Invest like Buffett?

[Xan]

Buffet's always had inside info starting with his father, a congressman. His companies sell unhealthy food (See's candy, coke, McDs) and he product places these in interviews. Not sure he's a God. But good on him for admitting taxes are too low

It makes my blood boil when he says that about taxes. He is welcome to contribute however much he wants to the federal government. Does he believe that's the best use of his money? No! Or else he would be doing it! So he's a) a hypocrite and b) he's advocating for the government to come and take more of MY money. What a jerk.

[dualstow]

I dont have enough info to know, if he'd still be a billionaire had he been born in the ghetto. Not that it matters, its just interesting how people want to believe that Buffett's so much smarter than they are

Well, you may be right. Everyone loves a success story, especially when the succeeder is such a decent person. I wanted to believe that about Alan Greenspan, because it was comforting. Now I can't bear to listen to him, even though he may be very smart.

Still, W.B. has an amazing and long track record. The latest decade may be lackluster, but that's just the latest decade. Plenty of investors look good early on and then make massive mistakes. W.B. hasn't really had any disastrous ones. Bill Gates and others had incredible advantages -- it's all detailed in the Malcolm Gladwell book. But, not everyone given the same advantages and conditions would have also succeeded to such an extent for so long.

There's no shortage of sour grapes on Buffett over at B'heads. Oh well.

[boglerdude]

> What do you think is fair?

Were it up to me Id triple taxes and throw it all at cancer research.

I suppose the questions are, at what point do taxes destroy wealth, and when do we throw the poor to the wolves. Is there enough wealth in the world to give everyone a minimum standard of living? Seems like there is enough land, and enough food production capacity...

[Kriegsspiel]

Is there enough wealth in the world to give everyone a minimum standard of living?

I don't know about the WORLD, but I think the US does about as good as is possible right now with it. It depends on how you define the terms.

Seems like there is enough land

Well... I'd say "kind of." You can buy land or a house for about a week's wages (2016 median personal wage in the US was about $600/wk or $31,000/yr) in undesirable places like the New Mexican desert and the ghettos of Detroit & St. Louis. Bump your price range up to $10,000 and you open up a lot more places if you're also willing to put in some sweat equity.

But in some places, I don't think you could ethically/practically "give" (guarantee) someone minimally acceptable housing at a price they could/would pay.

and enough food production capacity...

Personally, I think our food production situation is pretty precarious.

BUT

Yes, currently food is hilariously cheap in the US. And if we're talking a minimum standard of living, that's like $60 a month for 2000 cal/day of beans and rice, plus a touch of milk and some vegetables. If someone were to opt for the "minimum standard" housing option in, say, Ohio, you could even grow food (search "half farmer half x").

[dualstow]

McDouble is 'cheapest and most nutritious food in human history'
https://www.telegraph.co.uk/foodanddrin ... story.html

[Kriegsspiel]

I once looked into how a Big Mac and equivalent macronutrients coming from "clean" bodybuilder foods like peanut butter, oats, and chicken compared. IIRC (!) the Big Mac had either the same or more micronutrients.

[jhogue]

Warren Buffett has become a plutocrat, plain and simple. Once upon a time, he made a fortune by shrewd value investing. More recently, his methods have changed.

Take his $5 billion investment in Bank of America in the depths of the Great Recession: Buffett did not simply buy common shares in the open market, where the stock price at the time reflected fallout from the bank’s poor investments in a failing California mortgage company and an ailing Merrill Lynch brokerage firm. Instead, BofA’s CEO Brian Moynihan created new classes of 10 year/10% p.a. preferred shares and stock warrants in exchange for the sage of Omaha’s very public stamp of approval. Heads he wins/ Tails he wins. Because of his frequent conversations with financial industry insiders like Goldman Sachs CEO Lloyd Blankfein and US Treasury Secretary Hank Paulson, Buffett had unique actionable intelligence on TARP bailouts, the state of health of TBTF banks like BofA , and the plans of federal officials who regulate the banks. Don’t kid yourself, Buffett’s money is not at risk in the same way yours and mine is.

Note too that while Buffett likes to portray himself as a champion of stock investing, he actually keeps a $100 billion pile of Cash (mostly T-bills) and a similar position in Treasury bonds through his insurance company, GEICO. While Buffett repeatedly talks down Gold in comments for public consumption, that doesn’t mean he doesn’t like hard assets. He has enormous positions in hard assets like real estate through his railroad, BNSF, and indirectly in the form of mortgages held by his largest bank position, Wells Fargo.

I don’t begrudge Buffett his fortune, but I don’t believe he is entirely honest about how he is making money these days.

[Kbg]

BKH was/is well positioned to take advantage of others' (BoA's) misfortune because A) they know how to manage risk given how large a component insurance is to their business and B) they had/have a ton of cash with very deep pockets.

It was a head or tails I win deal; however, BKH did take risk. If BoA would have gone under then that investment would have been a loss. Of note, WB offered a similar life line to Bear Stearns and their CEO was too stupid to take it. (Small technical point: Buying existing stock on the open market does exactly nothing to help a company fix a hemorrhaging balance sheet...so I have no idea what your point is.)

Do we blame the well run company or the poorly run company?

Messrs. Buffett and Munger have always been pretty clear/consistent on their investing philosophy when it comes to asset class preferences...it has to provide a return stream. I'm pretty sure in their mind if they could sell off the right of ways under BNSF and just keep the track and trains they would be cool with that. (unless the land was providing rental income).

With regard to performance...BKH is huge now and has been for quite a while. Even Buffett says going forward is going to be tough to beat a large cap index. Most people who are BKH fans assess the company is still extremely well run and pretty cheap right now. Additionally, because they never pay a dividend the theory is that BKH can probably match the SP500, at less risk and at far less of a tax hit over a LT hold. (I'm not a BKH shareholder...just follow a board on TMF that is all about BKH)

[Xan]

just follow a board on TMF that is all about BKH

TMF?

Motley Fool?

[Kbg]

Yes, the Motley Fool BKH board.

One of my favorite posters anywhere is a guy who frequents that board - Mungofitch. I’ve learned a TON from him over the years.

[dualstow]

just follow a board on TMF that is all about BKH

TMF?

Motley Fool?

I guess not, because kbg recently wrote that “tmf is up huge.”
Meanwhile, Berkshire is BRK — BKH is something else — and I still don’t know what TMF is. Something something fund?

Edit: oh, it’s a proper ticker: https://finance.yahoo.com/quote/TMF?p=TMF

Edit #2: I guess it means different things in different posts.

[Kbg]

LOL!

[dualstow]