> Warren Buffett Blog: November 2014

Thursday, November 27, 2014

Business and investing are complimentary skills

"I am a better investor because I am a businessman.... and a better businessman because I am an investor."

Wednesday, November 26, 2014

Patience for long term investing leads to success

Successful Investing takes time, discipline and patience. No matter how great the talent or effort, some things just take time: You can't produce a baby in one month by getting nine women pregnant.

Monday, November 24, 2014

Howard Buffett son of Warren Buffett sells Omaha home

Howard Buffett recently sold his house at 121 S. 51st St, Omaha, Nebraska. for $320,000 and bought another in the Omaha area at what he said was a “secret location.”

At that price, his annual return would be about 0.7 percent per year, since he bought the house in 2004 for $300,000. The couple, whose main residence is in Decatur, Illinois, had the house up for sale in 2009 for $375,000, but it didn’t sell and they decided to keep it for their visits to Omaha.

Wednesday, November 19, 2014

Choosing stocks carefully will reap benefits long term

What an investor needs is the ability to correctly evaluate selected businesses. Note that word "selected": You don't have to be an expert on every company, or even many. You only have to be able to evaluate companies within your circle of competence. 

The size of that circle is not very important; knowing its boundaries, however, is vital.

Tuesday, November 18, 2014

Corporate profits cannot always remain at a high level due to competition in markets

You know, someone once told me that New York has more lawyers than people. I think that’s the same fellow who thinks profits will become larger than GDP. When you begin to expect the growth of a component factor to forever outpace that of the aggregate, you get into certain mathematical problems. 

In my opinion, you have to be wildly optimistic to believe that corporate profits as a percent of GDP can, for any sustained period, hold much above 6%. One thing keeping the percentage down will be competition, which is alive and well.”

Monday, November 17, 2014

Buffett to buy Duracell company that makes batteries

Berkshire Hathaway has announced that it has entered into a “definitive agreement” with Procter and Gamble (P&G) where it will acquire the Duracell battery business from P&G.

In a press statement, the company said, pursuant to the agreement, in exchange for a recapitalised Duracell Company, which will include approximately US$1.7 billion in cash at closing, P&G will receive shares of P&G’s common stock currently held by Berkshire Hathaway having a current value of approximately $4.7 billion. The transaction is expected to close in the second half of 2015 and is subject to obtaining various regulatory approvals as well as certain other customary closing conditions.

Warren Buffett, Berkshire Hathaway chief executive officer, said that he has “always been impressed by Duracell, as a consumer and as a long-term investor in P&G and Gillette”. Buffett added that Duracell is a leading global brand with top quality products, and it will fit well within Berkshire Hathaway.

Wednesday, November 12, 2014

Own a good company for long term

If you aren't willing to own a stock for ten years, don't even think about owning it for ten minutes. Put together a portfolio of companies whose aggregate earnings march upward over the years, and so also will the portfolio's market value.

Monday, November 10, 2014

Berkshire Q3 numbers drop not a bad thing

For the Q3 earnings, Berkshire Hathaway’s reported a net profit decline of 9% to $4.6 billion, or $2,811 per Class A share...... compared with $5 billion, or $3,074 per share, a year earlier.

A drop in earnings might sound bad, but the previous year numbers were driven by unusually good investment returns a year ago, when Berkshire Hathaway cashed in on a number of loans in made during the financial crisis, including investments in General Electric, Goldman Sachs, and Mars & Wrigley.

The company ended the quarter with more than $60 billion in cash. Warren Buffett likes to keep $20 billion sitting around as insurance for the insurance businesses. That left more than $40 billion for acquisitions.

Monday, November 3, 2014

Melinda Gates praises Warren Buffett

Warren with friend
"One of the things I was most impressed about when Bill and I met Warren Buffett very early on was he introduced us to his friends. And Warren has the most high quality set of friends you could meet, and these are friends that he has had over his lifetime. And it really got me thinking, “wow, I better cultivate my friends. Warren does little things with his friends, like he will send you an article of something he is thinking about, reading about. That was a way to help me think about my friends." - Melinda Gates (Wife of Bill Gates)