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    Wb Presentation Wb Presentation Presentation Transcript

    • Warren E. Buffet (second richest man in the world)
    • Warren E. Buffett
      • Born : August 30, 1930 Omaha, Nebraska
      • Occupation: CEO, Berkshire Hathaway
      • Salary : 100,000 USD (2005)
      • Net worth : US$50 billion
      • Began his career at the age of 11
      • he purchased three shares of Cities Service (Preferred )
      • first lesson he learnt that became his legendary investment strategy - which is essentially - patience pays, so buy them and hold them.
      • He figured out two other critical things about himself
      • - what he is good at and
      • - what he likes to do.
      • 1956 – formed the limited partnership
      • In nine years, Buffett turned a $105,000 into $26 million - a stunning 24,000 per cent increase
      • Initial investments - in textile companies, farm equipment manufacturers.
      • 1962 – purchased Berkshire Hathaway, a textile manufacturing firm
      • Berkshire Hathaway eventually turned to a Holding Company
    • Acquisitions of Berkshire
      • 1964 - National Indemnity.
      • 1972 - Candies for $25 million
      • 1983 - Nebraska Furniture Mart
      • 1989 – Borhseim
      • 1998 - Dairy Queen, Geico (Largest Operation), Net Jets and General Re Corp.
      • 2002 - Fruit of the Loom
    • Investments
      • American Express
      • M&T Bank
      • The Coca-Cola Company
      • The Washington Post Company
      • Procter & Gamble
      • PetroChina
      • ISCAR
    • Management style
      • views himself as a capital allocator
      • When Buffett acquires a controlling interest in a business, he makes clear to the owner the following:
        • not interfere with the running of the company.
        • responsible for hiring and setting the compensation of the top executive.
        • Capital allocated to the business will have a price tag attached.
    • Investment approach
      • modification of the value investing approach of his mentor Benjamin Graham .
    • Basic questions to ask
      • 1. Does the company sell brand name products that are likely to endure?
      • 2. Is the business of the company easily understood ?
      • 3. Does the company invest in and operate businesses within its area of expertise ?
      • 4. Does the company have the ability to maintain or increase profitability by raising prices?
      • 5. Is the company, looking at both long-term debt , and the current position, conservatively financed?
      • 6. Does the company show consistently high returns on equity and capital?
      • 7. Have the earnings per share and sales per share of the company shown consistent growth above market averages over a period of at least five years?
      • 8. Hs the company been buying back its shares , and if so, has it bought them responsibly
      • 9. Has management wisely used retained earnings to increase the rate of return to shareholders?
      • 10.Is the company likely to require large capital sums to ensure continuing profitability?
      • Brand Names
      • Understanding the company
      • Sticking to what you know
      • Company Growth
      • Sound management
      • "I look for something that I can understand to start with, there are all kinds of businesses I don't understand.“
      • conservative when speculation is rampant in the market and being aggressive when others are fearing for their capital
      • coined the term "economic moat," preferring to acquire companies that possess sustainable competitive advantages over their competitors
    •