This past Saturday, the Woodstock for capitalists was on as Warren Buffett and Charlie Munger held their annual shareholder conference.
If you want to succeed in investing and reach your financial goals, this conference and the insights from it are all you need to listen to in order to learn about investing, what’s going on, and what to do about it.
In today’s article, I’ll summarize what the key points to take out are and also save you the 6-hour watch.
Introduction
Today, I’ll continue with my series on market risks. These are the main market risks I see and you can read more about them by clicking on the links provided:
In this article, I’ll focus on book values which are often an omitted metric, especially late into a bull market, but are extremely important. More →
Introduction
If there is something I am against, it’s buybacks that are made at any price. Would you pay $3.5 million for a house when the building cost plus the land cost just $1 million? Probably not, but that is exactly what corporate managers do on a daily basis while they keep telling you how good of a thing they are doing. Buybacks might seem like a good idea, but it destroys your value in the long term. Let me explain what’s going on. More →
Introduction
In December 2016, I wrote an article titled Is Your Value Being Destroyed? where I discussed how buybacks are destroying long term shareholder value.
My favorite example from that article was General Electric (NYSE: GE) because it seemed completely illogical to me that a company would sell valuable assets in order to increase buyback activity because this isn’t how you operate a business, this is pure short term financial engineering. More →
Introduction
The stock market (S&P 500) didn’t go higher last month, which is, to be a bit sarcastic, very strange. More →
Introduction
One of the biggest concerns surrounding Berkshire Hathaway (NYSE: BRK.A, BRK.B) is what will happen after Buffett and Munger.
To keep our karma positive, I’ll write this article under the assumption that Buffett gets an offer from Bill Gates to be the project manager of Microsoft’s (NASDAQ: MSFT) new multi-billion virtual reality Bridge game project. I think something like this could make Buffett leave BRK as I wish him many more decades of health. More →
Introduction
The predominant investing paradigm is to invest in the S&P 500 because of its low risk and good diversification, and because it has done well in the past. Given this, most buy and forget investors simply put their money into the S&P 500.
Now, what if there was an investment that offered the same level of diversification, less risk, and a higher return? It would be logical for the buy and forget it investor to immediately invest in such an investment vehicle. More →
Introduction
There’s a huge problem affecting corporate America that nobody is seeing because most people think in positives and negatives, and can’t think on an relative scale. What do I mean by this? Well, when shareholders judge management, they look at whether the bottom line is positive and in line with what the competition is doing. Nobody is assessing whether it could have been much better.
We expect only the best from our favorite athletes and we hope our children develop to their full potential but when it comes to corporate management, we remain mostly silent and accept whatever they throw at us. More →
Introduction
Last week we discussed Klarman’s view on the best business valuation methods. You can find the article here. Today we’ll discuss his approach to investment research.
Studying fairly priced securities won’t get you far because you’re competing with thousands of others who have researched those companies and, especially in the current market environment, if there is anything worth owning, it will probably be expensive. Therefore, to find bargain investments, an investor has to look where others aren’t looking or refuse to look. More →
Introduction
I would define a dumb investor as one who doesn’t think about risk in relation to reward, and therefore I fearlessly say: the majority of investors are behaving in a pretty dumb way.
This is a heavy statement, especially considering markets have performed nothing short of spectacularly in the last 8 years. As evidence, the S&P 500 is up three-fold since 2009 and continues to strongly march ahead. More →