My two cents on Buffett:
Reading both Graham and Fisher has helped me understand Buffett's
approach much more than I did just from reading American Capitalist
and the annual reports. I guess I took the same approach Buffett
did, studying Graham first, then reading Fisher. Now, every one
of Buffett's purchases make sense from a value perspective, if
not a strict Graham value perspective. The fact that he has NEVER
had a down year over such a long period of time while averaging something like 28% returns is the only proof needed that he's the greatest investor ever.
Now, can we apply his methods? I'm not sure. I mean, Buffett, despite
his hands-off approach, is not totally uninvolved in the management.
The newspapers are good examples, but it seems that all his businesses move to new levels of achievement in terms of cash flow, returns
to shareholders, and cash flow after he's on board. Heck, I know
what would've happened if I'd bought the Buffalo newspaper - zippo.
Further the guy is a certified genius who's talent is in shareholder
returns. Would he have made a good neurosurgeon or psychiatrist? Not necessarily. Should I expect to do as well as him without his specific talent? Not at all.
To each his own talents. I'm just content to sit back and dissect
each move he's made now. I mean, his movement into bonds (zeroes
no less) was incredibly prescient. Throughout the huge 20 year run up in stocks he held on, then makes a massive switch
to zeroes within months of the uncoupling of the stock and bond
markets. Wow.
Good Investing,
Mike |
