Tag Archives: Berkshire

Interesting reads 17 Aug 2013 – Seth Klarman, Berkshire, Inverted Questions, History of Rupee


How to Invest Like Seth Klarman – http://bit.ly/146VfrQ
Seth Klarman as we all know a famous hedge fund manager who has managed to deliver more than 20% annualised returns for the past 3 decades. Author of ‘Margin of Safety’ a book that is out of print and auctioned at $1000 per copy. What are the traits for investing like him? This article gives few pointers.

Value Investing: Why Doesn’t Everyone Do It? – http://bit.ly/14uWMU2
Why Value Investing is not being practiced by a lot of people? Simple reason, it is boring, less of action and thrill. You will not trade frequently, You will not churn money in and out. It takes a lot of patience, even for a very long time, waiting for your stock picks to be noticed by markets, patience to sit on cash for a long time and it may even be painful as you may be travelling on opposite direction of most others.

Invert, always Invert. 5 Inverted Questions for Maximum Investing Success – http://bit.ly/1bFsMux
Jae Jun from OSV talks about what Charlie Munger took from Carl Jacobi the 19th century German mathematician, and applied to investing. Asking the right questions in an inverted manner before investing may prove to be useful. A good read.

Should Berkshire Hathaway Go Private? – http://bit.ly/1cF7BwE
Larry Cunningham – author of one of the best books ever about Warren Buffett, ‘Essays of Warren Buffett: Lessons for Corporate America’ writes an interesting article with pros and cons of assuming should Berkshire go private.

The volatile journey of Indian rupee since independence – http://bit.ly/16nIomZ
As the rupee against the dollar has weakend upto Rs.62 this week, this article ponders over the history of the Rupee VS Dollar since Indian Independence. Starting at almost being equal in 1947, the rupee has very slowly depreciated and suddenly moved down since 1993.

Leave a comment

Filed under Finance, Investing

Michael J. Mauboussin & Coffee Can approach – Long term investing


Michael J. Mauboussin & Coffee Can approach – Long term investing

I recently read an excellent collection of articles on the subject “Investment Myths” from the latest edition of ‘Wealth Insight’ – one of the best investment magazines I regularly read – published by valueresearchonline.com

One of the topic was about Long term investing and how it is perceived today by many as an impossible one, which is wrong.

In this topic I came across an excellent piece of information wrote by Michael J. Mauboussin.

Given below the text as is from the magazine.

The Coffee can approach

Michael J. Mauboussin, earlier Chief Investment Strategist at Legg Mason Capital Management wrote about the coffee can approach to investing. This was a real-life story about an investor in the US who would buy $5000 worth of stocks and put their share certificates in a safe deposit box. Sitting in the box, the investor did nothing about them.

After his death, it was found that some investments turned into losses and were valued at $2000, many others were valued at over $100,000 and one investment had gained a value of $800,000.

This real-life story will elicit different reactions among different individuals. Some would say you cannot buy-and-forget; some others would reminisce that is what their fathers did. But the key lesson is not buy-and-forget. Rather that, it is wise not to get carried away with market fluctuations and stick to your investments. This is the essence of Buffett’s investing style. “Lethargy bordering on sloth remains the cornerstone of our investment style” (Berkshire Annual letter 1990).
Please provide your thoughts on this approach, and if you have come across any real life happenings like these, – (it could be a positive or negative – that is, buy and forget – lead to gains or even losses) – please share with us in this discussion.

Leave a comment

Filed under Investing

Warren Buffett on Volatility & Beta


Warren Buffett on Volatility & Beta

I recently read an excellent collection of articles on the subject “Investment Myths” from the latest edition of ‘Wealth Insight’ – one of the best investment magazines I regularly read – published by valueresearchonline.com

One of the myths was about staying away from falling markets and high volatility.

In this topic I came across an excellent piece of information told by Warren Buffet.

Given below the text as is from the magazine.

The volatility nonsense

Volatility or beta of a company is one of the latest “in-things” some investors like to look out for. Lower beta equals less risk goes the rationale.

However, Buffett considers the conventional wisdom on volatility nonsense.

“Finance departments believe that volatility equals risk. They want to measure risk, and they don’t know how to do it, basically. So they said volatility measures risk. I’ve often used the example of the Washington Post’s stock. When I first bought it in 1973 it had gone down almost 50 per cent, from a valuation of the whole company of close to $170 million down to $80 million.

Because it happened pretty fast, the beta of the stock had actually increased, and a professor would have told you that the company was more risky if you bought it for $80 million that if you bought it for $170 million. That’s something I’ve thought about ever since they told me that 25 years ago and I still haven’t figured it out” (Berkshire Annual Meeting, 1997).

According to Warren Buffett, it is not the price that matters, but the value that a particular company creates. In a Q&A with six business schools in 1999, Buffett explained, “When I do invest, I don’t care if the stock price goes from $10 to $2 but I do care about if the value went from $10 to $2”

Here’s some advice to those investors who keep on worrying about market fluctuations. “We want things to go down, but I have no idea what the stock market it going to do. I never do and I never will. It is not something I think about at all. When it goes down, I look harder at what I might buy that day because I know there is more likely to be some merchandise there to use my money effectively in” (Lecture at the University of Florida Business School 1998)

1 Comment

Filed under Investing