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วันพฤหัสบดีที่ 21 มิถุนายน พ.ศ. 2561

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.

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.

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: 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.

John C. Bogle: Personal life

Personal life[edit]

Bogle and his wife Eve have six children and are grandparents. They reside in Bryn Mawr, Pennsylvania.

At age 31, Bogle suffered from his first of several heart attacks, and at age 38, he was diagnosed with the rare heart disease arrhythmogenic right ventricular dysplasia. He received a heart transplant in 1996 at age 65.^[12]^[13]

Bogle is a member of the board of trustees at Blair Academy. He is also an advisory board member of the Millstein Center for Corporate Governance and Performance at the Yale School of Management. Bogle received honorary doctorates from Princeton University in 2005 and Villanova University in 2011. Bogle also serves on the board of trustees of the National Constitution Center in Philadelphia, a museum dedicated to the U.S. Constitution. He had previously served as chairman of the board from 1999 through 2007. He was named chairman emeritus in January 2007, when former president George H. W. Bush was named chairman.

John C. Bogle: Investment philosophy[

Investment philosophy[edit]

Bogle's innovative idea was creating the world's first index mutual fund in 1975. Bogle's idea was that instead of beating the index and charging high costs, the index fund would mimic the index performance over the long run—thus achieving higher returns with lower costs than the costs associated with actively managed funds.

Bogle's idea of index investing offers a clear yet prominent distinction between investment and speculations. The main difference between investment and speculation lies in the time horizon. Investment is concerned with capturing returns on the long-run with lower risk, while speculation is concerned with achieving returns over a short period of time. Bogle believes this is an important analysis to be taken into account as short-term, risky investments have been flooding the financial markets.^[10]

Bogle is known for his insistence, in numerous media appearances and in writing, on the superiority of index funds over traditional actively managed mutual funds. He contends that it is folly to attempt to pick actively managed mutual funds and expect their performance to beat a low-cost index fund over a long period of time, after accounting for the fees that actively managed funds charge.^[8]

Bogle argues for an approach to investing defined by simplicity and common sense. Below are his eight basic rules for investors:^[11]

Select low-cost funds
Consider carefully the added costs of advice
Do not overrate past fund performance
Use past performance to determine consistency and risk
Beware of stars (as in, star mutual fund managers)
Beware of asset size
Don't own too many funds
Buy your fund portfolio - and hold it

John C. Bogle: Early life and education

Early life and education[edit]

John (Jack) Bogle was born on May 8, 1929 in Verona, New Jersey to William Yates Bogle, Jr., and Josephine Lorraine Hipkins.

His family was affected by the Great Depression. They lost their inheritance and had to sell their home, with his father falling into alcoholism which resulted in his parents' divorce.^[3]

Bogle and his twin David attended Manasquan High school on the New Jersey shore for a time. Their academic record there enabled them to transfer to the prestigious Blair Academy on work scholarships. At Blair, John showed a particular aptitude for math, with numbers and computations fascinating him. In 1947, John graduated from Blair Academy cum laude and was accepted at Princeton University, where he studied economics and investment. During his university years, John was determined to examine the mutual fund industry that had not been analyzed before. Bogle spent his junior and senior year working on his thesis "The Economic Role of the Investment Company".^[4]

He earned his undergraduate degree in 1951, and attended evening and weekend classes at the University of Pennsylvania.

Seth Klarman: Investment philosophy

Investment philosophy[edit]

Klarman is a known value investor, and has stated that he has known he was one since junior year of college at age 25. During an interview at Harvard Business School, he stated: "It turns out that value investing is something that is in your blood. There are people who just don’t have the patience and discipline to do it, and there are people who do. So it leads me to think it’s genetic."^[15]

When asked what drives his fund's overall investment strategy and how value investing fits into the hedge fund market he replied:

Firstly, Value investing is intellectually elegant. You’re basically buying bargains. It also appeals because all the studies demonstrate that it works. People who chase growth, who chase high fliers, inevitably lose because they paid a premium price. They lose to the people who have more patience and more discipline. Third, it’s easy to talk in the abstract, but in real life you see situations that are just plain mispriced, where an ignored, neglected, or abhorred company may be just as attractive as others in the same industry. In time, the discount will be corrected, and you will have the wind at your back as a holder of the stock.^[15]

Klarman has been an avid supporter of the teachings of Benjamin Graham, and during the 2008 financial crisis criticized the short-term thinking of other fund managers, he believes that the "this-time-is-different" mindset will give a false sense of security to investors and they ought to look at the bigger picture. He stresses the utility in the economy's business cycles and their predestined and perpetual self-corrective tendency.^[15] Klarman is known to sit on 30% to 50% of his funds in cash as to avoid unfavorable market conditions and only buys stocks he thinks have a suitable mispricing.^[7]

He makes unusual investments, buying unpopular assets while they are undervalued, using complex derivatives, and buying put options. During his first years running Baupost he made it a point to only invest in companies that were not widely accepted by the Wall Street community; he stressed managing risk and using the margin of safety.^[7] He is a very conservative investor, and often holds a significant amount of cash in his investment portfolios, sometimes in excess of 50% of the total.^[18]Despite his unconventional strategies, he has consistently achieved high returns.^[19] Klarman looks for companies that are traded at a discount (so he can assume shares with a margin of safety). Klarman and his fund usually go "bargain hunting," when companies are distressed or face low growth or declining years. It was reported by The Boston Globe in 2015 that when energy stocks were declining, his firm "started looking for deals."^[20] According to Institutional Investor, "[Klarman] has succeeded by deftly exploiting under-valued markets whether they are in equities, junk bonds, bankruptcies, foreign bonds or real estate."

Seth Klarman: Early life and education

Early life and education[edit]

Seth Andrew Klarman was born on May 21, 1957 in New York City.^[6]^[2] When he was six he moved to the Mt. Washington area of Baltimore, Maryland near the Pimlico Race Track,^[7] and grew up in a traditional Jewish family.^[8]^[9]^[10] His father was a public health economist at Johns Hopkins University and his mother taught high school English.^[11]^[12] His parents divorced shortly after their moving to Baltimore.^[7]

When he was four years old he redecorated his room to match a retail store putting price tags on all of his belongings and gave an oral presentation to his fifth grade class about the logistics of buying a stock. As he grew older had a variety of small time business ventures including a paper route, a snow cone stand, a snow shoveling business, and sold stamp-coin collections on the weekends.^[6] When he was 10 years old he purchased his first stock, one share of Johnson & Johnson (the stock splitthree-for-one and over time tripled his initial investment). At age 12 he was regularly calling his broker to get stock quotes, his reasoning behind buying a share of Johnson & Johnson was the fact that he has used a lot of band-aids (a product of the company) during his earlier years.^[6]

Klarman attended Cornell University in Ithaca, New York, and was interested in majoring in mathematics but instead chose to pursue economics.^[7] He graduated magna cum laude in economics with a minor in history in 1979.^[13] In the summer of his junior year he interned at the Mutual Shares fund and was introduced to Max Heine and Michael Price. After graduating from college he went back to the company to work for 18 months before deciding to go to business school.^[7] He went on to attend Harvard Business School where he was a Baker Scholar and was classmates with Jeffrey Immelt, Steve Burke, Stephen Mandel, James Long and Jamie Dimon.

Seth Klarman

Seth Andrew Klarman (born May 21, 1957)^[2]^[3] is an American investor and hedge fund manager. He is known as a value investor and is currently the chief executive and portfolio manager of the Baupost Group, a Boston-based private investment partnership he founded in 1982.

He closely follows the investment philosophy of Benjamin Graham and is known for buying unpopular assets while they are undervalued, seeking a margin of safety and profiting off of their rise in price. Since his fund's $27 million-dollar inception to 2008 he has realized a 20 percent compound return-on-investment and as of 2016 manages $31 billion in assets.

In February 2018, Forbes Magazine listed his personal fortune at US$1.50 billion. In 2015, Klarman was listed as the 15th highest earning hedge fund manager in the world.^[1] In 2008, he was inducted into Institutional Investors Alpha's Hedge Fund Manager Hall of Fame.^[4] He has drawn numerous comparisons to fellow value investor Warren Buffett, and akin to Buffett's notation as the "Oracle of Omaha," he is known as the "Oracle of Boston."^[5

Philip Arthur Fisher

Philip Arthur Fisher (September 8, 1907 – March 11, 2004) was an American stock investor best known as the author of Common Stocks and Uncommon Profits, a guide to investing that has remained in print ever since it was first published in 1958.

Career[edit]

Philip Fisher's career began in 1928 when he dropped out of the newly created Stanford Graduate School of Business(later he would return to be one of only three people ever to teach the investment course)^[1] to work as a securities analyst with the Anglo-London Bank in San Francisco. He switched to a stock exchange firm for a short time before starting his own money management company, Fisher & Co., founded in 1931.^[2]^[3] He managed the company's affairs until his retirement in 1999 at the age of 91, and is reported to have made his clients extraordinary investment gains.^[4]

Although he began some fifty years before the name Silicon Valley became known, he specialized in innovative companies driven by research and development. He practiced long-term investing, and strove to buy great companies at reasonable prices. He was a very private person, giving few interviews, and was very selective about the clients he took on. He was not well-known to the public until he published his first book in 1958.^[5] At this point Fisher's popularity rose dramatically and propelled him to his now legendary status as a pioneer in the field of growth investing.^[6] Morningstar has called him "one of the great investors of all time".^[3] In Common Stocks and Uncommon Profits, Fisher said that the best time to sell a stock was "almost never". His most famous investment was his purchase of Motorola, a company he bought in 1955 when it was a radio manufacturer, and held it until his death.^[7] Phillip is remembered for using and proliferating the "scuttlebutt" or "grape vine" tool, in which he searched fastidiously for information about a company.^[8] When you scuttlebutt, you make more informed decisions due a better basis for analysis and valuation.

In the 2018 Berkshire Hathaway annual shareholders meeting, Warren Buffett called Fisher's "Common stocks and uncommon profits" a "very very good book".^[9] He further described how using Fisher's "scuttlebutt" technique continues to be a good way to investing, which is still used by Ted and Todd at Berkshire Hathaway. John Train described Warren Buffett as 85% influenced by Benjamin Graham and 15% by Philip Fisher.^[10]^[11]

His son Kenneth L. Fisher also founded an investment firm.

Charlie Munger: Personal life

Personal life[edit]

From his first marriage to Nancy Huggins,^[3] Munger had three children, Wendy (a former corporate lawyer and trustee of Stanford University^[20]), Molly (a civil rights attorney and funder of a ballot initiative to raise California taxes for public education.^[21]) and Teddy (deceased, leukemia, age 9).

From his marriage to Nancy Barry, Munger is a father of four children—physicist and Republican activist Charles T. Munger Jr., Emilie Munger Ogden, Barry A. Munger and Philip R. Munger—and two stepchildren: William Harold Borthwick and David Borthwick.^[22] Nancy Barry Munger died in 2010.^[23]

Munger enjoys architecture and has designed multiple buildings, including dormitories at Stanford University and University of Michigan as well as the house he currently inhabits.^[24]

Charlie Munger: Investment philosophy

Investment philosophy[edit]

"Elementary, worldly wisdom"[edit]

In multiple speeches, and in the book Poor Charlie's Almanack, Munger has introduced the concept of "elementary, worldly wisdom" as it relates to business and finance. Munger's worldly wisdom consists of a set of mental models framed as a latticework to help solve critical business problems.^[3]

Munger, along with Buffett, is one of the main inspirations behind the book Seeking Wisdom: From Darwin to Munger. Author Peter Bevelin explained his key learnings from both Munger and Buffett in a 2007 interview: "How to think about businesses and investing, how to behave in life, the importance of ethics and honesty, how to approach problems but foremost how to reduce the chance of meeting problems." Bevelin stated that previously, he "was lacking the Munger ability to un-learn my own best-loved ideas".^[10]

Munger states that high ethical standards are integral to his philosophy; at the 2009 Wesco Financial Corporation annual meeting he said, "Good businesses are ethical businesses. A business model that relies on trickery is doomed to fail."^[11] During an interview and Q&A session at Harvard-Westlake School on January 19, 2010, Munger referred to American philosopher Charles Frankel in his discussion on the financial crisis of 2007–08 and the philosophy of responsibility. Munger explained that Frankel believed:

...the system is responsible in proportion to the degree that the people who make the decisions bear the consequences. So to Charlie Frankel, you don’t create a loan system where all the people who make the loans promptly dump them on somebody else through lies and twaddle, and they don’t bear the responsibility when the loans are good or bad. To Frankel, that is amoral, that is an irresponsible system.^[12]

Munger is critical of cryptocurrencies, referring to Bitcoin as "poison".^[13] In early 2018 he likened bitcoin to "harvested baby brains" in an interview with Yahoo Finance.^[14]

Lollapalooza effect[edit]

Munger uses the term "Lollapalooza effect" for multiple biases, tendencies or mental models acting at the same time in the same direction. With the Lollapalooza effect, itself a mental model, the result is often extreme, due to the confluence of the mental models, biases or tendencies acting together, greatly increasing the likelihood of acting irrationally.^[15]

During a talk at Harvard in 1995 entitled The Psychology of Human Misjudgment, Munger mentions Tupperware parties and open outcry auctions, where he explained "three, four, five of these things work together and it turns human brains into mush,"^[16]^[17] meaning that normal people will be highly likely to succumb to the multiple irrational tendencies acting in the same direction. In the Tupperware party, you have reciprocation, consistency and commitment tendency, and social proof. (The hostess gave the party and the tendency is to reciprocate; you say you like certain products during the party so purchasing would be consistent with views you've committed to; other people are buying, which is the social proof.) In the open outcry auction, there is social proof of others bidding, reciprocation tendency, commitment to buying the item, and deprivation super-reaction syndrome, i.e. sense of loss. The latter is an individual's sense of loss of what he believe should be or is his. These biases often occur at either conscious or subconscious level, and in both microeconomic and macroeconomic scale.