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W A R R E N  B U F F E T
 

W A R R E N B U F F E T

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Introduction,contribution, strategies, guidelines,

Introduction,contribution, strategies, guidelines,


----R.B.M.I-----

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    W A R R E N  B U F F E T W A R R E N B U F F E T Presentation Transcript

    • WARREN BUFFET Group Member Richa Saxena Shivani Mishra
    • Famous for :
      • The successful Berkshire Hathaway Company, being one of the richest men in the world, and for being a generous philanthropist.
    • Buffet details :
      • Born - August 30, 1930 Omaha, Nebraska,  USA  / Lives - United States of America – Omaha
      • Buffett's father, Howard was a stockbroker and also became a member of congress.
      • Warren Buffett showed early signs of being entrepreneurial through being involved in various business dealings as a child, including purchasing bottles of cola cheaply and selling them for a profit. He also made his first investment in the stock market when he was just 11 years old.
      • Buffett began studying at the Wharton School of Finance at the University of Pennsylvania, but transferred to the University of Nebraska where he graduated. He then went on to the Columbia University to do a Masters in economics.
      • The mentor of warren buffet was Ben Graham
    • Buffet’s Generosity
      • Warren Buffet Gives Away his Billions to the Bill & Melinda Gates Foundation
      • His largest charitable donation was to be upon his death when he had planned to give 99% of his massive fortune to the foundation.
    • Warren Buffett’s Investing Questions
      • Before Warren Buffett invests a dime, he asks:
      • Is the company in an industry with good economics? That is, is it not in an industry competing on price?   
      • Does the company have a consumer monopoly or brand name that commands loyalty?   
      • Can anyone with an abundance of resources compete successfully with the company?   
      • Are the earnings on an upward trend with good and consistent profit margins?   
      • Is the debt-to-equity ratio low, or is the earnings-to-debt ratio high? Can the company repay debt even in years when earnings are lower than average?   
      • Does the company have high and consistent returns on invested capital?   
      • Does the company retain earnings for growth?   
      • Does the business have high maintenance cost of operations, high capital expenditure or investment cash outflow? (If so, that’s not good.)   
      • Does the company reinvest earnings in good business opportunities? Does management have a good track record of profiting from these investments?   
      • Is the company free to adjust prices for inflation?
      • In short, he makes companies jump through a lot of hoops before he considers putting them in his portfolio.
    • Warren Buffett’s Investment Strategy & The Economic Downturn
      • First, he knows that nobody can accurately or consistently predict something as big, diverse and dynamic as the global economy.   
      • Secondly, he knows that even if you somehow knew what was going to happen in the economy, you still wouldn’t necessarily know what is about to happen in the stock market. Perversely, stocks sometimes fall during good times. They often rally during bad times.   
      • Thirdly, Buffett knows that the stock market is a discounting mechanism. It takes the news and reflects it into stock prices immediately. Who in their right mind would sell their stocks today because he realizes the economy is slowing down? We’ve known that for months now.
    • Warren Buffet's Six Investment Principles
      • Has the company's performance been consistently good?
      • Does the company carry too much debt compared to its peers?
      • Are profit margins high compared to its peers? Are they increasing?
      • How long has the company been public?
      • Are the company's products vulnerable to "commodity pricing"?
      • And finally, is the company cheap on a valuation level?
      • Some Very Interesting Aspects Of His Life
      • He bought his first share at age 11 and he now regrets that he started too late!
        • Things were very cheap that time
        • Encourage your children to invest
      • He bought a small farm at age 14 with savings from delivering newspapers.
        • One could have bought many things with little savings
        • Encourage your children to start some kind of business
      • He still lives in the same small 3-bedroom house in mid-town Omaha , that he bought after he got married 50 years ago. He says that he has everything he needs in that house. His house does not have a wall or a fence.
      • Don't buy more than what you "really need" and encourage your children to do and think the same
      • He drives his own car everywhere and does not have a driver or security people around him.
        • You are what you are
      • He never travels by private jet, although he owns the world's largest private jet company.
        • Always think how you can accomplish things economically
      • His company, Berkshire Hathaway, owns 63 companies. He writes only one letter each year to the CEOs of these companies, giving them goals for the year. He never holds meetings or calls them on a regular basis.
      • Assign the right people to the right jobs
      • He has given his CEO's only two rules.
        • Rule number 1 : do not lose any of your share holder's money.
        • Rule number 2 : Do not forget rule number 1.
        • Set goals and make sure people focus on them
      • He does not socialize with the high society crowd. His past time after he gets home is to make himself some pop corn and watch Television.
        • Don't try to show off, just be your self and do what you enjoy doing
      • Warren Buffet does not carry a cell phone, nor has a computer on his desk.
      • Bill Gates, the world's richest man met him for the first time only 5 years ago. Bill Gates did not think he had anything in common with Warren Buffet. So he had scheduled his meeting only for half hour. But when Gates met him, the meeting lasted for ten hours and Bill Gates became a devotee of Warren Buffet.
      • His advice to young people:
      • "Stay away from credit cards (bank loans) and invest in yourself and Remember:
        • Money doesn't create man but it is the man who created money.
        • Live your life as simple as you are.
        • Don't do what others say, just listen them, but do what you feel good.
        • Don't go on brand name; just wear those things in which you feel comfortable.
        • Don't waste your money on unnecessary things; just spend on them who really in need rather.
        • After all it's your life then why give chance to others to rule our life."
    •   Warren Buffett Quotes
      • Wide diversification is only required when investors do not understand what they are doing.   Stock Market  -  Investing  -  Knowledge
      • Only buy something that you'd be perfectly happy to hold if the market shut down for 10 years.   Stock Market  -  Long Term Investing  
      • We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful. Greed  -  Fear  -  Investing
      • Why not invest your assets in the companies you really like? As Mae West said, "Too much of a good thing can be wonderful".   Investing  -  Assets
      • Your premium brand had better be delivering something special, or it's not going to get the business.   Branding  
      • Our favorite holding period is forever.   Long Term Investing
    •