The Warren Buffett Stock Portfolio: Warren Buffett Stock Picks: Why and When He Is Investing in Them by Mary BuffettBestselling authors Mary Buffett and David Clark examine seventeen companies that Warren Buffett has bought for himself and for his holding company, Berkshire Hathaway, as durable investments and explain why these companies are once again selling at prices that offer great long-term growth prospects.
Warren Buffett has always believed that the time to buy stocks is when nobody else wants them. As we enter the fifth year of what many economists are calling the Great Recession, we find that some of the most amazing businesses—those with a durable competitive advantage—are trading at prices and price-to-earnings ratios that offer investors serious long-term moneymaking opportunities. Pessimism about the banking situation in Europe and unemployment in America have created the perfect storm to bring stock prices down and present value-oriented investors some great possibilities.
In Warren Buffett’s world, as stock prices decrease, the prospects for investment increase. Putting a number on those prospects tells Warren whether or not the stock is an attractive buy. The Warren Buffett Stock Portfolio explains how to do just that—how to value companies and conservatively estimate the kind of future return that an investment is offering at its current market price. Mary Buffett and David Clark look at stocks in Warren’s portfolio as the basis for their analysis.
After a brief history of Warren’s investment strategy, Buffett and Clark explain how to interpret a company’s per-share earnings and per-share book-value histories to quickly identify which companies have a durable competitive advantage and to project the compounding annual rate of return that an investment offers. The authors provide case studies and evaluations of seventeen companies in Warren Buffett’s portfolio.
The Warren Buffett Stock Portfolio is a valuable companion to the other books in Buffett and Clark’s successful series—Buffettology, The Buffettology Workbook, The New Buffettology, The Tao of Warren Buffett, Warren Buffett and the Interpretation of Financial Statements, Warren Buffett’s Management Secrets, and Warren Buffett and the Art of Stock Arbitrage.
Buy and Hold Definition
Many legendary investors such as Warren Buffett and Jack Bogle praise the buy-and-hold approach as ideal for individuals seeking healthy long-term returns. Conventional investing wisdom shows that with a long time horizon, equities render a higher return than other asset classes such as bonds. There is, however, some debate over whether a buy-and-hold strategy is superior to an active investing strategy. Both sides have valid arguments, but a buy-and-hold strategy has tax benefits because the investor can defer capital gains taxes on long-term investments. To purchase shares of common stock is to take ownership of a company. Shareholders vote on critical issues, such as mergers and acquisitions , and elect directors to the board.
Warren Buffett is positioned as the single biggest proponent of value investing and buy and holding—accurate or not. Like Sir Galahad, he has achieved his real Holy Grail, and I am the first to salute his immense success. However, can you achieve what he has via insurance companies and arcane tax advantages? He is the classic exception to the rule. If Buffett was forthright at first, what made him change two weeks later and create an instrument so complicated and secretive not even his press release could explain it? Even more confusing is that Buffett contradicted himself a year later, lambasting with vigor his financial Frankenstein creation:. In the Warren Buffett investment strategy was again trading derivatives, and helping to promote government bailouts.
A lot of cash
Warren Buffett's Advice: Why You Should Buy and Hold
He's also a bit of a philosopher. Buffett pares down his investment ideas into simple, memorable sound bites. Do you know what his homespun sayings really mean? Does his philosophy hold up in today's difficult environment? Find out below. So how can he tell us to never lose money? He's referring to the mindset of a sensible investor.
It has everything to do with opportunity. To be sure, Berkshire Hathaway isn't the only company sitting on huge piles of cash. As he famously stated in his letter to shareholders : "Cash does not make us happy. Currently, however, we see nothing on the horizon. Warren Buffett is an investor.
Advertiser Disclosure: The credit card offers that appear on this site are from credit card companies from which MoneyCrashers. This compensation may impact how and where products appear on this site, including, for example, the order in which they appear on category pages. Advertiser partners include American Express, Chase, U. Bank, and Barclaycard, among others. That may be a bold statement to make, but once you understand his actual techniques of accumulating wealth, then you will be able to begin running your own investments in a similar way. Buffett is not investor — he is an owner.