Any of my typical readers will realize this is not a typical post of mine. However, in honor of the Berkshire Hathaway meeting taking place in Omaha I decided to post a short article about Buffett. Here are three simple lessons we should all learn from the master himself Warren Buffett.
The Recession and Value Investing
One of the positives about the economic situation is that there isn’t a better time to do value investing. Financial experts realize that many people can increase their wealth in boom time, but some people can get fabulously wealthy during bust times. The reason for that is when a recession or depression happens; many quality stocks become undervalued even when their fundamentals are strong. In a time period when many good, solid, stocks are trading at discounts to their actual intrinsic worth, now is the time to buy, not to sell, especially as the recovery takes hold and the stock prices climb.
Michael Mauboussin: Here’s what active managers can do
The debate over active versus passive management continues as trends show the ongoing shift from active into passive funds. Q2 2020 hedge fund letters, conferences and more At the Morningstar Investment Conference, Michael Mauboussin of Counterpoint Global argued that the rise of index funds has made it more difficult to be an active manager. Drawing Read More
Take a Tip from Warren Buffett
One of the biggest geniuses in value investing is Warren Buffett of Berkshire Hathaway. He has made 60 billion dollars in the last 50 years of investing using a value investing strategy. He is known for spotting a good deal long before anyone else and it has made him fabulously wealthy. When Warren Buffett starts to buy a stock, it’s likely many others take their cue from him and buy it too. The strategy is not one of quick and easy gains, but thoughtful analysis and then long-term stellar gains. His motto is to buy quality stocks at discount prices.
Things that Buffet Has Invested In
Buffett’s lineup of investments sounds quite boring to a market timer. That’s because he’s not trying to find the latest and greatest trend, he’s finding value companies that he can invest in and then expect growth for decades afterwards. Types of companies that have fit into this model in the past are GEICO car insurance and Fruit of the Loom underwear. These days, he’s investing in railroads, although few people can figure out why. It’s possible he sees an increase in rail travel as gas gets more expensive, or he’s spotting some other trend related to transportation. With a track record as good as his, whether anyone understands what motivates a stock pick or not, it’s usually based on sound value investing, if it’s coming from Warren Buffett.