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Warren Buffett: investment writing a myth

Named world's richest man crown many times. Bill Gates admitted he was
a "Buffett fan." The Warren Buffett is a "stock
god" reputation of the investor Warren. Buffett, his wealth now ranked
second in the world.

Although the U.S. stock market has been stagnant the past six months, the new
economy companies that have repeatedly warning, but Warren Buffett is still the myth
of their immortal added a brilliant stroke. Buffett's flagship company said
recently that nearly a year since the acquisition of companies have earnings, second
quarter net profit up 773 million U.S. dollars, up 21%.

As Buffett continue to favor the traditional economy and its subsidiary companies
acquired over the past year, including paint companies, jewelry companies, 8
companies. Buffett said its profits come from retail, manufacturing and services
industries a number of mergers and acquisitions.

Fortune story: his childhood love Investment

Buffett was born August 30, 1930, Buffett's father, Howard had to meddle
in the securities brokerage business, which from an early age how to be a kind of
influenced Buffett. Known about the age of 11 he had bought 38 U.S. dollars per
share, preferred shares the story of the city facilities.

However, few people know this before, Buffett even when young, have the desire to
become rich. His biography says Buffett, then around the age claimed that he will
grow up to become very, very rich. 6 years old, he would earn by selling cola 5 cents.
In peacetime, he was asked his father door to door selling soda.

7-year-old Buffett, high fever was admitted to the hospital. His bed, filled with figures
with a pencil on paper. He said to the nurse, the number representing his future
property. He said: "Now I do not have much money, but one day I will be
very rich. My photos will also appear in the newspaper."

Buffett is like a child "earn 100 U.S. dollars in the 1000 move"
a book. He also refers to the book proposal, and several friends one by one trying to
save money: clean-up ticket to the Happy Valley field; collection for sale such as golf.
To the age of 14, Buffett was able to invest 1,200 dollars into a piece of 40 acres of
Nebraska farm.
Learning investment skills

Buffett does not invest in systems to determine their own before he and most investors
do the same as technical analysis, to listen to inside information. This is the real
Buffett, he is not born to know the price-earnings ratio of 14 times to buy Coca-Cola

Buffett under the age of 20, he "play the stock market&a mp;quot; - he
knew the teachers hold AT & T stock (which is the typical blue chips), then
choose the short-selling. Boys the same age will usually read the newspaper sports
watch (China's young people will buy the first copies of
"football" like the newspaper reported), but he read the financial
pages of the stock chart.

After graduating from high school, Buffett was persuaded to go to the University of
Pennsylvania Wharton School study, but often soaked in Philadelphia, where the
exchange of stock charts and find out inside information.

If Buffett were to continue to study charts and find out insider information, and now
may become insolvent, or is in a retail only. But he did not stop the pace of learning,
he applied to Benjamin? Graham taught at Columbia University student qualifications.
In Colombia, Graham's Socratic teaching to benefit from Buffett. He began
to gradually form their own investment system.

In 1957, the well-known investment consultants Fisher published "ordinary
common shares and non-profit," a book. Buffett himself door to reading
Fisher for advice, he thinks the idea of Fisher is impressive. About 50 in the late 20th
century, he gradually formed its own investment syste m.

Now, decades later, the accumulation of Buffett's investment philosophy
and practice of their own, writing a wonderful investment in the myth.

Buffett's investment philosophy of the Enlightenment

Warren. Buffett (Warren E. Buffett) 1930 年 8 was born in Nebraska, his father was
a local stockbroker and Republican members of Congress, Buffett was a little boy on
the figures when they are fascinated. Began collecting books at age 8, the stock
market. 11-year-old bought his first stock, 25 to 100 U.S. dollars to establish a
partnership with the 7 investment company, the U.S. "Forbes"
magazine ranked, he led the Berkshire's investment performance ranks first
in the world counterparts. Buffett refused to speculation, but a simple investment
strategies and principles, not to short out, ignoring the ups and downs of daily share
prices, not only the heart of economic forms, the hands of the proper management of
the portfolio to create a unique investment strategy, b e Wall Street as "the
great investors in today's world"

Basic principles of Buffett investment

1. Business principles

Buffett said: "We invest the time to ourselves as business analysts, rather
than market analysts or financial analyst, nor securities analysts." So he
will focus on the best He may be interested in acquiring the collection of industry data,
divided into:

(1) whether the enterprise in order to understand simple

(2) the company's operating condition is stable over the past

(3) long-term development of the company's vision is to be optimistic

2. Operating principles

In considering the acquisition of businesses, Buffett attaches great importance to
quality management. Of course, that honesty and dry mixing. Specifically, he
considered the main factors

(1) whether the rational management

(2) whether the management shareholders frank

(3) whether the management will be able to fight "corporate body acts

3. Financial principles

(1) pay attention to returns on equity, not earnings per share

(2) calculation of "shareholder value"

(3) companies seeking high interest rates

(1 U.S. dollar to retain the company must ensure that every 1 U.S. dollar foreign
exchange market)

4. Market principles

Decided to share the stock market, analysts according to the characteristics of each
stage to the market price as a benchmark, re-evaluate the value of company stock, and
thus decide whether to stock trading and holding. All in all, rational investment has
two elements:

(1) how the real value of enterprise

(2) whether the company's share price is far below its real value, buy the
company's stock?

Buffett to buy first and what was found, and then decide the price is correct, and can
make you be in a proper price when buying power, which reflects the intrinsic value

Indeed, Buffett's success has given us profound insights, Leno vo Powei the
broader market early and Zhuanggu diving, are all reasons are internal, combined with
the characteristics of China's stock market and the new factors, innovative
investment philosophy, each place investors should reconsider the issue, is the
decisive prerequisite for the stock market.

Buffett "a bird in hand"
?December 30, 2004
Over the past year, the U.S. stock market staged high dive, what stock market wealth
loss of nearly 5 trillion, equivalent to half the U.S. gross domestic product. Although
investors have been tears, but the Wall Street there is a person they dress. He is the
American "stock god" Warren Buffett.

"A bird in the hand than two in the bush!" Buffett recently listed
companies in its flagship annual report, citing the ancient Greek
"Aesop's Fables," in this proverb, once again
outlined his investment ideas. In his view, gold and silver the most practical, the
money bet on Internet companies are not making profit, but wishful dreams of riches.

Two years ago, Buffett predicted that the bubble will burst technology networks. The
second quarter of last year, reflecting the trend of the U.S. Nasdaq technology stocks
index continued to tumble, and now from a high of 5,000 points, falls below key
psychological barrier of 2000 points, return to the December 1998 level. Many Wall
Street investors worth plummeted, but always invested in insurance, retail and other
old economy companies Buffett, who controls the listed company buck the trend and
the last year, earning 3.3 billion U.S. dollars Great!

Buffett is a living god of wealth in American eyes. His flagship companies - Berkshire
Hathaway investment company's unique achievements in the world. 30
years, the company's capital, the average profit rate of 24%, the stock
market on the world's most expensive. Of course, in full swing a year ago,
when technology stocks, the company has also been eclipsed. At that time t he stock
market investors stocks technology network almost crazy, but Buffett willing to take
risks, he would rather pass with such stocks, for which Hathaway's share
price fell sharply. Early last year, Wall Street stock indexes all hit new high,
Hathaway's stock price was shocked to bottom, since 1998, the company
earnings per share 2362 U.S. dollars, fell to only 1,025 U.S. dollars in 1999,
Hathaway's stock price fell 40,000 U.S. dollars, compared with the end of
June 1998 peak of 8.4 million, down more than half.

At that time, many people micro Buffett speech, even he himself also to the
shareholders for their investment over the past year, the annual report said:
"Even if Oolong detective Crusoe (low detective film in France), also a see
your fault ... ... I am the President of "asset allocation 'failed at
most only a small level. "

Mr. Buffett does not want to change their investment philosophy. He believes that U.S.
companies be hard to maintain the high profit level, long-term U.S. interest rates
about 5.5%, in this case, return on equity, ability to maintain the 18-20% is

His investment view is that Wall Street is not superstitious, not listen to rumors,
actively track to buy those known as "butts" of being down in
value stocks, and do not care about short-term gains and losses. He selected only
those in a long-term dominance of the industry, technically difficult to be plagiarism,
and had a good record of profit enterprises. For those who do not know today what
tomorrow will be high-tech companies, Buffett has always avoided them to avoid like
the plague.

Buffett is a long-term investor, and his hobby is to find a reliable stock, buy it cheaply
as possible, as long as possible to save, then take a look at its value growing by the
day. In 1969, the United States all aspects are good, sustained economic growth and
stock market. But Buffett argued that it's not a good result, one of his
doctrine is that when the stock market soared in the time to keep their distance. He
later reduced, and could not find you want to buy the stock. So he decided to liquidate
his own company, the shares belonging to each shareholder are returned to them. He
decided to take a break and wait for the stock market decline. Sure enough, the early
70s, the stock market turmoil began, Wall Street shares fell rapidly one after another.
At this point, Buffett began to attack. He built a Berkshire Hathaway company, and
make it within a few years, a Coca-Cola, Gillette, "American
Express", Disney, "Washington Post" and many
other well-known enterprises in the United States shareholder.

Today the situation has similarities with that year. Internet bust of the entire stock
market lower, perhaps brought Buffett gave the opportunity to scale new miracle. But
he himself is a piece of advice to investors: "People always like Cinderella,
knew midnight comes, (car or waiter) will turn into pumpkins and mice, but they do
not want to miss the big dance even for a moment. They stayed there for too long. It is
now - or should - learn some old lessons: First, Wall Street is quite a mixed bag of
selling things; second, when the speculation seemed the easiest and most dangerous.

Admire Buffett
?December 30, 2004
Buffett has been one of my admiration of everyone. Even in the Soros and other
"hot" when such trivial matters, I have not wavered.
At this point, when I once again exposed to the Buffett dumping feeling of admiration
when really there are some new feelings. It is reported that Berkshire Sawei total
profits in 2002 reached a record 4.29 billion U.S. dollars, 2,795 U.S. dollars a share.
Annual profit in 2001 was only 795 million U.S. dollars.
Soaring profits in a bear market, what special "financial
expertise"? Seem to see. Last year, the company's performance
mainly benefited from three large: First, Geico car insurance get a 6.9 billion U.S.
dollars of insurance payments, pre-tax Chengbao Li Yun 416 million U.S. dollars,
almost 221 million U.S. dollars in 2001 twice. Second, some investments in junk
bonds and loans, received five times earnings, investment funds late last year to 83
million. Third, the 1998 acquisition of General Re have been revived. In the Dow and
S & P index continued with a record low, the flagship investment company
Buffett acquired a lot of money but the performance was rated as the Warren Buffett
financial skills amazing. Actually, it is not so mysterious God.
Buffett has been respected in accordance with the concept, its essence is the most
basic, most simple and obvious "common sense", one
"long-term concept," the investment through longer term,
removed due to market fluctuations caused by speculation, which reveals the
investment The true benefits and risks. The second is "investment
philosophy", that investment income should be based on the
company's performance and profitability. Third, "the idea of the
cost", that must consider the cost of capital and the cumulative effect of
transaction costs. The fourth is to "respect the market
principles", that is not lightly beat the market, but should meet at the
market rate of return. As the saying goes, "easier." Understand
the "common sense" is easy, but the "common
sense", as always, put into practice, it is difficult to have a consistent
ordinary courage.
Buffett has a famous saying: "When I consider the stock sale, the stock
market does not exist. From the stock market just to see if someone is willing to do
stupid things." This is a very great level. With this state, he will not be
short-term fluctuations in stock prices become a little rich or poor, because
he's holding period is very long. With this state, he can stay calm and put
most of the stock market falling because of the fear. Buffett said, "different
understanding of the stock price ---- Some people see is the implied intrinsic value,
some people see only the face value of ---- will have different investment behavior.
"These are two different concepts in the investment behavior under the
control of the man and master of the difference here.
Of course, Buffett also its own "financial skills." He is said to
especially favor "Lao Bashi" wisdom. Buffett's
investment principles, which he invested in the company's operating status
from "good to best", and their CEO from "best to
better." Buffett has always these two points as a "purchase
strategy." But buying the occasion, but does not "sell
Strategy." Based on this, many companies interested in introducing
strategic investors Buffett regarded as a "priority target." Buffett
also particularly fond of appointments for the elderly, his investment company, there
are six CEO more than 75 years of age. He believes that "very difficult to
teach novices to Lao Bashi." In other words, in a rapidly changing capital
markets, traditional wisdom and experience of such "Lao Bashi"
is in any case "teaching" is not out.
"A          stormy,      calls       forth  the      hero."      Big
"Bear" Man line, I discovered that "stock
god" high- tech. Buffett can create a miracle in a bear market, not only
worthy of medium and small investors is more worthy of a large number of
institutional investors think, on reflecting.

Investment insights: Buffett by you Huiyanshizhu
  At 10:24 on December 30, 2004
Warren Buffett may be said to be the world's most successful, best-known
investment guru, and his impressive investment records so many people of the dump,
about his investment strategy reports and books abound. Here we quote the full text
published in the March 13, 1998 the "Reference News"
newspaper article entitled "Fighting shares the sea without leaving defeat
─ ─ Buffett by you Huiyanshizhu" to reveal to you a part of Warren
Buffett's investment approach, look at the investment philosophy he
espoused. Reads as follows:

Long-term investment philosophy investment guru Warren Buffett

Business investment is easy to understand

"If you do not hold a stock of 10 years of preparation, so even the 10
minutes are not holding this stock," which is the investment guru Warren
Buffett's basic attitude for stock investments. This will be further analysis
of Buffett's long-term investment philosophy, Buffett recently holding on
to analyze the performance, as overseas investors into the stock market information.

Never hit record deficit

Such as the Warren Buffett of Berkshire Hathaway's 32 years of annual
investment performance and the American Standard - Poor's 500 stock
price index than the performance can be found in one of the 29 years Buffett beat the
index, only three years behind the index, more valuable is one of the five-year bear
trend when the U.S. stock market retreated into the occasion, Buffett has hit year after
year, "never loss" records. So Buffett's investment
philosophy not only for him to create an astonishing 23 billion U.S. dollars of wealth,
the stock selection method is also very worthy of global investors to learn.

Buffett's stock selection method is the basic school teacher to master the
Graham (Ben Graham) and 菲 利 普 费 希 尔 (Philip Fisher). The former to
"quantitative    analysis,"        which,       the    latter  a
"qualitative" as good, Buffett is set both in the Dacheng.

Graham's first "safety margin" (Margin Of Safety) of
prudent investment concepts, he believed that the real value of the stock value at the
end of Intrinsic value), the existence of such stock that is "safety
margin", so he suggested that investors will be energy for identify
undervalued stocks, regardless of broader market performance. As the quantitative
analysis of his contribution has been recognized for his later father of financia l
analysis. Graham "no loss" of the investment philosophy, but
also to future pursued a model by Warren Buffett.

Fisher is advocating investment growth rate is higher than average, relative growth
and has excellent profit management company. He and Graham biggest difference is
that Fisher read the financial report that just is not sufficient to determine whether to
invest, but as far as possible from people familiar with the company to obtain
first-hand information, this approach has become Fund manager stock picking
prerequisite before. Buffett sucked two investment methods to develop them.

With Buffett's investment portfolio to the end of 1996 (Table omitted) to
illustrate, in which eight major holding company Berkshire Hathaway of the total
market value of 27.75 billion U.S. dollars in market value of 87% stake, if this such
shares by the end of 1996, return date to be calculated, the 14- month portfolio return
and further rose to 37.72 percent.

Focus on niche moving steadily

This observation holds eight stocks Buffett, almost every stock is a household name
the world's leading companies, including Coca-Cola, the world's
largest beverage company, Gillette razor will hold 60% of the world to facilitate the
razor market, American Express Bank American Express Card and
traveler's checks are an essential tool for cross-border travel, Wells Fargo
has the largest commercial real estate market in California and among the top ten
banks in the United States, the Federal Home Loan Mortgage Corporation is the U.S.
the two major residential lenders, one of Disney acquired Capital Cities / ABC, after
to become the world's largest communication and entertainment companies,
McDonald's is also the world's largest fast-food industry, the
Washington Post is one of America's most respected newspaper , are far
higher than the profitability of the industry.

Analysis of the common characteristics of these enterprises is that every company
have a strong market niche, Buffett has made these companies have so-called
"concession"         (Franchise),     and     with     the    general
"commodity" (Commodity) different. Buffett on such a
concession but a simple definition, a consumer can not buy in a store a commodity
(such as Coca-Cola or Gillette razor), although there are other similar competing
products, but consumers will still be across the street to find this commodities. And
the advantages of such products in the foreseeable future are difficult to change, and
this    is    his   "long-term        investment,"         or   even
"permanent investment" fundamentals.

More importantly, Buffett's business and other enterprises have bright
prospects, "OK", so his investment risk is relatively Tai Fu
declines, his many institutional investors frequently buy a 200 kinds of Gupiao of
practice rather not agree, because Gong Si excessive number of cases, managers
simply can not penetrate into every company's operating condition, results
of some of the funds actually increased the risk of loss.

The sharp rise in recent years, many high-tech stocks, Buffett also admitted that
because he could not know more about this industry, so he
"avoid" technology stocks. Herein because the stock market
have a number of technology companies, but no one to grasp a few companies which
will eventually come to the fore, and its involvement in high-risk investment, as
"consistently good" by investing his own familiar territory,
because Buffett faith is "easy to understand the investment

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