconventional point here. Most people would suggest ranking their second most important items just below their first. Makes sense at first, but as it turns out, this is the type of behavior that creates some of the most detrimental distractions in making big things happen.

via http://liveyourlegend.net/warren-buffetts-5-step-process-for-prioritizing-true-success-and-why-most-people-never-do-it/

Wednesday, September 24, 2014

Warren Buffett explains again the Burger King deal

"There isn’t a whole lot of intellectual property to transfer with hamburgers. This is not a case of trapped cash, it’s not a case of intellectual property. It’s a case of the larger company being in Canada."

Burger King earned net profit of $234 million on revenues of $1.14 billion last year while Tim Hortons made $429 million in net profit on revenues of $3.26 billion over the same period.

Tuesday, September 23, 2014

Warren Buffett wins sports bet

While at the MGM Grand for the Floyd Mayweather fight, the billionaire investor decided to bet on a sports book for the first time ever.

Buffett laid down his first-ever wager at a Las Vegas sports book with a bet of $550 at the MGM Grand on his alma mater, the Nebraska Cornhuskers. 

Buffett saw the line that had Nebraska favored over Fresno State by just 12½ points. So he put $550 on Nebraska.

The win left Warren Buffett richer by $500.

Monday, September 22, 2014

Warren Buffett on Detroit investment potential

Americans love cars. It all started here [in Detroit]. You can always get people’s eyes to light up when you sell them a new car.”

We’re ready to buy a business here tomorrow, Every city has issues, that’s the time to buy.

Investment was paralyzed. [In 1975 New York was almost Bankrupt]. Look at it today. Great cities will remain great as long as they tackle (their) problems.

Rather be unknown and be the best

Would you like, publicly, to be considered as the best lover in the world, but privately know that you are the worst? Or, would you rather be considered publicly to be the worst lover in the world, when privately you know that you are the best?

Thursday, September 18, 2014

Berkshire unit wants to help Marijuana businesses

 Cubic Designs Inc., a small Wisconsin-based unit of Berkshire that makes platforms and installs “free-standing structures in warehouses has reached out to over 1,000 Colorado and Washington pot dispensaries in an effort to help them maximize their functional space for growing and harvesting marijuana.

“Double your growing space,” the flier reads in capital letters, above an image of an indoor facility with rows of plants. Another page says, “Grow your profits.”

Wednesday, September 17, 2014

Charlie Munger on Ben Graham & Buffett

I don’t love Ben Graham and his ideas the way Warren does. You have to understand, to Warren — who discovered him at such a young age and then went to work for him — Ben Graham’s insights changed his whole life, and he spent much of his early years worshiping the master at close range.  But I have to say, Ben Graham had a lot to learn as an investor.  His ideas of how to value companies were all shaped by how the Great Crash and the Depression almost destroyed him, and he was always a little afraid of what the market can do. It left him with an aftermath of fear for the rest of his life, and all his methods were designed to keep that at bay.

I think Ben Graham wasn’t nearly as good an investor as Warren Buffett is or even as good as I am.  Buying those cheap, cigar-butt stocks [companies with limited potential growth selling at a fraction of what they would be worth in a takeover or liquidation] was a snare and a delusion, and it would never work with the kinds of sums of money we have. You can’t do it with billions of dollars or even many millions of dollars.  But he was a very good writer and a very good teacher and a brilliant man, one of the only intellectuals – probably the only intellectual — in the investing business at the time.

Monday, September 15, 2014

Charlie Munger left a great career to join Berkshire

Warren talked me into leaving the law business, and that was a very significant influence on me. I was already thinking about becoming a full-time investor, and Warren told me I was far better suited to that. He was right. I would probably have done it myself, but he pushed me to it. 

I have to say, it isn’t an easy thing to work very hard for many years to build up a significant career, as I had done, and then to destroy that career on purpose. [Mr. Munger left the law firm he founded, Munger, Tolles & Olson LLP, in 1965 to serve as Mr. Buffett’s right-hand man at Berkshire and to run a private investment partnership.] That would have been a lot harder to do if not for Warren’s influence on me.

It wasn’t a mistake. It worked out remarkably well for both of us and for a lot of other people as well.

Thursday, September 11, 2014

Munger praises Warren Buffett's learning capacity

Warren is one of the best learning machines on this earth. The turtles who outrun the hares are learning machines. If you stop learning in this world, the world rushes right by you. 

Warren was lucky that he could still learn effectively and build his skills, even after he reached retirement age. Warren's investing skills have markedly increased since he turned 65.

Wednesday, September 10, 2014

Reading and thinking was important for Warren Buffett's sucess

I insist on a lot of time being spent, almost every day, to just sit and think. That is very uncommon in American business. I read and think. So I do more reading and thinking, and make less impulse decisions than most people in business. I do it because I like this kind of life.

Tuesday, September 9, 2014

Charlie Munger notes Buffett's early interest in stocks as key ingredient to success

The first factor is the mental aptitude. Warren is seriously smart. Warren doesn't spend any time on self-pity, envy, etc.

Then there's the good effect caused by his doing this since he was 10 years old. It's very hard to succeed until you take the first step in what you're strongly interested in. There's no substitute for strong interest and he got a very early start.

Wednesday, September 3, 2014

Warren Buffett says Burger King acquisition is not tax related

Warren Buffett has defended his involvement in a tax inversion deal that will transfer Burger King’s headquarters to Canada as part of its $11.4bn acquisition of coffee and doughnuts chain Tim Hortons.

Mr Buffett, whose conglomerate Berkshire Hathaway will provide $3bn of financing for the deal, said Tim Hortons’ strong roots in Canada and limited presence in the US was the main reason for moving the combined company’s headquarters north of the border, rather than tax.

“Tim Hortons earns more money than Burger King does. I just don’t know how the Canadians would feel about Tim Hortons moving to Florida. The main thing here is to make the Canadians happy.”

Tuesday, September 2, 2014

Warren Buffett helps Burger King

Warren Buffett is putting up some of the cash for Burger King's $11 billion deal to buy Canadian coffee-and-doughnut chain Tim Hortons. As part of the deal, the combined company's headquarters will be in Toronto, instead of BK's current home base of Miami, which could help it save money in U.S. taxes. 

As part of the deal, Berkshire Hathaway will provide $3 billion in exchange for preferred shares in the new company. The coupon on those shares: a hefty 9 percent. 

Burger King also expects the debt for the deal to have a junk rating, indicating higher borrowing costs.