Last week, Warren Buffett had an interview at Omaha with (who else) Becky Quick of CNBC. For the transcript and video, you can visit the following pages:
There was one portion which made a great impression on me:
BUFFETT: I mean, if you’ve got a great deal in this country, you don’t have to go to Beijing, you know, or the Middle East to find somebody with money to fund it. It’s like when oil prospectors would come up here from Texas and they’d say, `We got a wonderful deal for you in Texas,’ I always thought, there are all these oil men in Texas, you know, why didn’t they call on them?
QUICK: So you think the sovereign wealth funds are getting the raw end of the deal when they buy into some of the financials?
BUFFETT: I think that they are buying what is being sold to them, and in securities you should not buy what’s being sold to you. You should buy what comes from your own analysis and looks the cheapest. The idea that somebody is going to come and call on you and say, you know, `Buy $2 billion worth–this is the best thing to buy in the world,’ it isn’t the best thing to buy in the world.
The best thing to buy in the world is something that you’ve dug out and that people aren’t talking about and that, you know, you find yourself. Securities that are being sold to you have a special push in it. Usually, there’s extra commissions in them or all kinds of things. So I don’t–I don’t want to get ideas from other people, basically. I want to get ideas from a bunch of facts that I uncover someplace.
Moral of this story: Always do your own homework when it comes to investing!
I haven’t had time to update the blog for sometime as I was overseas for a short while.
Thought I drop in for a quick update of an event that’s happening in Singapore.
Robert Miles, an expert on Warren Buffett, will be in Singapore to give a couple of talks at the Invest Fair 08. This event will be held over the coming weekend at Suntec Convention Center.
For more details about this event, you can refer to the Invest Fair website.
This year’s “Power Lunch with Warren Buffett” charity auction has been won by Zhao Danyang of the Hong-Kong based Pure Heart China Growth Investment Fundwith a record high bid of $2,110,100.
Zhao is an early investor in China’s class-A shares and has an investment philosophy very similar to Warren Buffett.
He has previously liquidated all five of his firm’s mainland funds to lock in profits from China’s market enormous gains. He started selling when price to earnings ratio grew too high.
Bidding has begun for this year’s “Power Lunch” with Warren Buffett. The proceeds from the auction will go to the San Francisco’s Glide Foundation.
The online auction is being hosted by eBay as part of its Giving Works initiative and ends at 10pm ET this coming Sunday, June 27. Bidders must pre-qualify before they can bid.
Based on the bidding from previous years, the final bid should easily go into six figures. However, Warren Buffett does come with “free shipping” according to the auction site.
Last year highest bid of $650,100 came from Mohnish Pabrai and co-bidder Guy Spier.
For the not-so-rich, you can bid on a Monopoly board and box signed by Warren Buffett.
The auction for the Monopoly board ends Wednesday, June 25, just before 3:30pm ET while the auction for the Monopoly box finishes Thursday, June 26, just after 6:30pm ET.
A few days ago, 90 MBA students were at IMD Business School in Lausanne for an interview session by MBA Programme Director Benoît Leleux with his two guests Warren Buffett and Israeli family business ISCAR Chairman Eitan Wertheimer.
You can also watch the 42-minute video of the entire session here:
I have also compiled and rephrased some of the questions posed to Warren Buffett and his replies below.
How do you manage all your companies?
I don’t. The key to management is about getting things done by other people. I can’t run those business as I don’t know a thing about them. I have managers I don’t see for three or four years. On the other hand, there’s one I talk to every day. We have no company meetings.
Warren Buffett said that the Canadian dollar is likely to outperfom the U.S. dollar in coming years. He himself had bought a couple of billion dollars worth of Canadian currency some time ago. However, he regreted that he didn’t buy more and kept them longer. He also continues to hold the Brazilian real.
It appears the federal government is likely to follow policies that will make the dollar even weaker. Warren Buffett continues his bearish stance on the U.S. dollar but does not feel the need to hedge on other currencies.
As a result of the weakening U.S dollar, Warren Buffett said he was happy to invest in overseas companies as currencies in those countries are not likely to decrease relative to the U.S. dollar.
Last Saturday morning at Berkshire Hathaway’s annual meeting, CEO Warren Buffett and vice chairman Charlie Munger answered questions from the Berkshire shareholders. Here are some of their comments.
On Future Returns
Buffett: We would be very happy if we earned 10%, pre-tax. Anyone that expects us to come close to replicating the past should sell their stock; it isn’t going to happen. We’ll get decent results over time, but not indecent results.
Warren Buffett once again shows his preference for investing in easy to understand businesses when he teams up with candy maker Mars to buy Wm Wrigley Jr, the world’s largest chewing gum meaker for US$23 billion.
The recently announced deal meant that Berkshire Hathaway will have a minority stake in Wrigley. The purchase price of US$80 a share is a 28 per cent premium over Wrigley’s closing price of US$62.45 last Friday.
In early April, Warren Buffett invited 150 students from the University of Pennsylvania’s Wharton School to his premise. Fortune Magazine was also invited to sit in with the chance for an interview. The following were covered in the session:
Why the efficient market theory is misguided.
Why it is very difficult to regulate people.
His thoughts about the election.
His first job.
How he gets his ideas.
His advice to you if you are not a professional investor.
The extreme leveraging in the current turmoil.
The impossibility of understanding CDOs.
I always say you should get greedy when others are fearful and fearful when others are greedy. But that’s too much to expect. Of course, you shouldn’t get greedy when others get greedy and fearful when others get fearful. At a minimum, try to stay away from that.
