Warren Buffett

Benjamin Graham

Berkshire Hathaway


Investment techniques

Book Reviews


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28th January Newsletter

In this issue:

The top business leaders
good story on value investing
The trend towards the home-building industry
Respect - Berkshire Hathawayt comes in at number 8
No stock splits
Golden Western Financial - as good as Buffett?
Value investing, by Janet Rowe

The top business leaders

Warren Buffett is amongst 25 luminaries named by the University of Pennsylvania’s Wharton School in its list of the top business leaders since 1975. The list includes:

Jeff Bezos, Amazon.com
John Bogle, the Vanguard Group
Warren Buffett
Michael Dell, Dell Computers
Bill Gates
Louis Gerstner, IBM
Alan Greenspan
Steve Jobs, Apple Computers
Peter Lynch, Fidelity Magellan Fund
Frederick Smith, Federal Express
Ted Turner
Jack Welch, General Electric
Oprah Winfrey

Good story on value investing

The Globe and Mail has a good story on value investing with some stocks highlighted. For the article go here.

The trend towards the home building industry

It looks as if Berkshire Hathaway will succeed in its bid to buy mobile homes building company Oakwood Homes Corporation after a bankruptcy court formally approved Berkshire’s bid.

As the company recently purchased homebuilder Clayton Homes, this suggests confidence in the residential industry, particularly having regard to Berkshire’s association with other businesses in the home building or home contents sectors.

Respect – Berkshire Hathaway comes in Number 8

A survey of top Chief Executive Officers ranks Berkshire Hathaway 8th amongst the world’s most respected companies. According to a report in the Austin Business Journal, the top 10 are:

1. General Electric Co
2. Microsoft
3. Toyota Motor Corp
4. IBM Corp.
5. Wal-Mart Stores Inc.
6. Coca-Cola Co.
7. Dell
8. Berkshire Hathaway Inc.
9. DaimlerChrysler AG
10. Sony Corp.

In the ranking of CEO’S, Warren Buffett came in second behind Bill Gates.

No stock splits

In a recent article, looking at small cap stocks, John W Rogers Jr recommends advertising company Grey Global Group, which he describes as Berkshire Hathaway like in its refusal to get involved in stock splitting. The full article can be found here.

Golden Western Financial – as good as Buffett?

In a recent interview, Marion and Herb Sandler, joint CEO’S OF Golden Western Financial Corp, claim that their company has compounded its earnings at a rate over 20 per cent in the last 35 years, a record they say is equaled only by that of Berkshire Hathaway. The company is the parent company of the World Savings Bank, one of America’s biggest savings and loans. The full article is well worth reading for the financial philosophy of the Sandlers. Go here


Value Investing by Janet Lowe

This book is a little gem for anybody who has difficulties in understanding the investment philosophy of Benjamin Graham.

Lowe, who has written extensively on Graham, explains many of the investment terms and strategies given by Graham in his writings and relates them to current and up to date business situations. She explains to the reader what value investment is and its connection to both company growth and intrinsic value.

A particularly good chapter is the one on how to identify growth from the income statements because, as readers are well aware, Warren Buffett’s particular gift has been in finding companies selling at Graham prices but with great growth potential.

This book has been criticised as being too simple for anyone with a sound knowledge of investment principles. We agree; it is for those people who do not yet have an understanding of Graham and Buffett investment techniques. For those in this niche, it is a good start.

Another criticism is that the author wrongly suggests that Buffett supports diversification in stocks. Technically, this is true. Warren has on several occasions suggested that investors concentrate on just a few stocks. This does not however mean that Buffett is against diversification per se. If you look at the investments of Berkshire Hathaway, you will find, although only a few stocks, a wide diversification across industries.

The book is easy to understand for even the most basic of investors, and is well researched. The index, like many these days, leaves a lot to be desired. HIGHLY RECOMMENDED FOR BEGINNING INVESTORS.

Purchase from Amazon.com

Best wishes,
Warren Buffett Secrets

website: www.buffettsecrets.com
email: [email protected]