วันพฤหัสบดีที่ 21 มิถุนายน พ.ศ. 2561

Warren Buffett: ‘Tesco was a huge mistake’

Billionaire investor’s fund Berkshire Hathaway owns 4.1% of supermarket but falling share price has cost it £465m in a year

Renowned US investor Warren Buffett has said he made a “huge mistake” by investing in Tesco, as the problems mount at Britain’s largest retailer.

Tesco shares have slumped 45% this year as the supermarket issued four shock profit warnings and last week became embroiled in an accounting scandal, admitting it had overstated its profits by £250m. The retailer has been the worst performer in the FTSE 100 index this year and its shares are at an 11-year low.

Buffett, pictured, known as the Sage of Omaha and one of the world’s richest people, is Tesco’s third-largest shareholder, with a 4.1% stake, held through his Berkshire Hathaway investment business. However, the value of Buffett’s stake has fallen by about $750m (£465m) this year.

Buffett first bought into Tesco in 2006 – when Tesco was expanding rapidly in the UK and across the globe and was planning to open a new chain in the US – and steadily increased his holding.

However its US business, called Fresh & Easy, was eventually closed down altogether at a total cost of £1.8bn.

Undaunted by a shock profit warning from the company, Buffett raised his stake to over 5% when others were selling the stock. Tesco was the only stock in his top 15 picks that recorded a loss last year. Buffett told CNBC: “I made a mistake on Tesco. That was a huge mistake by me.”

The UK’s financial regulator has launched a full-scale investigation into the accounting scandal that has plunged Tesco even deeper into crisis. The retailer’s new boss, Dave Lewis, is tasked with restoring Tesco’s battered reputation as well as fixing its business amid rapidly declining sales.

Meanwhile, star UK fund manager Neil Woodford – who decided to sell his stake in Tesco in 2012 after its first profit warning – said last week it could be a long time before any of the British supermarkets became good investment prospects again.

Elsewhere in the grocery sector, Sainsbury’s shares fell again on Thursday, trading down nearly 4% at 224.8p, after its new boss, Mike Coupe, revealed a slump in sales and warned that Britain’s supermarkets are facing a “perfect storm” of problems.

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credit: https://www.theguardian.com/business/2014/oct/02/warren-buffet-tesco-huge-mistake

Warren Buffett Just Obliterated Bitcoin in Four Words

Warren Buffett Just Obliterated Bitcoin in Four Words

Billionaire investor Warren Buffett is taking his already harsh criticism of Bitcoin to another level.

Buffett, who has previously said that cryptocurrencies like Bitcoin will almost certainly “come to a bad ending,” was asked over the weekend at the Berkshire Hathaway annual meeting about comments made by business partner Charlie Munger—who has called Bitcoin “turds” and compared it to rat poison.

Buffett didn’t mince words. Bitcoin is “probably rat poison squared,” Buffett replied.

On Monday, Buffett appeared on CNBC to explain that he was so down on Bitcoin, and cryptocurrencies in general, because they don’t produce anything—so they’re essentially investments based on pure speculation.

“When you buy non-productive assets, all you’re counting on is that the next person is going to pay you more, because they’re even more excited about another next person coming along,” Buffett said. “The asset itself is creating nothing.”

Buffett has said in the past that he and many investors really don’t understand Bitcoin. On CNBC Monday, he added that cryptocurrencies’ mystique actually entices investors—because it seems like magic when, say, the price of Bitcoin rose 36% in April. (Mind you, that increase came after Bitcoin’s price had fallen to one-third of its all-time high near $20,000, which it hit last December.)

“It’s better if they don’t understand it,” Buffett said Monday. “If you don’t understand it you get much more excited.”

credit: http://time.com/money/5267647/warren-buffett-bitcoin-invest/

Warren Buffett says bitcoin is 'rat poison'

Warren Buffett says bitcoin is 'rat poison'

Tell us how you really feel, Mr. Buffett.

The price of bitcoin took a dive after Warren Buffett renewed his criticism of the cryptocurrency — even comparing it to rat poison.

Bitcoin had been closing in on $10,000, but it fell nearly 6% Sunday and was down another 2% Monday to just over $9,300.

Buffett, the CEO of Berkshire Hathaway (BRKB), has been a bitcoin bear for years. He has often compared the cryptocurrency to gold, saying that both assets are strictly speculative and don't produce earnings and dividends like stocks do.

Before the Berkshire annual meeting on Saturday, Buffett told CNBC that bitcoin was "probably rat poison squared."

During the meeting itself, Buffett joked that "if you had bought gold at the time of Christ and you figure the compound rate on it, it's a couple tenths of a percent." What Buffett was saying about bitcoin was that you can buy it, but it will never produce anything of value.

He also responded to a question from the audience about bitcoin by saying that it and other crytpocurrencies "will come to bad endings."

Berkshire vice chairman and longtime Buffett confidant Charlie Munger was even more blunt.

"I like cryptocurrencies a lot less than you do," Munger said to Buffett. "To me, it's just dementia. It's like somebody else is trading turds and you decide you can't be left out."

Munger has also referred to bitcoin as poison. At the shareholder meeting of The Daily Journal(DJCO), a newspaper publisher in Los Angeles where Munger serves as chairman, he called it "noxious."

Strong words. But to be fair to bitcoin bulls, both Buffett and Munger have been wrong about the cryptocurrency. Buffett in particular.

He first called bitcoin a "mirage" in 2014 — back when it was trading for about $600. So even with the recent pullback, bitcoin has drastically outperformed the broader market, not to mention Berkshire stock and top Berkshire holdings like Apple (AAPL).

That's why some cryptocurrency experts think that investors should ignore Buffett's and Munger's repeated bitcoin bashing.

"What I do find monumentally baffling is that two of the world's most successful investors cannot see the intrinsic value of some form of cryptocurrency," Nigel Green, CEO of financial consulting firm deVere Group, wrote in a report early Monday.

"Do they honestly believe that there is no place for, and no value of, digital, global currencies in an increasingly digitalized and globalized world?" Green added.

Warren Buffett explains one thing people still don't understand about bitcoin

Warren Buffett explains one thing people still don't understand about bitcoin

When it comes to bitcoin, billionaire investor Warren Buffett wants to make one thing clear: Unlike buying stocks, bonds or real estate, buying bitcoin is not an investment.

That's because it lacks intrinsic value, Buffett says.

"If you buy something like bitcoin or some cryptocurrency, you don't have anything that is producing anything," Buffett says in an interview with Yahoo Finance. "You're just hoping the next guy pays more. And you only feel you'll find the next guy to pay more if he thinks he's going to find someone that's going to pay more.

"You aren't investing when you do that, you're speculating."

Famous for his "buy and hold" investment strategy, the Berkshire Hathaway CEO built his company — and his $82.8 billion net worth — backing companies that have substantive value.

"Put together a portfolio of companies whose aggregate earnings march upward over the years, and so also will the portfolio's market value," Buffett wrote in his 1996 letter to shareholders. "If you aren't willing to own a stock for ten years, don't even think about owning it for ten minutes."

To be an investment, what you're buying has to be worth something on its own, Buffett says.

For example, "If you buy something [like] a farm, an apartment house or an interest in a business and look to the asset itself to determine whether you've done something — what the farm produces, what the business earns ... it's a perfectly satisfactory investment," Buffett explains to Yahoo Finance. "You look at the investment itself to deliver the return to you.

"If you ban trading in farms, you could still buy farms, and have a perfectly decent investment," Buffett says.

Bitcoin, however, only increases in value by being bought and sold, he argues. Its value comes from what people are willing to pay.

"[I]f you ban trading in ... bitcoin, which nobody knows exactly what it is, people would say, 'Well why in the world would I buy it?'"

"The idea that it has some huge intrinsic value is just a joke in my view," Buffett said.

In 2017, bitcoin soared from below $1,000 at the start of the year to over $19,000 in December, catching the attention of everyone from J.P. Morgan Chase CEO Jamie Dimon to NFL players. Tuesday, bitcoin traded near $8,900 according to CoinDesk's price index.

Buffett sees a bleak future for the digital currency.

"In terms of cryptocurrencies, generally, I can say with almost certainty that they will come to a bad ending," Buffett told CNBC in January."When it happens or how or anything else, I don't know."

Of course, Buffett has been wrong about backing new technologiesbefore. He missed opportunities to invest in Google and Amazon, decisions he now calls mistakes.

"I did not think [founder Jeff Bezos] could succeed on the scale he has," Buffett said to shareholders in May 2017.

Crypto-enthusiasts argue that Buffet doesn't understand blockchain-based coins, and he has admitted as much.

Still, many other investing experts like CNBC's Jim Cramer, Kevin O'Leary and Tony Robbins, also call buying cryptocurrencies a gamble. They suggest thinking of it like rolling the dice in Las Vegas.

"As long as you can afford to lose everything you put into it, go with it," O'Leary told CNBC Make It in December, 2017.

That mindset is alright with Buffett.

"There's nothing wrong with it if you want to gamble [that] somebody else will come along and pay you more money tomorrow," Buffett tells Yahoo Finance. "That's one kind of game. That is not investing."

Don't miss: Here's how much grad school cost when Warren Buffett graduated in 1951, compared to today

Like this story? Like CNBC Make It on Facebook!

credit: https://www.cnbc.com/2018/05/01/warren-buffett-bitcoin-isnt-an-investment.html

วันพุธที่ 20 มิถุนายน พ.ศ. 2561

Investment Lessons from Warren Buffett

Why has Warren Buffett developed a huge throng of devotees? Well, sure, he’s amassed a fortune of nearly $60 billion, making him one of the wealthiest people on earth. But that’s not the only reason professionals and amateurs interested in financial management follow the Berkshire Hathaway CEO so avidly. There’s a clarity and sturdy logic to Buffett’s philosophy that makes it attractive to fund managers and small-scale investors alike.

Retirees, in particular, would do well to take a few pages from Buffett’s playbook. Here are six that have extra significance for those entering their post-workday years.

1. Think Long-Term

A few years ago, an Associated Press-LifeGoesStrong.com poll found that more than one in four adults expect to live to at least 90, including nearly half of those who said they were currently 65 or older. And census data suggests that by mid-century, ninetysomethings will make up 2% of the total U.S. population, up from 0.7% in 2010. So it’s important to make your money last.

One of the best ways to do that is to keep a percentage of your portfolio in the stock market.

Yes, that may seem to fly against conventional wisdom: Seniors are often advice to allocate their assets away from capital appreciation and towards income-producing vehicles.

The key, according to Buffett, is to stay in the market but focus on stable companies that look like a good play over the long haul. His admiration for a certain soft drink maker is a perfect example. Back in 1988, he purchased more than $1 billion of Coca-Cola stock, calculating that its strong brand would safeguard the business from competitors.

Buffett turned out to be right. Coke’s stock price grew roughly 16-fold over the next 27 years.

2. Do Your Homework

Not all of Buffett’s investments have looked like home runs right after he made them. But more times than not, his decisions proved to be the right ones over time. A big reason: the iconic investor does his research before making a big decision. Often, that gives him the confidence to go down some less-than-obvious paths.

Berkshire’s gamble on Burlington Northern Santa Fe in 2009 was a case in point. On the heels of a major recession, purchasing a major railway operator seemed dicey, to say the least. But the company’s fundamentals suggested otherwise.

Buffett’s move now looks prescient. The carrier’s revenue rose to $23.2 billion in 2014, up from $18 billion in 2008, before Buffett bought it. Research has its rewards.

3. Keep Emotion in Check

Mom-and-pop investors often make decisions based on gut reactions. When the market turns south, they start selling off stocks. When it’s up, they buy more. It's natural, but not a smart investment strategy, since they often end up losing money on the sales, and spending too much on the purchases.

Buffett advocates doing the exact opposite. “Be fearful when others are greedy, and be greedy when others are fearful," as he once wrote in a New York Times op-ed piece. Follow that advice and you’ll end up buying low and selling high, which is precisely how you maximize profits.

This is especially important for people in retirement. The occasional downturn is unavoidable. If you panic and start selling, you’re not giving the market time to rebound. Historically, it always does. (And don't forget, if you're in your 60s now, you may well have a good 20 years or so to ride out market fluctuations.)

4. Invest in Ideas

According to Buffett, having a genius CEO at the helm doesn’t necessarily make a company worthwhile. Instead, what he focuses on are businesses with an unshakable competitive advantage.

He once told investors to select companies so wonderful that even an idiot could run them. If you don't think that applies to a particular organization, you might want to think twice before buying shares in it.

5. Try Passive Investing

Buffett has built his fortune by beating the market with his stock picks. But he realizes that most individuals don’t have that ability. So in recent years, he’s been a big advocate of index funds, whose portfolios simply mimic a certain benchmark like the S&P 500.

In a letter to Berkshire investors, he once wrote: “The goal of the non-professional should not be to pick winners – neither he nor his “helpers” can do that – but should rather be to own a cross-section of businesses that in aggregate are bound to do well.” For some specific ideas, see 3 Passive Index Funds That Are Top Bets for Retirement in 2016 (VCIT, HYG).

The advantage of index funds is that, without an active fund manager, they keep expense ratios and other costs low (since they have low turnover, they also generate lower long-term capital gains, making them also relatively tax-efficient). In fact, Buffett has instructed the trustee of his estate to leave his wife mostly index funds when he eventually passes away.

6. Find a Good Value

At heart, Buffett has always been a value investor, buying up stocks that he thinks are underpriced. He only purchases shares that have a significant “margin of safety” – that is, they’re selling well below what they’re truly worth. If he thinks a stock is worth $20 a share, he might wait until it’s going for $17.

The key, then, is having patience. Know what you’re willing to pay for a stock – or a slice of an index fund, for that matter. If the market is commanding more, resist the urge to dive in.

When you have a margin of safety with your investments, you’re not only maximizing potential gains, but minimizing potential losses. For someone who’s already living out their retirement, that’s more important than ever.

6 Rules From 6 of the World's Top Investors

Investors don't agree on much, but they do agree that making money in the market comes with a steadfast strategy that is built around a set of rules. Think for a moment about your early days as an investor. If you're like many, you jumped in with very little knowledge of the markets. When you bought, you didn't even know what a spread was, and you sold either too early if you saw a gain or too late if your stock dropped in value. If your only investing rule has been to not follow any rules, you're probably disappointed with your results so far.

TUTORIAL: How to Pick a Stock

If you don't have your own carefully crafted suite of investing rules, now is the time to do it, and the best place to start is to ask the people who have had success in their investing careers. We not only found people who can claim success, we found six of the most successful investors in history.

"Be patient with winning trades; be enormously impatient with losing trades. Remember it is quite possible to make large sums trading/investing if we are 'right' only 30% of the time, as long as our losses are small and our profits are large." – Dennis Gartman

Dennis Gartman began publishing The Gartman Letter in 1987. It is a daily commentary of global capital markets that is delivered to hedge funds, brokerage firms, mutual funds, and grain and trading firms around the world each morning. Gartman is also an accomplished trader and a frequent guest on financial networks.

His rule above addresses a number of mistakes young investors make. First, don't sell at the first sign of profits; let winning trades run. Second, don't let a losing trade get away. Investors who make money in the markets are OK with losing a little bit of money on a trade but they're not OK with losing a lot of money.

As Gartman points out, you don't have to be right a majority of the time. What is more important is to let a winning trade run and get out of a losing trade quickly. If you follow this rule, the money you make on the winning trades will far outpace the losing trades.

"It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price" – Warren Buffett

Warren Buffett is widely considered to be the most successful investor in history. Not only is he one of the richest men in the world, but he also has had the financial ear of numerous presidents and world leaders. When Buffett talks, world markets move based on his words.

Buffett is also known as being a prolific teacher. His yearly letter to investors in his company, Berkshire Hathaway, is used in college finance classes in the largest and most prestigious universities.

Buffett gives two key pieces of advice to the investor in his quote above. First, when evaluating a company, look at the quality of the company. This requires that you understand balance sheets, listen to conference calls and have confidence in the management. Second, only after you have confidence in the quality of the company should the price be evaluated. According to Buffett, if the quality of the company is high, don't expect to buy it at bargain-bin prices. Conversely, if the company isn't a quality company, don't buy it because the price is low. Bargain-bin companies often produce bargain-bin results. (To learn more, see What is Warren Buffett's Investing Style.)

"Do you really like a particular stock? Put 10% or so of your portfolio on it. Make the idea count. Good [investment] ideas should not be diversified away into meaningless oblivion." – Bill Gross

Bill Gross is the co-founder of PIMCO and managed the PIMCO Total Return Fund, one of the largest bond funds in the world.

Gross' rule speaks about portfolio management. A universal rule that most young investors know is diversification, i.e., not putting all of your investing capital into one name. Diversification is a good rule of thumb, but it can also diminish your profits when one of your picks makes a big move while other names don't. Making money in the market is also about taking chances based on exhaustive research. Always keep some cash in your account for those opportunities that need a little more capital and don't be afraid to act when you believe that your research is pointing to a real winner.

"We're getting hurt, but I'm a long-term investor"- Prince Alwaleed Bin Talal

You may have never heard of Prince Alwaleed Bin Talal, but he's well known in the investing world. An investor from Saudi Arabia, he founded the Kingdom Holding Company. If anybody had reason to panic, it is him. Prior to the Great Recession, he owned a 14.9% stake in Citigroup at a price much higher than its post-recession price. In addition to that, his real estate investments in India lost considerable value after the 2009 recession.

When others sold, Prince Alwaleed Bin Talal did what many of the best investors do to amass their riches: Hold their investments for a long period of time, taking large market events out of the picture and collecting a dividend while they wait.

It's OK to trade stocks on a short- or medium-term basis, but the bulk of your portfolio should be invested in longer-term holdings.

"You learn in this business… If you want a friend, get a dog." – Carl Icahn

Carl Icahn is a private equity investor and modern-day corporate raider, buying large stakes in companies and attempting to get voting rights to increase shareholder value. Some of his holdings have included Time Warner, Yahoo, Clorox and Blockbuster Video.

Icahn has made his fair share of enemies over the years, but investors shouldn't take his advice strictly in terms of interpersonal relationships. How many times in your investing past have you read an article, watched a news report or took a tip from a trusted friend about the next hot stock and lost money? (Hopefully you never acted on an unsolicited e-mail sent to you about a big-moving penny stock.)

There is only one piece of advice to act upon: Your own exhaustive research based on facts (not opinions) obtained from trusted sources. Other advice can be considered and verified, but it shouldn't be a sole reason to commit money.

"I am convinced that all this poverty in Mexico and in Latin America, like it's happening in China is the opportunity to grow. It's an opportunity for investment" – Carlos Slim

Another of the richest men in the world, Carlos Slim, owns hundreds of companies and has an employee base of more than 250,000. His quote represents a mindset that the best investors possess. They don't look at what's happening now. By studying the momentum of a company or an entire economy. and how it interacts with its competitors, great investors invest now for what will happen later. They are always forward thinking. If you're looking at now or trying to jump on the bandwagon of an investment that has already had short-term gains, you've probably missed the big move. Try to find the next big winner, but always anchor your portfolio with great companies that have a long track record of steady growth.

The Bottom Line
Now that you've read about one of each of these investors' rules, it's time to become a student of these investors and learn from their experiences. Each of these investors is known for being students of the markets, as well as leaders. As you begin to apply your new rules and commit to following them even when your mind tells you no, you'll see the profits start rolling in

วันพฤหัสบดีที่ 14 มิถุนายน พ.ศ. 2561

Joel Greenblatt: Philanthropy

Philanthropy[edit]

Greenblatt is also famous for his contributions to education in New York City. In 2002, he donated $2.5 million to P.S. 65Q, a public elementary school in the borough of Queens, whose students come largely from the neighborhood's South American and South Asian immigrant communities. This investment, equal to about $1,000 per student per year over five years, helped P.S. 65Q to go from a struggling school to an urban success story almost overnight. He continues to aid the school in Ozone Park currently as they have continued to rise. Recently the school and principal Rafael Morales received a progress report score of A, scoring 98 out of a possible 100 points.

In 2006, Greenblatt also helped start the Success Academy Charter Schools, then known as the Harlem Success Academy Charter School, an elementary school in the city's historically African American neighborhood.^[10] He is also a board member of the Institute for Student Achievement, a national leader in developing new small high schools and transforming large comprehensive public high schools into small learning communities.^[11]

Greenblatt is a founding Master Player of the Portfolios with Purpose virtual stock trading contest.

Joel Greenblatt: Career in finance

Career in finance[edit]

Gotham Capital[edit]

In 1985, Greenblatt started a hedge fund, Gotham Capital, with $7 million, most of which was provided by junk-bond king Michael Milken.^[3] Through his firm Gotham Capital, Greenblatt presided over an impressive annualized return of 40% from 1985 to 2006.^[4]

Value Investors Club[edit]

Greenblatt co-founded a website with John Petry called the Value Investors Club,^[5] where investors approved through an application process exchange value and special situation investment ideas. Membership is capped at 250 members and considered highly prestigious.^[6] A 2012 academic study showed that the recommendations of members do in fact appear to generate significant abnormal profits.^[7] The club awards $5000 bimonthly to members who provide the best advice.^[8]

Magic formula investing[edit]

His book The Little Book that Beats the Market introduced an investment strategy of "magic formula investing", which is a method for determining which stocks to buy: "cheap and good companies" with a high earnings yield and a high return on invested capital. His strategy is featured in The Guru Investor by John P. Reese.

Formula Investing[edit]

In October 2009 he launched Formula Investing,^[9] an online money management firm that follows the investment strategy described in his New York Times bestselling book The Little Book That Beats the Market. Formula Investing is a money management firm that uses a proprietary stock-screening system and a disciplined approach to manage portfolios of value stocks. The firm offers its services to individual investors and institutions and to registered investment advisors, who can use Formula Investing as a sub-advisor.

Formula Investing uses a system that determines portfolio selections based on a combination of their relative cheapness and quality, as measured by earnings yield and return on capital. Formula Investing allows money to be managed in a disciplined manner that removes factors, like excess emotion and future projections, that often lead to bad investment results.

Joel Greenblatt: Early life and education

Early life and education[edit]

Greenblatt was born in Great Neck, New York. His family was Jewish.^[2] Greenblatt is a graduate of The Wharton School at the University of Pennsylvania, receiving his B.S. in 1979 and M.B.A. in 1980.^[3]

Joel Greenblatt

Joel Greenblatt (born December 13, 1957) is an American academic, hedge fund manager, investor, and writer. He is a value investor, and adjunct professor at the Columbia University Graduate School of Business. He is the former chairman of the board of Alliant Techsystems and founder of the New York Securities Auction Corporation. He is also a director at Pzena Investment Management, a high-end value firm.