Analyst Ratings and the Institutional Imperative

Posted on 11 CommentsPosted in General Thoughts, Investment Quotes, Think Differently, Warren Buffett

Buffett talks a lot about the concept he calls the “institutional imperative”. In his 1989 shareholder letter, when he was describing his mistakes of the first 25 years managing Berkshire, he outlines what he means by this (emphasis mine): “My most surprising discovery: the overwhelming importance in business of an unseen force that we might call “the institutional imperative.” In business school, I was given no hint of the imperative’s existence and I did not intuitively understand it when I […]

Two Key Checklist Items

Posted on 21 CommentsPosted in Investment Philosophy, Investment Quotes, Walter Schloss

I am not a big fan of going through specific “checklist” items one by one when evaluating an investment idea. I know this idea has gained enormous popularity in recent years, partly due to the good book The Checklist Manifesto, and partly popularized in value investing circles by Mohnish Pabrai. I respect Mohnish a lot, and I think his idea of evaluating previous investment mistakes (both his own mistakes and especially the mistakes of other great investors) is an excellent exercise. […]

A 1977 Warren Buffett Interview From the WSJ Archives

Posted on 5 CommentsPosted in Portfolio Management, Warren Buffett

Someone I’m connected with on Linkedin sent me this old article from 1977 in the Wall Street Journal on Warren Buffett. I thought I’d share it here, along with a few highlights. It’s an article I haven’t seen previously. There isn’t much new here, but I thought it was quick read with a couple passages worth commenting on. One thing I don’t recall Buffett ever describing were the pressures of money management that he felt while running his partnership. This […]

Buffett’s Investment in Dempster Mill–A Cigar Butt

Posted on 16 CommentsPosted in Case Studies, Superinvestors, Warren Buffett

I came across a case study that discusses Dempster Mill recently. I thought I’d post a brief summary of some notes I jotted down while reading it. Dempster Mill is a company that Buffett bought in the early 1960’s when operating his partnership. The company manufactured farm equipment, specifically windmills and water irrigation systems. It was a difficult business because the farm equipment it made was not much different than its competitors’ products, and because of these commodity-like economics, the […]

Warren Buffett 1998 Talk at University of Florida

Posted on 13 CommentsPosted in General Thoughts, Investment Philosophy, Investment Quotes, Superinvestors, Warren Buffett

I spent some time traveling in the car last week. Whenever I am driving by myself, I always listen to something—usually related to business or investing. I keep a long list of videos of interviews or talks that I can pick from whenever I am in the car. On this particular short trip, I had got through two different videos. I listened to this talk from 2012 where Jeff Bezos talks about Amazon Web Services—the cloud computing services business that […]

General Thoughts on Portfolio Management and Diversification

Posted on 13 CommentsPosted in General Thoughts, Investment Philosophy, Investment Quotes, Walter Schloss

“Ship your grain across the sea; after many days you may receive a return. Invest in seven ventures, yes, in eight; you do not know what disaster may come upon the land.” –Ecclesiastes 11:1-2 Investors have always discussed and debated the merits of diversification—apparently even as far back as the days of King Solomon (although his definition of diversification—7 or 8 “ventures”—might not sit well with modern day portfolio theory and mutual fund managers who often hold 30, 50, or 100 […]

Berkshire Hathaway is Safe and Cheap

Posted on 25 CommentsPosted in Investment Ideas & Company Research, Warren Buffett

I own Berkshire Hathaway stock. In fact, it’s a stock I bought recently for the first time ever, despite following it for years. I think earlier this year it became (and to a large extent still is) far too cheap. It’s not a stock that I think has huge upside, but it is a stock that I think has no downside. (That said, I do think there is enough upside to get plenty excited). In proper investment parlance, the risk/reward […]

Comments on Mistakes and Buffett’s Original Berkshire Purchase

Posted on 11 CommentsPosted in Case Studies, Superinvestors, Warren Buffett

I was reading through the 2014 (last year’s) Berkshire Hathaway annual report and 10-K looking for a few things, and happened to reread Buffett’s letter from last year. I wrote a post a couple weeks ago concerning buybacks and Outerwall, and how a company that is buying back stock of a dying business is not a good use of capital. I noticed a passage in last year’s letter that is relevant to the topic—Buffett himself was attracted to buybacks on a […]

Long-term Thinking and Back to Basics

Posted on 12 CommentsPosted in General Thoughts, Get Better by Reading, Think Differently, Warren Buffett

When markets are tumbling, it’s time to get excited about stocks. This is often talked about, but rarely practiced. J. Paul Getty once said the key to getting rich is simple: “Buy when everyone else is selling and hold when everyone else is buying”. For the value investing community, Buffett’s famous “Be greedy when others are fearful” basically is the same gist. Commonly referenced and preached, but far less often practiced. I am lucky to have a great client base at […]

A 31-Year Old Buffett Discusses the Stock Market

Posted on 6 CommentsPosted in Warren Buffett

I came across this video that I’ve never seen before. It’s a video of a young 31-year old Warren Buffett giving an interview to a journalist about the stock market decline that occurred in the first half of 1962: Buffett’s comment at the very beginning of the video regarding President Kennedy’s “actions on steel” referred to this press conference on April 16, 1962. Basically, JFK announced that the Department of Justice was opening an investigation into the pricing strategies of […]