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 […]

Berkshire Hathaway is Safe and Cheap

Posted on 24 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 […]

Unconventional Investments

Posted on 11 CommentsPosted in Portfolio Management, Shareholder Letters & Reports, Warren Buffett

I was glancing through the Berkshire letters from the late 1990’s because I recall Buffett briefly mentioning his large silver position he acquired and I was trying to see if Buffett referenced the specific cash cost of production. He didn’t in the letter—only mentioning that Berkshire acquired 111 million ounces. He has mentioned in other interviews that silver was in fact below the cost of production—a supply/demand imbalance that can persist for a while, but not forever. Buffett felt comfortable […]

Buffett on Taxes (1965 version)

Posted on 6 CommentsPosted in Investment Quotes, Portfolio Management, Warren Buffett

“One of my friends—a noted West Coast philosopher—maintains that a majority of life’s errors are caused by forgetting what one is really trying to do.” – Warren Buffett, 1965 BPL Partnership Letter I’ve read a few things lately discussing the benefits of designing a “tax-efficient” investment strategy. I’ve said this before, but I think there is a significant misunderstanding on the tax benefits of a low-turnover portfolio, and there is an even larger misunderstanding on the concept of turnover itself. […]

Drivers of ROE in the Context of Portfolio Management

Posted on 16 CommentsPosted in Portfolio Management, Think Differently, Warren Buffett

Someone on the Corner of Berkshire and Fairfax board recently posted this comment referencing Buffett’s well-known piece on inflation from 1977. In the article, Buffett describes the variables that drive a company’s return on equity. There are only five ways that a company can improve returns: Increase turnover Cheaper leverage (reduce interest charges) More leverage (increase the amount of assets relative to a given level of equity) Lower income taxes Wider margins Notice three of the five drivers of ROE have […]