Warren Buffett

The World's Most Successful Investor: Success
Story and Key Teachings
Vadim Kotelnikov
Founder, Ten3 Business e-Coach – Inspiration
and Innovation Unlimited!
"Price is what you pay. Value is what you
get." – Warren Buffet
Buffett's Investment Criteria 2
Identifying an Outstanding Company
Buffett's Three Non-financial Investment
Criteria
1. It is simple and understandable.
2. It has a consistent operating history.
3. It has favorable long-term prospects.
Buffett's Four Financial Investment Criteria
1. Return of equity (not earning per share)
2. "Owner earning" (the share of profits that
belongs to investors).
3. Profit margins (which must be high)
4. Return on reinvested profits (which must create
at least $1 of market value for every dollar
invested)
8 Best Practices of Successful Companies
The Tree of Business Success
Balanced Business System
Buffett's 7 Contrarian Principles
Ignoring Convention
1. Do not follow the crowd. Ignore the market, the
crowd, and its fashions... More
Buffett's Five Tips for Individual Investors
1. "Look at stocks as parts of business. Ask
yourself, 'How would I feel if the Stock
Exchange was closing tomorrow for the next
three years?' If I am happy owning the stock
under that circumstance, I am happy with the
business. That frame of mind is important to
investing ."... More
Warren Buffett Quotes
Someone's sitting in the shade today because
someone planted a tree a long time ago.
Honesty is a very expensive gift, Don't expect it
from cheap people.
It takes 20 years to build a reputation and five
minutes to ruin it. If you think about that, you'll
do things differently... More
Case in Point
Buffett makes a $800 Million Investment
Decision Within 1 Day
Strategies of Market Leaders
Fast Company
Business Angels
Search for Investment Opportunities
Investment by Venture Capital Firms
10 Most Common IPR Mistakes During VC Due
Diligence
Think Pad Inc. – a Home Run (case study)
Corporate Investing in External Ventures
GE Equity (case study)
Nortel Telecom (case study)
Jokes
Unlucky VC Investor
The World's Most Successful Investor
Warren Buffett is the world's most successful
investor and a self-made billionaire. He is
consistently ranked among the world's Top 3
wealthiest people.
Buffett runs and owns about 31% of Berkshire
Hathway, a $136 billion investment company,
that has substantial stakes in Coca Cola, Wells
Fargo and American Express. A $1 investment
in Berkshire in 1965 would bring about $5,500
in 2005.
Since 1951, Buffett generated an average
annual return of about 31%. The average
annual return for the Standard & Poor's 500-
stock over that period is 11%.\
Warren Buffett's Investment Criteria
Warren Buffett was once asked what is the
most important thing he looks for when
evaluating a company to invest in. Without
hesitation, he replied, "sustainable competitive
advantage"... More
The Power of Focus
Warren Buffett says his companies ability to
generate large profits is the result of being able
to focus on what is important , and not paying
attention to things that would distract the
company.
Buffett's Teachings on Investment
Warren Buffett is the world's most successful
investor. "Buffett's teachings on investment
sound deceptively simple. But there is no
deception. They truly are simple . Do not allow
investment advisers to persuade you that
investment is a complex matter needing great
expertise. Instead, learn how to assess the
fundamental and financial values of a business
yourself, and invest according to your
convictions."
Ignoring Conventional Investment Guidelines
Warren Buffett believes that the conventional
approach to investment makes it difficult to
beat the market and easy to do worse. If you
wish to invest well you must be prepared to go
against the prevailing wisdom and ignore
conventional investment guidelines. You can
increase your chances of finding winning
stocks by adhering to Buffett's contrarian
principles.
Using the Probability Theory
Buffett is a master at the art of fast decision
making and arbitrage. The probability theory is
essential to Buffett's theory of investment:
"Take the probability of loss times the amount
of possible loss from the probability of gain
times the amount of possible gain. That it what
we're trying to do. It's imperfect, but that's
what it is all about."
Buffett uses essentially the same approach to
investment strategy and arbitrage. In both
cases "he buys into situations where the
probability is that shares are undervalued and
that this undervaluation will be corrected. The
difference is time-scale; the arbitrage position
will be closed out as soon as possible, while
the investment will be kept "indefinitely so long
as we expect the business to increase in
intrinsic value as a satisfactory rate." That
answers the question about how long Buffett
believes a share should be held: possibly
forever." 2
Relying On Gut Instinct
Bill Gates , Founder of Microsoft Corporation
and a Berkshire director, praises Buffett's hard-
to-imitate management style. "It's baffling to
think who else could do it," he says.
Warren Buffet spends most of his day alone in
an office with no computer. His desk isn't
littered with stock research. "I don't use
analysts or fortune tellers, " Buffett says. "If I
had to pick one, I don't know which it would
be." He deliberately keeps the outside world at
bay, believing it is the best way for him to
remain "rational" as an investor. If he is
interested in investing in a company, he studies
the financials himself. "All I have to do is think
and not be influenced by others," he says.
Warren Buffett "spends the better part of most
workdays thinking and reading. He fields a
handful of phone calls, and on most days, he
confers with the chiefs of of a few Berkshire
subsidiaries. He seldom holds meetings." 1
Making Fast Decisions
Warren Buffett "makes swift investment
decisions, steers clear of meetings and
advisers, eschews set procedures and doesn't
require frequent reports from managers.
Occasionally he picks up the phone, calls his
broker and trades $100 million or more of
stock." 1
When Buffett is buying stock, he pays little
attention to some factors that shape other
investors' decisions, such as economic climate.
He doesn't wait to see what government is
doing to make a trade. Buffet also can move
more quickly than his competitors. He has no
investment committee, and that allows him to
make immediate decisions... Case in Point
Hands-Off Management
Buffett believes that managers of the
companies he is investing in ought to be left to
run their businesses without interference from
him and without having to hew any to any
unifying corporate strategies or goals. "We
delegate to the point of abdication," Buffett
says in Berkshire's Owner's Manual.
Despite its investment size, Berkshire Hathways
has a tiny staff. It's headquarters is staffed by
just 17 employees. The company has no
public-relations, human-relations, investor-
relations, legal departments, or investment
committee. It holds no quarterly earning calls
for investors and analysts, has no asset
allocation guidelines, and gives no guidance on
future earnings. Warren Buffet tells the chiefs of
his business units not to produce any special
reports for him.
On occasion, when severe problems arise,
Buffett abandons his hands-off management
approach however.

AN Awesome WAY to make cOOl CasH LEARN HOW

posted from Bloggeroid