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Strategies & Market Trends : Buffettology -- Ignore unavailable to you. Want to Upgrade?

To: Robert Douglas who wrote (251)	8/18/1998 6:40:00 PM
From: Freedom Fighter	Respond to of 4691

Robert, >>Wayne thanks for the link to the Hussman article. It reminded me of an article I read by Warren Buffett (no surprise) back in the early 1980's. In the article Mr. Buffett pegged the rate of return on equity for American business as always trending toward 12%. Given a dividend payout norm of 50%, (was the norm at the time) Mr. Buffett's numbers would produce a long term rate of growth of 6%. This is exactly the same number Hussman uses in his article. Of course my memory may not be perfect, but I distinctly remember that 12% number.<< You're very welcome. The model and thought process in the article is very similar to one of the ones that I use. I think it is very helpful to think in a lot of different ways. The 12% number you recall is correct but I believe he has since talked about 14% being the average. (prior to the last couple of years). Wayne Crimi Value Investor Workshop members.aol.com

To: Robert Douglas who wrote (251)	8/21/1998 1:04:00 PM
From: Robert Douglas	Read Replies (2) \| Respond to of 4691

When I think of Warren Buffett and why he has been so successful, I don't think of a particular type of stock that meets the criteria set out in book about his life. That would be like analyzing the Sistine Chapel with a spectrograph and a software program on painting techniques. Mr. Buffett's work is art and not science. When I try to emulate him, I do so in ways that make sense to me. For example, heeding his admonition to stay within your circle of expertise or buying a piece of a business. This is my take on Buffett and not some rigid rules on return on equity. You would certainly have a hard time explaining his investments in zero coupons and silver by the formula found in a book. I'm new to this thread, and don't want to be an obnoxious guest, but I would love to see some new ideas on investments that are simple and easy to understand. Buffett type ideas, you know, they just make good old-fashioned sense. -Robert