TonyCinTX

What's Buffett's Ideology?

Buffett's ideology is pretty simple; he invests in many things that he believes have a high probability of success. Over the decades, two things have happened.

First, although at core he remains a "value" investor, experience, losses, and successes which he had avoided have refined his ability to judge value, and see what is important. He summarizes this in every annual letter to shareholders.

Second, with wealth and backing, he has found new opportunities unavailable to him as a younger man, simply because a guy with billions can solve thorny problems which cannot be solved by a guy with a few million.

I don't understand this obsession with Buffett's "ideology." How many times must he elucidate it? He says he often knows within ten minutes whether he is interested in an investment or not. What can he possibly be looking at in ten minutes?

I will tell you: Who is buying the product and why? What are the margins? Where is the protection? Who is the competition? Why *this* company instead of them? What makes this company special, protected, or the most certain to succeed?

It isn't rocket science. If anything, I'd say the one thing Buffett has that other investors do not is self-discipline. Buffett can sit on forty billion dollars for a *year* without feeling compelled to *do* something with it. What Buffett has is the ability to wait, and wait, and wait, and still recognize and execute quickly when he sees an insanely low risk/reward ratio.

99.9% of investment managers are not willing to tell their clients, "We didn't see anything worth doing this year. Not one darn thing. So we sat on your money. Maybe next year!"

Buffett is so willing, and quite explicitly.

Why Is Everybody Selling as Buffett Is Loading Up?

birder: BRK-B is $4650 a share. Plebian shareholders can get such a good deal. Half my portfolio is BRK-B, and it is on track or ahead of schedule for a compounded 10.7% annual return for the last five years.

Buffett takes a mere $100,000 annual salary and no stock options or anything else. 99.99999% of his billions comes from his share of Berkshire. BRK-B is directly tied to the price of BRK-A (1/30th of a share of BRK-A). That means his interests are directly aligned with those of his shareholders, he doesn't make any money unless you do.

So the average shareholder can indeed get exactly the same deal as Buffett, he uses the power of bulk buying and big deals to benefit all of us. I think it is hilarious how many pundits out there are constantly telling us how to invest like Buffett, or what the next Berkshire Hathaway is, when the original is still available and still delivering exactly what he has always delivered; the best business analysis, investment and negotiation brain on the planet.