Warren Buffett Tag Archive

Time is the important driver of investment returns

(Excerpt from The Psychology of Money by Morgan Housel) As I write this Warren Buffett’s net worth is $84.5 billion. Of that, $84.2 billion was accumulated after his 50th birthday. $81.5 billion came after he...

Investing, Nonlinearity Read More

Evaluate each business based on a couple of unique factors

(Excerpt from University of Berkshire Hathaway by Daniel Pecaut and Corey Wrenn) Each business will have a couple of unique factors that are essential in evaluating its progress. Often, those unique factors are not...

Investing Read More

This is probably why Buffett bought airlines

(Excerpt from University of Berkshire Hathaway by Daniel Pecaut and Corey Wrenn) Buffett said this is the number one question he would ask of himself: why is Berkshire investing in capital-intensive businesses?...

Investing Read More

A mistake is made if you had legit confidence about something but you fail to act big

(Extracted from University of Berkshire Hathaway by Daniel Pecaut and Corey Wrenn) Munger observed that the most extreme mistakes in Berkshire’s history show up as opportunity costs. … In his younger...

Circle of Competence, Investing, Kelly Criterion, Life Read More

Stock as a bond with an unknown coupon rate

(Extracted from University of Berkshire Hathaway by Daniel Pecaut and Corey Wrenn) Buffett explained that buying a business is much like buying a bond with no maturity and with a blank coupon. You must write...

Investing Read More

Book value is what you have put into the business

(Extracted from University of Berkshire Hathaway by Daniel Pecaut and Corey Wrenn) Buffett also noted that book value is seldom meaningful in analyzing the value of a business. Book value simply records what was put...

Investing Read More

Avoid expiring knowledge

(Extracted from Farnam Street – Compounding Knowledge) While most of us focus on consuming information that we won’t care about next month, let alone next year, Buffett focused on knowledge and companies that...

Half Life Read More

Investing up to 40% in one stock

“We diversify substantially less than most investment operations. We might invest up to 40% of our net worth in a single security under conditions coupling an extremely high probability that our facts and reasoning...

Focus, Investing Read More

Concentrate and bet big

In 1994, Charlie Munger was addressing a crowd at University of Southern California. (Extract from James Clear) When Warren lectures at business schools, he says, “I could improve your ultimate financial welfare...

Focus, Investing, Via Negativa Read More

Sure Money vs Big Money

(Extracted from Warren Buffett’s Ground Rules by Jeremy C. Miller) Buffett provided his most explicit recognition of this evolutionary transition in his fall letter of 1967. As he said then, The evaluation of...

Investing Read More