Warren Buffett Essays Pdf Examples

successful investing.The headings do however suggest the truth in the title, ie the book
is for managers as well as for investors.A new CEO could do worse that make this
his/her first read after appointment \u2013 particularly if, as Buffett says is generally the case,
they are good at their commercial discipline/endeavour, but do not really understand the
allocation of capital, which is of paramount importance to shareholders.

Chock-a-block with pithy wisdom

Buffett has a great way with words, borne no doubt from a lifetime of study and
commercial engagement/intercourse at the highest levels.Cunningham picks all this out
for us in his excellent introduction with such insights as: \u201chaving first rate people on the
team is more important than designing hierarchies and clarifying who reports to whom
about what and at what times\u201d (remember: Buffett runs a vary large corporate empire of
controlled companies);\u201cstay away from businesses without favourable anddurable
economic and competitive characteristics\u201d (Buffett has learned this the hard way); \u201c a
stock that has dropped very sharply compared to the market \u2026 becomes \u2018riskier\u2019 at the
lower price than it was at the higher price\u201d (another nail in the coffin of modern finance
when explaining the shortfalls ofbeta); and in reference to the hallowed principle of
diversification (see below) we are reminded that \u201cKeynes, who was not only a brilliant
economist but also an astute investor, believed that an investor should put fairly large
sums into two or three business he knows something about and whose management is
trustworthy.On that view, risk rises when investments and investment thinking are
spread too thin\u201d, which observation is linked to the \u201ccircle of competence\u201d concept,
which holds that investors should be aware of the scope of their competence and stay
within it \u2013 the primary reason why BH did not lose money in the tech wave, for as Buffett
acknowledged, he did not understand it, and with a fermenting industry like technology
his attitude is much the same as with space exploration \u201cwe applaud the endeavour but
prefer to skip the ride\u201d; and finally \u201cas happens in Wall Street all too often, what the wise
do in the beginning, fools do in the end\u201d.

In revisiting these observations from the world\u2019s greatest investor, I am reminded of the
constant use of Buffett quotes by fund managers and financial planning groups as
justification for their approach and products.The reality is that Buffett believes, as is
pointed out in one of his letters, that most investors would do well to avoid actively
managed funds (admittedly in the US context), and to simply put their money into the
index \u2013 unless they can just focus on what they know, avoid undue diversification into
unknown areas, and apply all the principles it has taken him a lifetime to learn from the
worlds masters (eg, Graham and Dodd)!

Again, Buffett is often used as justification for never trying to time the market \u2013 just hang
in there and hope for the best, as no-one can call it.But even here, his writings have, it
seems to me, been quoted out of context.His actual approach to market timing is far
more sophisticated and pro-active.Indeed, as is pointed out in Hagstrom\u2019s book (The

Essential Buffett), Buffett closed his first investment partnership in 1969 and paid out

funds, for the reason that he found the market to be highly speculative and worthwhilevalue increasingly scarce (p 26).Buffett refers to the super-contagious diseases of fearand greed and says that he never tries to \u201canticipate the arrival and departure of either

Нет, сэр. Какой номер вы набираете? - Сеньор Ролдан не потерпит сегодня больше никаких трюков. - 34-62-10, - ответили на другом конце провода. Ролдан нахмурился. Голос показался ему отдаленно знакомым.

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