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  • 1. Warren E. Buffet (second richest man in the world)
  • 2. Warren E. Buffett
    • Born : August 30, 1930 Omaha, Nebraska
    • Occupation: CEO, Berkshire Hathaway
    • Salary : 100,000 USD (2005)
    • Net worth : US$50 billion
  • 3.
    • 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.
  • 4.
    • 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
  • 5. 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
  • 6. Investments
    • American Express
    • M&T Bank
    • The Coca-Cola Company
    • The Washington Post Company
    • Procter & Gamble
    • PetroChina
    • ISCAR
  • 7. 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.
  • 8. Investment approach
    • modification of the value investing approach of his mentor Benjamin Graham .
  • 9. 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?
  • 10.
    • Brand Names
    • Understanding the company
    • Sticking to what you know
    • Company Growth
    • Sound management
  • 11.
    • "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
  • 12.