Alice Schroeder On Warren Buffett From The Value Investing Congress (2008)
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In the spirit of the upcoming Value Investing Congress which I plan on attending and reporting from, I found some interesting videos from the previous Congress in 2008 which I wanted to share. I discovered a total of 11 videos on the internet. Most of them are quite interesting, and informative.
I wrote about a brief summary of each video which I will be posting over the next few days, and embedded the video below.
It is important for context to understand that the conference took place in late 2008 at the height of the financial crisis.
In a time dominated by economic concerns, successful investors like Warren Buffett are worth studying. At the value investing congress in 2008, Alice Schroeder, the author of the best selling biography of Buffett The Snowball, summarized her conclusions about the secret of his success.
She started her study by looking for a secret. Did Buffett have the Holy Grail of value investing hidden in some ancient crypt in his office? No, he did not. Instead of secrets, she found a very intelligent man with a photographic memory who worked hard.
His father was a stockbroker and young Warren loved to spend time in his office and see how it operated. He learned to appreciate and recognize value the same way a rancher’s son learns to appreciate and recognize a good horse. In fact, he often compares his initial assessment of an investment to handicapping a horse. He knows exactly what to look for and what he wants in return for his investment, typically fifteen percent.
He also knows what he does not want, a catastrophic loss. Warren Buffett learned to do his homework and substitute hard work for risk. Beginning in the 1950s, the pre-digital age, he combed libraries, investment records and public documents looking for the actual history of the company he was considering.
If it lacked a history, that was a factor against it. One start-up company took on IBM with a degree of initial success, but Buffett passed on any investment in it because he had studied IBM enough to know its strength and the fact that new companies seldom last long against strong, established businesses.
The new company, however, prospered and came back a couple of years later. Buffett had watched their progress carefully and studied them too. He liked what he saw and invested in them. They were no longer upstart Davids trying to challenge an established Goliath. The catastrophic risk was reduced and the company had accumulated value, which could be proven by its history.
Buffett still takes the long view. Rather than “projecting” or “modeling” a proposed company’s value, Buffett likes to see where they have been and what they have done before committing his funds. He continues to work hard, do his own research and trust his own decisions. That is the real secret of his The Snowballof success.
In a time dominated by economic concerns, successful investors like Warren Buffett are worth studying. At the value investing congress in 2008, Alice Schroeder, the author of the best selling biography of Buffett The Snowball, summarized her conclusions about the secret of his success.
