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Tag: Warren Buffett

Warren Buffett’s Advice On How To Value A Business

Warren Buffett’s Advice On How To Value A Business

Warren Buffett has been investing in stocks since his teenage years. Over the past seven decades, he’s bought and sold thousands of stocks across sectors and industries accumulating hundreds of billions of dollars in value for himself and his investors along the way. During his lengthy career, Buffett has become skilled at calculating intrinsic value, the underlying value of a business based on its fundamentals. Warren Buffett: Starting with the cash flow statement The exact process Buffett uses varies from…

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Why Debt Is Like Russian Roulette

Why Debt Is Like Russian Roulette

Since the mid-1950s, global indebtedness has exploded to record levels. At the beginning of 2019, the IMF reported global debt reached an all-time high of $184 trillion in nominal terms at the end of 2018, equivalent to 225% of 2017 GDP. On a per capita basis, the world’s debt now exceeds $86,000, which according to the IMF is “more than 2½ times the average income-per-capita.” Further data show that the private sector’s debt has tripled since 1950 making it “the…

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Warren Buffett Lectures From 1991: What Makes A Good Business

Warren Buffett Lectures From 1991: What Makes A Good Business

Below are notes taken across three lectures by Warren Buffett to the Notre Dame Faculty in 1991 on the topic of pricing power, and what makes a good business. The first set of notes is a comparison between two companies, a capital-intensive telecoms business and a capital-light newspaper business: “Now I’ll tell you a little bit about these companies (we’re leading up to the question of whether the business makes a difference). Company A had thousands of MBAs working for it….

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Losing It All Pt.3

Losing It All Pt.3

Warren Buffett is considered to be the world’s best investor. Over the course of his career, he’s achieved outstanding returns for investors (and himself) buying undervalued stocks. He’s also achieved the best investment hit rate of all time; Buffett has only lost money on a few select occasions and losses have never exceeded more than 1% of capital. That being said, Buffett has made several mistakes during his career, and the biggest, he believes, cost him around $200 billion. Losing…

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Warren Buffett’s 5 Most Valuable Investment Quotes

Warren Buffett’s 5 Most Valuable Investment Quotes

Five of the most valuable pieces of investment advice Warren Buffett has given over the years. These quotes don’t really need much of an explanation, they speak for themselves. They almost entirely sum up Buffett’s investment strategy in less than 1,000 words. I believe that it’s always worth going back to investment advice like this from Buffett, Munger or Graham on a regular basis to refresh my memory and make sure I’m not drifting off track. Warren Buffett Describes How…

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Warren Buffett Describes How To Pick Stocks

Warren Buffett Describes How To Pick Stocks

Warren Buffett is the greatest investor alive today. After starting with a strategy based on value investing, Buffett’s investing has developed over the years to a more quality-based style, a change that’s produced huge returns for both himself and investors of Berkshire Hathaway. Buffett wasn’t born with all of his investment acumen. Over the years his strategy has developed and changed with experience into what it is today. “In my early days as a manager I, too, dated a few…

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Diversification: What Is It Good For?

Diversification: What Is It Good For?

The investing world can be a complicated place. There are two main approaches to portfolio management when it comes to concentration. The first approach is broad diversification, favoured by value investors such as Benjamin Graham (Graham’s advice of having a well-diversified portfolio of 30 or more deep value stocks) and more recently Noble Prize winning economist Harry Markowitz in his Modern Portfolio Theory, and Dr John Lintner, both of whom strongly advocated diversification. On the other hand, there’s the highly concentrated…

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If You Want Growth, Avoid Dividends

If You Want Growth, Avoid Dividends

In my experience, there is one big difference between the equity markets of the UK and the US: dividends. For example, in the UK it’s pretty easy to find a large-cap stock with a dividend yield of more than 5%. A quick screen for companies with a market cap. in excess of £5bn that yield of 5% or more returns 12 results in a universe of 2733 stocks. More than half of these are FTSE 100 constituents. The FTSE 100’s average…

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The 6 General Principles Of Value Investing

The 6 General Principles Of Value Investing

First published at ValueWalk.com What are the fundamental principles of value investing and how should you interpret them? Joseph Calandro, Jr., a Managing Director of a global consulting firm, Fellow of the Gabelli Center for Global Security Analysis at Fordham University, author of Applied Value Investing, and a Contributing Editor of Strategy & Leadership, published a paper earlier this year that seeks to answer this question. I should say now that this is only a brief summary of the paper…

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Ben Graham Lecture Notes

Ben Graham Lecture Notes

I recently stumbled across collection of notes from Benjamin Graham’s lectures when he was a professor at Columbia University. The notes were taken during lectures given in 1946, six years after the 1940 version of “Security Analysis” was published. Actually, the name of the course was “Current Problems in Security Analysis”, and was, in Graham’s words an“attempt to bring our textbook ” Security Analysis” up to date, in the light of the experience of the last six years since the…

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