From the Presidential Medal
of Freedom presentation

Warren E. Buffett : as a world-known investor and philanthropist, Warren E. Buffett business acumen is matched only by his dedication to improve the lives of others. He is the co/founder of the Giving Pledge, an
organization that encourages wealthy Americans to donate at least 50percent of their wealth to philanthropic causes.

Warren Buffett’s example of Generosity and Compassion has shown us the power of one individual’s determination in inspiring countless women and men to help make our world a brighter place.

Last posts

From Omaha to Italy

Be like Buffett, Education

This is probably the last article I write in english. The language you use and how you use it make a difference in what you have to say. Communication skills are important. For istance the language of business is Accounting. Its building blocks are numbers and numbers are important to evaluate a company. (Check out “the three As” on my website www.marcoturco.com)

As a result if I want to communicate with accountants or with people interested in an estimate of a company, numbers can prevail sometimes and will play a fundamental part even if they must be in sync with facts and a reasoning that can support them. And these facts and the reasoning must be well expressed in a proper language understandable to the audience or the reader.

But what if the reasoning and description of the facts of a business want to be predominant over the numbers? What if you care more about establishing first a philosophy of investing and then take care of the figures and numbers of a business? Then communication skills become even more important.

It is not my ambition to reach a large number of people. I don’t consider myself a writer and nobody would. I just write probably to sharpen my communication skills. Most of the people that read and listen in english what I have to say about the market or Value Investing already know quite a bit about the shareholders letters or some key concept of investing followed by value investors all over the world. The language of investing is english as it is the language of Aviation.

However if I really want to do something different and useful for somebody who wants to know more about Buffett, Value and the stock market, I will want to switch to italian, and talk more to an italian audience than an english-speaking one. I don’t live in Italy anymore since some years now, even though I come back every summer, but I always found a deep gap among the italian “experts” (the ones that can read everything in english directly from the source, follow the videos and podcasts and the shareholder meetings and what have you) and the “beginners” (youngsters or amateurs that find in the language barrier the main obstacle to fully understand what Buffett, Munger or Graham really have to say). Moreover the italian press and pundits often write unaccurately lame articles flooded with too trite assemblages of the main lessons of Buffett about investing, life and the market.

In actuality more than one italian friend, partner or reader asked me recently to be : simple, clear and less “expert-oriented” and more in favour of an hypothetycal non-professional italian student or want-to be-investor, eager to learn about the Art and Science of Omaha. Thanks to Buffett the “Zoo of Superinvestors” of Omaha went global.

So let’s start to feed a new generation of SuperInvestors of the future. Let’s assume this new zoo can be in Italy. Like I said, at the end of the day I write for myself, for my own pleasure and to remind myself of all the good lessons and achievements I earned from studying the masters. This is my canvas and in my own world I can paint whatever I want. It is my tune, and I spent my entire life studying harmony to choose the chords that I love. Investing is not different. If you want to build your own portfolio, it is like your own composition. You studied so much harmony and tunes composed by the masters that now it’s your turn to write down your chords and notes.

Let’s start from the next article: after all the comments around the world in english, I will add a comment in italian about the Warren Buffett’s “Letter to Shareholders” that the Oracle just published, february 25th 2023.

Will I be able to pass along to a very small italian audience the joy of giving more than taking? The infrequency with which we shareholders opt for look-at-me assets and dynasty-building?

I’ll try to do my best to translate in italian the “Spirit of Omaha”.

Cordially,

Marco Turco

I look forward to hearing from you in english or italian: 

marco@blikebuffett.com 

L’importante è che nevichi (The unflagging desire)

Be like Buffett, Discipline

Dear Friends, Partners and Intelligent Investors,

La forza di gravità del mercato è la combinazione di due influenze determinanti : l’inflazione e i tassi di interesse. L’azione della FED è volta a frenare l’inflazione (alzando i tassi) e “creando” un accenno di recessione o frenando l’economia americana che ha viaggiato dal 2020 ad oggi a velocità molto sostenuta. La disoccupazione è solo al 3,4percento e veniamo da una crescita costante dal 2010, ininterrotta per 12 anni, e frenata solo per pochi mesi dalla pandemia nel marzo 2020.

Wall Street ha reagito con una frenata dell’ S&P 500 equivalente a -15percento da inizio anno, correggendo probabilmente una previsione precedente troppo ottimistica e tipica dei mercati quando crescono per molti anni di fila. Nel 1962 accadde qualcosa di molto simile.

Io ritengo, analizzando ogni giorno i fondamentali di aziende e i dati economici del paese, che si tratti di una correzione appunto e non di una bolla. Sono convinto pero’ che durerà ancora a lungo e non solo un anno o due come alcuni analisti ritengono. Di solito la storia ci insegna che per calmare l’inflazione i tassi d’interesse (Fed funds rate) devono allinearsi o andare sopra il tasso d’inflazione. Il 2 novembre scorso la Fed ha alzato i tassi al 4percento. L’inflazione è al 6,3percento (Core CPI).

E’ evidente che un ulteriore rialzo dei tassi è piu’ che prevedibile, ed i suoi effetti non possono considerarsi “immediati”. Piu’ a breve e benefico sarà un ulteriore abbassamento dei prezzi delle azioni. Le aziende piu’ deboli e maggiormente indebitate soffriranno di piu’ (e saranno costrette ad emettere ulteriori note o corporate bonds per finanziarsi a tassi molto piu’ alti) ma le aziende forti e meravigliose (con poco o pochissimo debito) sono e saranno impattate molto meno e diventeranno occasione di acquisto per gli investitori intelligenti e preparati. E’ sempre stato cosi’ e stavolta non sarà differente.

E’ in effetti cio’ che è già accaduto da inizio 2022 a noi e a MTCapital. Vediamo come e perchè:

Il 31 percento del nostro intero portafoglio è investito in BERKSHIRE HATHAWAY che da inizio anno registra un +11percento circa.
Un altro 30 percento del portafoglio è nel settore bancario e in una compagnia specializzata in carte di credito corporate e finanziamenti sulla salute di persone e pets. Quanto la gente è disposta a pagare in USA e indebitarsi, soprattutto attraverso una carta di credito, per la salute dentale o le cure del proprio animale domestico è sorprendente. In un momento di inflazione crescente vincono i business dai servizi essenziali ed eccellenti che possono permettersi di alzare i prezzi senza perdere clienti.
MT Capital possiede pezzi di questi business ed intende aumentare le posizioni in questo senso in futuro, quando e se i prezzi saranno ancora piu’ ragionevoli.
In effetti dal 29 settembre 2022 lo abbiamo già fatto. Cio’ che ho acquistato  da quella data ad oggi performa a +19,84percento. 

Ancora una volta è l’investimento sul reale Valore dell’azienda che dimostra che tutti i “Value Investors” a differenza dei day-traders, bond holders, options gamblers, short sellers etc etc. riescono a performare meglio; anzi molto meglio, soprattutto nei momenti di “crisi dei mercati” e a difendere i risparmi dei propri clienti dall’inflazione.

E ADESSO UMILTA’

Quindi S & P 500 -15,00percento, MT Capital +1,57percento da inizio anno e +7,00percento total gross return negli ultimi 6 mesi.
L’errore piu’ comune del money manager a questo punto è pensare di essere “diverso”, immune da errori grazie alla sua bravura denotata ovviamente da questi risultati.

Invece ci saranno cali e segni meno, e ben vengano. Stiamo, come analizzato precedentemente, attendendo correzioni al ribasso piu’ che al rialzo. Per noi “trouble is opportunity”.

Abbiamo ancora circa un 10percento del portafoglio in liquidità e soprattutto sappiamo dove e come impiegarla. Gradirei averne avuta un 20percento, ma abbiamo aggressivamente (e troppo presto per colpa mia) già comprato 3 compagnie cinesi che riteniamo in 5 / 10 anni possano darci risultati straordinari. Ora, sono tutte col segno meno.

Siamo alla ricerca di nuovi capitali e investitori astuti che condividono la nostra filosofia di lungo termine. Il fossato costruito attorno ai businesses che possediamo sarà intatto tra 10 e anche 20 anni (e piu’) a nostro avviso. Chi mi conosce molto bene sa che “B like Buffett” è Be fino in fondo per me. “I walk the talk”: le mie azioni Berkshire sia personali che in MT Capital sono “committed” all’eternità e alla filantropia. Il mio compito, divertimento e passione è “to pile up”. A 46 anni è troppo presto (spero!) per dire chi beneficerà del “pile down”. Che la neve “is falling down” come diceva Charlie Brown guardando il cielo, oppure “No, it’s coming up” gli rispondeva Lucy guardando il terreno, l’importante è che nevichi.

Per ora sono concentrato sull’obiettivo in maniera “newtoniana”, cioè ossessivamente non-distraibile. C’è una lista di rinunce (come ho imparato da Arnold Van Den Berg) che ho già accettato e fatto mia dentro di me per raggiungere il mio obiettivo. L’obiettivo è garantire a lungo termine quei risultati oltre la mediocrità e la media che solo i piu’ ricchi di pazienza sanno ottenere, trasformando quest’ultima in vera, durevole ricchezza. Il compito non è facile. Tutti possono fare bene a Wall Street per qualche anno. Pochi, quasi nessuno sa essere granitico e dare risultati per 20 o 30 anni. O piu’. (Come i miei principali riferimenti Buffett, Schloss, Fisher, Templeton). Bisogna leggere e analizzare bilanci e financial reports fino a diventare blu. Ma è l’unica strada.

Solo questa umiltà e disciplina puo’ darmi una piccola chance di riuscire anche solo ad avvicinarmi ai risultati dei grandi, risultati a cui aspiro per i miei clienti e partners. Fare benino e fare “la media” è quasi da tutti a Wall Street. Andare anche solo un poco oltre la media richiede una costanza, un sudore di analisi e studio, un “tiro bestiale”. E tempo. Warren Buffett, Walter Schloss, ma anche i piu’ “giovani” Nick Sleep o Bill Miller non sono gente “normale”. Ma nel mondo dell’investimento quando ci sono passione e determinazione, sono come debito e ignoranza : due miscele esplosive. La prima verso la ricchezza, la seconda verso il disastro.

Il mio lavoro è evitare la seconda miscela e non perdere mai la prima.

In attesa della “lunga poesia” annuale, cioè la lettera del prossimo 30 giugno 2023, che grazie a Warren è diventata un “genere letterario” a se’ stante nel mondo dei money managers, l’occasione è gradita per augurare a tutti “Happy Holidays” ed

Happy Investing e Felice Risparmio

Marco Turco
Naples, Florida Dicembre 2nd 2022
+1 (954) 632 9689
marco@blikebuffett.com

 

DISCLOSURES: the discussions, outlook and viewpoints featured are not intended to constitute investment advice or consulting service. MT Capital is a privately held investment firm not open to every investor or prospective client. A description of the firm’s business practices is available upon request. 

On a wall in Omaha…

Be like Buffett, THE BUSINESS OF LIFE

Warren E. Buffett was born the 30th of august 1930 in Omaha, Nebraska.

As we salute his 92nd birthday today we also humbly celebrate the 4th year of this blog and website.

When in the sixties in London people wrote on the walls of the city : EC IS GOD (Eric Clapton is God) a long, fortunate career was about to begin for the great Eric. His guitar playing and especially his voice was going to get better and better through the decades.

So,hoping nobody is offended, we would write today with the same spirit on a wall of the zoo of Omaha : WB IS GOD- just to make sure that a long, fortunate career is yet to come for Mr. Buffett too.

Even though there is a possibility that He will never die- (the famous black swan) we are sure that, no matter what may happen in a distant future, his legacy will live on for a very very long time.  The values to apply in life, the principles to master in business will remain in our hearts and in the minds of many students and people around the world.

Shareholders and an outstanding management team at Berkshire owe to Buffett (and Charlie Munger) a lot more than an awful amount of money.

Life is precious as it is the pursuit of happiness. Warren taught us how happiness can be achieved by everyone.

That’s what this blog, this website and “be like buffett” mean and are about.

Happy Birthday Warren

Respectfully and Thankfully, 

Marco

 

Naples, why not?

Uncategorized

Wanna move to the Bahamas? Sir John Templeton achieved better results from there for his Fund than the previous 20 years spent living in Wall Street. And what about Aruba or any place in the Caribbean?

Well, they are all wonderful and many more we can add to the list. But I always try to make things happen and there is a place that I like even more: I love Naples, Florida.  So I moved there and I tell you why:

I’m a big fan of the States, so I’m not that much enticed anymore from living in Europe (which I did for a long time) or abroad in general. I lived in Rome for years and in LA for a shorter period, and often visited big crowded cities. That’s what I enjoyed. Then all of a sudden I turned 40 in 2016. A new chapter in my life and a new path to build wealth began.I felt that a small but active and productive city, with lovable people, the sun shining all year round and hopefully by the sea, was my ideal. Two years of research, failures, illusions, disappointments but then in 2018 I was with my son for the first time in Naples, Florida. At the time I already committed some money to an investment not far from there, in Sunrise, 25 miles north of Miami.  So at first I moved there. I’m patient and Naples remained the target. Now that the goal became reality let me share with you some of the qualities belonging to this place I now call home with extreme pleasure:

Caveat: I love working and I’m against retirement and against too many days off  because I love what I do, so I don’t feel like working most of the days of my life. In fact typically my schedule doesn’t change much during the weekends. My job gives me freedom and independence. If I want, I’m free to change my schedule anytime. I always make plans (short-term, long-term and very very long-term) but to fullfill them I’m ready to be flexible.

1.Naples is perfect. It is a city in which if you want you can retire (consistently ranking among the top places to retire actually) but you can also remain in the business and stay active. Naples is home to more “Fortune 500 CEOs” than any other community in the nation.

2.At the same time if you feel your day is done and you want to relax and go to the beaches, you have wonderful options and you can do it all-year round. Naples ranks as the number 1 “best U.S. beach town to live in”. by Travel and Leisure 2021

3.People are hospitable and still there is a sense of community and it is worth to get involved. Naples ranks number 2 on the 2020 “Best small city in America” for natural resources, prosperity, and people.

4.Dining and shopping are great too. Huge variety and top-notch quality.

5.Naples scores high in residents’ health and well being and touts the lowest crime rate of any metropolitan area in Florida

6.There’s not only an enviable quality of life but also a rich cultural offer and a potent philantropic spirit, that is something as you know I really do care about and from which I wish to learn a lot in the future. Neapolitans are higly affluent (the top 1percent enjoys $5.6 million in income annually that is by far a lot more than the average of $1.3 million for the wealthiest 1percent nationwide). So from the luckiest ones you do want to expect to give back more than the average rich individual.

In conclusion it is for me at the same time a pleasant and inspiring place. I couldn’t ask for more.

 

Marco Turco, Naples FL

Any comment Feel free please to reach out at :  marco@blikebuffett.com

Important Note: I owe data and statistics I used in this article to “Naples Illustrated” 2022 One hundred Collier County’s most influential business leaders issue

“Personal History” by Katharine Graham

Be like Buffett, Be thankful, be lovable, THE BUSINESS OF LIFE

 

“Personal History” is Katharine Graham’s autobiography. A memoir that shines for its honesty, the remarkable wide range of stories and people she met. I’m a voracious reader of biographies, and I found this one wonderful. The Washington Post saga is a lesson in business and life in itself that should be taught. It contains the power of a family driven and committed to its passion and business. It shows the magic of consistency and persistence in building a dream more than a newspaper. It’s the story of years struggling under the radar and years with great economic loss endured by Katharine Graham’s family until the genius of Kay’s husband Phil Graham took over. I obviously grabbed the book because of Warren. (1 dollar at a book sale in Bonita Springs! I proposed successfully to pay for it 2 dollars knowing it was going to be such a good book worth much more than the 15.00 priced on the cover). I was right. I will pause a bit on the pages in which Buffett pops up, but the lessons from this personal history are multiple. I would say the 625 pages are an endless source of teachings about how to react to a personal tragedy (Phil Graham shot himself in the basement of their house) as well as how difficult was to run a newspaper through hard times and big challenges. The challenges accepted gradually but strongly and courageously by a woman in a time in which all the newspapers and boards in general were run by men, and only men. A time in which unions and scandals were going strong.

The story encompasses crises and victories as huge and critical  as inspiring : the Pentagon Papers, Watergate, the strikes of the early seventies. Thrown without her will and consent by the husband’s suicide in a business in turmoil, Katharine Graham overcame her insecurity to finally discover herself and her potential. In a fascinating adventure he accepted to fight to survive personally and financially. The burden never became less complicated but Katharine Graham faced every obstacle. Only this way they became lighter to carry through the bumps and curves of the journey. A journey she never looked back to refuse, neglect , not to endure or simply live. It is to me (and after reading will be to you) so clear why such a woman was so interesting a friend and a business partner for Warren Buffett.

For the Buffett students the investment in the Washington Post in the early 70s is pretty much straightforward and typical to understand. The passion and competence of the sage in the newspapers field was proverbial. The bargain was in plain sight considering the price of the stock. The entire group (not only the Post) was selling for roughly 100 million dollars compared to an intrinsic value of at least 400 million. Problems were always present and others will come for the management but trust in the Graham family to face them, and the ridiculous selling price were enough margin of safety for Warren. Add his famous patience and long term look together with his presence on the board in the following years and you will have a perfect picture of a Buffett deal.   Also Warren will be tireless and always responsive in advising Katharine Graham and actually became her teacher and Pygmalion from a business point of view. He played a big part in the repurchase of shares at such an undervalued stock price, and was so immensely useful in many other managerial decisions and critical moments.

The book is a gold mine not only for the Buffett student but for every business enthusiast and why not, for everybody that really likes a good, true story of courage and fulfillment. I wouldn’t add much more to let Katharine Graham speak for herself, since she does it tremendously well. I learnt a lot from this book in the last month in which it was with me everyday and everywhere. I was so eager to see “what’s next? What’s next?”. I’m sure soon I will read it again. Now, wrapping up for the Buffett maniacs like me, here’s few lines that will sound like music to our ears. A music for us, “Buffettists” that Graham in the book really played so well:

“(…).And it led to some sort of rationale that I can live with about the goal of each individual being to fulfill the unique potential within-and do it to the utmost…This is what you do Warren-or you are in the process of doing. Your intensity, concentration and drive almost scare me, but are luckily and happily relieved by those other things you also possess-decency, gaiety, enjoyment and warmth.”

Let’s write down all of those qualities on a piece of paper and keep them handy in your heart.

Happy Investing,

Marco Turco

marco@blikebuffett.com

“

Berkshire in 2071, a dad’s dream

Be like Buffett, Education

Let me be clear from the get-go: I’m not against business schools or formal training of any sort. You have to learn the basic tools and they will underpin all of your assumptions and decisions about investing and the market. But, and this is a big BUT, the way and the talent you may develop to make money can come from a different education as well.

I have a completely different and unconventional education in business if compared to any professional investor out there. You can also say that I’m an amateur. As long as my results for my partners and me are way beyond average and/or outstanding, I really don’t care. I rely upon the Graham’s line in the “Intelligent Investor” in which more or less he said that some regular non-professional investors are able to beat professionals at their own game. How? Basically, if they are equipped with the adequate attitude towards the market. The famous temperamental quality that Buffett stated very clearly decades ago and still he will confirm today. Human nature will not change now and fifty years from now. And so the human animal. The “academics” will still be teaching you all kinds of things to make you look like a “high priest” and not an amateur; but how about to make money? How about make 20, 30 or 50percent a year from your small portfolio? That’s another story.

When I was in Warsaw I took a course to prepare for CFA, and one of the “academics” was frequently lamenting how amateurs were acting in the market. Clearly he was so keen in calculating a duration of a bond that he simply forgot about all the rest to make money in the investment world, and he neither was himself an amateur or a professional. It was just clear to me as a lifelong Buffett student that he never managed money in his entire life.

I’m reading the wonderful book of Guy Spier: “The Education of a Value Investor” and I’m happy to find in his story that Guy learned the hard way what I taught to my son since a very young age. Actually my son was born in a Buffett World because of me. He knows Buffett and Graham have been my only business school. Studying him and Berkshire relentlessly is my only university. He knows since he was 8 or 9 that he will be better off staying away from Wall Street, and learn how to think and analyze with his own mind. We read together 2 pages a day of chapter 8 and 20 of the Intelligent Investor when he was 11 and decided to buy his first stock: Sony Corp around 33 dollars. BRK.B followed and after 4 years he is very well aligned to my results. At 13 I passed him a copy of “The super Investors of Graham’s and Doddsville” (one of my favorite Warren’s pieces of work of all time) and from that day we speak of “flips of the coins” and “orangutans” in the “Zoo of Omaha” like it’d be our own special lingo. Funny and educational (K Graham will approve immensely). I taught him that “piling up” doesn’t make sense if it is not meant to give back to society. And if not coincides with happiness in the “journey” it is not worth your while. Never trade agony for money. Never.

Now at 15 he wants to be a pilot, of which I’m thrilled as it should be every good father. The Zoo in Omaha in which I fed him after 15 years seems to have already paid off. He will be applying most of the analytical “Investor skills” while flying safely around the planet. And I’m sure he will underspend his income and become a hugely successful “amateur” in investing in common stocks. So great a pilot that he will beat the market over the long term. Needless to say, he will not need anymore my money to educate himself or paying back the loan of the flying school. If so I wish at that point I can give it all away. Regardless of the amount left.

Things will come full circle. I’m so curious how much an 11 years old value investor’s portfolio will grow when he will be 65. It will be the year 2071, time in which his net worth will probably explode. Berkshire will be still there as our permanent holding, and I may be not and I really wonder now how much a A-share will be worth in 2071. 4M? 5M? Hard to say. I’d ask Warren and Charlie if they have a clue. One thing I’m pretty much sure: my son will not get any dividend yet and neither there would be any split of the stock. Charlie would add: “..and rightly so”.

Happy Investing, 

Marco Turco

marco@blikebuffett.com    

 

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Last posts

From Omaha to Italy

Be like Buffett, Education

This is probably the last article I write in english. The language you use and how you use it make a difference in what you have to say. Communication skills are important. For istance the language of business is Accounting. Its building blocks are numbers and numbers are important to evaluate a company. (Check out “the three As” on my website www.marcoturco.com)

As a result if I want to communicate with accountants or with people interested in an estimate of a company, numbers can prevail sometimes and will play a fundamental part even if they must be in sync with facts and a reasoning that can support them. And these facts and the reasoning must be well expressed in a proper language understandable to the audience or the reader.

But what if the reasoning and description of the facts of a business want to be predominant over the numbers? What if you care more about establishing first a philosophy of investing and then take care of the figures and numbers of a business? Then communication skills become even more important.

It is not my ambition to reach a large number of people. I don’t consider myself a writer and nobody would. I just write probably to sharpen my communication skills. Most of the people that read and listen in english what I have to say about the market or Value Investing already know quite a bit about the shareholders letters or some key concept of investing followed by value investors all over the world. The language of investing is english as it is the language of Aviation.

However if I really want to do something different and useful for somebody who wants to know more about Buffett, Value and the stock market, I will want to switch to italian, and talk more to an italian audience than an english-speaking one. I don’t live in Italy anymore since some years now, even though I come back every summer, but I always found a deep gap among the italian “experts” (the ones that can read everything in english directly from the source, follow the videos and podcasts and the shareholder meetings and what have you) and the “beginners” (youngsters or amateurs that find in the language barrier the main obstacle to fully understand what Buffett, Munger or Graham really have to say). Moreover the italian press and pundits often write unaccurately lame articles flooded with too trite assemblages of the main lessons of Buffett about investing, life and the market.

In actuality more than one italian friend, partner or reader asked me recently to be : simple, clear and less “expert-oriented” and more in favour of an hypothetycal non-professional italian student or want-to be-investor, eager to learn about the Art and Science of Omaha. Thanks to Buffett the “Zoo of Superinvestors” of Omaha went global.

So let’s start to feed a new generation of SuperInvestors of the future. Let’s assume this new zoo can be in Italy. Like I said, at the end of the day I write for myself, for my own pleasure and to remind myself of all the good lessons and achievements I earned from studying the masters. This is my canvas and in my own world I can paint whatever I want. It is my tune, and I spent my entire life studying harmony to choose the chords that I love. Investing is not different. If you want to build your own portfolio, it is like your own composition. You studied so much harmony and tunes composed by the masters that now it’s your turn to write down your chords and notes.

Let’s start from the next article: after all the comments around the world in english, I will add a comment in italian about the Warren Buffett’s “Letter to Shareholders” that the Oracle just published, february 25th 2023.

Will I be able to pass along to a very small italian audience the joy of giving more than taking? The infrequency with which we shareholders opt for look-at-me assets and dynasty-building?

I’ll try to do my best to translate in italian the “Spirit of Omaha”.

Cordially,

Marco Turco

I look forward to hearing from you in english or italian: 

marco@blikebuffett.com 

L’importante è che nevichi (The unflagging desire)

Be like Buffett, Discipline

Dear Friends, Partners and Intelligent Investors,

La forza di gravità del mercato è la combinazione di due influenze determinanti : l’inflazione e i tassi di interesse. L’azione della FED è volta a frenare l’inflazione (alzando i tassi) e “creando” un accenno di recessione o frenando l’economia americana che ha viaggiato dal 2020 ad oggi a velocità molto sostenuta. La disoccupazione è solo al 3,4percento e veniamo da una crescita costante dal 2010, ininterrotta per 12 anni, e frenata solo per pochi mesi dalla pandemia nel marzo 2020.

Wall Street ha reagito con una frenata dell’ S&P 500 equivalente a -15percento da inizio anno, correggendo probabilmente una previsione precedente troppo ottimistica e tipica dei mercati quando crescono per molti anni di fila. Nel 1962 accadde qualcosa di molto simile.

Io ritengo, analizzando ogni giorno i fondamentali di aziende e i dati economici del paese, che si tratti di una correzione appunto e non di una bolla. Sono convinto pero’ che durerà ancora a lungo e non solo un anno o due come alcuni analisti ritengono. Di solito la storia ci insegna che per calmare l’inflazione i tassi d’interesse (Fed funds rate) devono allinearsi o andare sopra il tasso d’inflazione. Il 2 novembre scorso la Fed ha alzato i tassi al 4percento. L’inflazione è al 6,3percento (Core CPI).

E’ evidente che un ulteriore rialzo dei tassi è piu’ che prevedibile, ed i suoi effetti non possono considerarsi “immediati”. Piu’ a breve e benefico sarà un ulteriore abbassamento dei prezzi delle azioni. Le aziende piu’ deboli e maggiormente indebitate soffriranno di piu’ (e saranno costrette ad emettere ulteriori note o corporate bonds per finanziarsi a tassi molto piu’ alti) ma le aziende forti e meravigliose (con poco o pochissimo debito) sono e saranno impattate molto meno e diventeranno occasione di acquisto per gli investitori intelligenti e preparati. E’ sempre stato cosi’ e stavolta non sarà differente.

E’ in effetti cio’ che è già accaduto da inizio 2022 a noi e a MTCapital. Vediamo come e perchè:

Il 31 percento del nostro intero portafoglio è investito in BERKSHIRE HATHAWAY che da inizio anno registra un +11percento circa.
Un altro 30 percento del portafoglio è nel settore bancario e in una compagnia specializzata in carte di credito corporate e finanziamenti sulla salute di persone e pets. Quanto la gente è disposta a pagare in USA e indebitarsi, soprattutto attraverso una carta di credito, per la salute dentale o le cure del proprio animale domestico è sorprendente. In un momento di inflazione crescente vincono i business dai servizi essenziali ed eccellenti che possono permettersi di alzare i prezzi senza perdere clienti.
MT Capital possiede pezzi di questi business ed intende aumentare le posizioni in questo senso in futuro, quando e se i prezzi saranno ancora piu’ ragionevoli.
In effetti dal 29 settembre 2022 lo abbiamo già fatto. Cio’ che ho acquistato  da quella data ad oggi performa a +19,84percento. 

Ancora una volta è l’investimento sul reale Valore dell’azienda che dimostra che tutti i “Value Investors” a differenza dei day-traders, bond holders, options gamblers, short sellers etc etc. riescono a performare meglio; anzi molto meglio, soprattutto nei momenti di “crisi dei mercati” e a difendere i risparmi dei propri clienti dall’inflazione.

E ADESSO UMILTA’

Quindi S & P 500 -15,00percento, MT Capital +1,57percento da inizio anno e +7,00percento total gross return negli ultimi 6 mesi.
L’errore piu’ comune del money manager a questo punto è pensare di essere “diverso”, immune da errori grazie alla sua bravura denotata ovviamente da questi risultati.

Invece ci saranno cali e segni meno, e ben vengano. Stiamo, come analizzato precedentemente, attendendo correzioni al ribasso piu’ che al rialzo. Per noi “trouble is opportunity”.

Abbiamo ancora circa un 10percento del portafoglio in liquidità e soprattutto sappiamo dove e come impiegarla. Gradirei averne avuta un 20percento, ma abbiamo aggressivamente (e troppo presto per colpa mia) già comprato 3 compagnie cinesi che riteniamo in 5 / 10 anni possano darci risultati straordinari. Ora, sono tutte col segno meno.

Siamo alla ricerca di nuovi capitali e investitori astuti che condividono la nostra filosofia di lungo termine. Il fossato costruito attorno ai businesses che possediamo sarà intatto tra 10 e anche 20 anni (e piu’) a nostro avviso. Chi mi conosce molto bene sa che “B like Buffett” è Be fino in fondo per me. “I walk the talk”: le mie azioni Berkshire sia personali che in MT Capital sono “committed” all’eternità e alla filantropia. Il mio compito, divertimento e passione è “to pile up”. A 46 anni è troppo presto (spero!) per dire chi beneficerà del “pile down”. Che la neve “is falling down” come diceva Charlie Brown guardando il cielo, oppure “No, it’s coming up” gli rispondeva Lucy guardando il terreno, l’importante è che nevichi.

Per ora sono concentrato sull’obiettivo in maniera “newtoniana”, cioè ossessivamente non-distraibile. C’è una lista di rinunce (come ho imparato da Arnold Van Den Berg) che ho già accettato e fatto mia dentro di me per raggiungere il mio obiettivo. L’obiettivo è garantire a lungo termine quei risultati oltre la mediocrità e la media che solo i piu’ ricchi di pazienza sanno ottenere, trasformando quest’ultima in vera, durevole ricchezza. Il compito non è facile. Tutti possono fare bene a Wall Street per qualche anno. Pochi, quasi nessuno sa essere granitico e dare risultati per 20 o 30 anni. O piu’. (Come i miei principali riferimenti Buffett, Schloss, Fisher, Templeton). Bisogna leggere e analizzare bilanci e financial reports fino a diventare blu. Ma è l’unica strada.

Solo questa umiltà e disciplina puo’ darmi una piccola chance di riuscire anche solo ad avvicinarmi ai risultati dei grandi, risultati a cui aspiro per i miei clienti e partners. Fare benino e fare “la media” è quasi da tutti a Wall Street. Andare anche solo un poco oltre la media richiede una costanza, un sudore di analisi e studio, un “tiro bestiale”. E tempo. Warren Buffett, Walter Schloss, ma anche i piu’ “giovani” Nick Sleep o Bill Miller non sono gente “normale”. Ma nel mondo dell’investimento quando ci sono passione e determinazione, sono come debito e ignoranza : due miscele esplosive. La prima verso la ricchezza, la seconda verso il disastro.

Il mio lavoro è evitare la seconda miscela e non perdere mai la prima.

In attesa della “lunga poesia” annuale, cioè la lettera del prossimo 30 giugno 2023, che grazie a Warren è diventata un “genere letterario” a se’ stante nel mondo dei money managers, l’occasione è gradita per augurare a tutti “Happy Holidays” ed

Happy Investing e Felice Risparmio

Marco Turco
Naples, Florida Dicembre 2nd 2022
+1 (954) 632 9689
marco@blikebuffett.com

 

DISCLOSURES: the discussions, outlook and viewpoints featured are not intended to constitute investment advice or consulting service. MT Capital is a privately held investment firm not open to every investor or prospective client. A description of the firm’s business practices is available upon request. 

On a wall in Omaha…

Be like Buffett, THE BUSINESS OF LIFE

Warren E. Buffett was born the 30th of august 1930 in Omaha, Nebraska.

As we salute his 92nd birthday today we also humbly celebrate the 4th year of this blog and website.

When in the sixties in London people wrote on the walls of the city : EC IS GOD (Eric Clapton is God) a long, fortunate career was about to begin for the great Eric. His guitar playing and especially his voice was going to get better and better through the decades.

So,hoping nobody is offended, we would write today with the same spirit on a wall of the zoo of Omaha : WB IS GOD- just to make sure that a long, fortunate career is yet to come for Mr. Buffett too.

Even though there is a possibility that He will never die- (the famous black swan) we are sure that, no matter what may happen in a distant future, his legacy will live on for a very very long time.  The values to apply in life, the principles to master in business will remain in our hearts and in the minds of many students and people around the world.

Shareholders and an outstanding management team at Berkshire owe to Buffett (and Charlie Munger) a lot more than an awful amount of money.

Life is precious as it is the pursuit of happiness. Warren taught us how happiness can be achieved by everyone.

That’s what this blog, this website and “be like buffett” mean and are about.

Happy Birthday Warren

Respectfully and Thankfully, 

Marco

 

Naples, why not?

Uncategorized

Wanna move to the Bahamas? Sir John Templeton achieved better results from there for his Fund than the previous 20 years spent living in Wall Street. And what about Aruba or any place in the Caribbean?

Well, they are all wonderful and many more we can add to the list. But I always try to make things happen and there is a place that I like even more: I love Naples, Florida.  So I moved there and I tell you why:

I’m a big fan of the States, so I’m not that much enticed anymore from living in Europe (which I did for a long time) or abroad in general. I lived in Rome for years and in LA for a shorter period, and often visited big crowded cities. That’s what I enjoyed. Then all of a sudden I turned 40 in 2016. A new chapter in my life and a new path to build wealth began.I felt that a small but active and productive city, with lovable people, the sun shining all year round and hopefully by the sea, was my ideal. Two years of research, failures, illusions, disappointments but then in 2018 I was with my son for the first time in Naples, Florida. At the time I already committed some money to an investment not far from there, in Sunrise, 25 miles north of Miami.  So at first I moved there. I’m patient and Naples remained the target. Now that the goal became reality let me share with you some of the qualities belonging to this place I now call home with extreme pleasure:

Caveat: I love working and I’m against retirement and against too many days off  because I love what I do, so I don’t feel like working most of the days of my life. In fact typically my schedule doesn’t change much during the weekends. My job gives me freedom and independence. If I want, I’m free to change my schedule anytime. I always make plans (short-term, long-term and very very long-term) but to fullfill them I’m ready to be flexible.

1.Naples is perfect. It is a city in which if you want you can retire (consistently ranking among the top places to retire actually) but you can also remain in the business and stay active. Naples is home to more “Fortune 500 CEOs” than any other community in the nation.

2.At the same time if you feel your day is done and you want to relax and go to the beaches, you have wonderful options and you can do it all-year round. Naples ranks as the number 1 “best U.S. beach town to live in”. by Travel and Leisure 2021

3.People are hospitable and still there is a sense of community and it is worth to get involved. Naples ranks number 2 on the 2020 “Best small city in America” for natural resources, prosperity, and people.

4.Dining and shopping are great too. Huge variety and top-notch quality.

5.Naples scores high in residents’ health and well being and touts the lowest crime rate of any metropolitan area in Florida

6.There’s not only an enviable quality of life but also a rich cultural offer and a potent philantropic spirit, that is something as you know I really do care about and from which I wish to learn a lot in the future. Neapolitans are higly affluent (the top 1percent enjoys $5.6 million in income annually that is by far a lot more than the average of $1.3 million for the wealthiest 1percent nationwide). So from the luckiest ones you do want to expect to give back more than the average rich individual.

In conclusion it is for me at the same time a pleasant and inspiring place. I couldn’t ask for more.

 

Marco Turco, Naples FL

Any comment Feel free please to reach out at :  marco@blikebuffett.com

Important Note: I owe data and statistics I used in this article to “Naples Illustrated” 2022 One hundred Collier County’s most influential business leaders issue

“Personal History” by Katharine Graham

Be like Buffett, Be thankful, be lovable, THE BUSINESS OF LIFE

 

“Personal History” is Katharine Graham’s autobiography. A memoir that shines for its honesty, the remarkable wide range of stories and people she met. I’m a voracious reader of biographies, and I found this one wonderful. The Washington Post saga is a lesson in business and life in itself that should be taught. It contains the power of a family driven and committed to its passion and business. It shows the magic of consistency and persistence in building a dream more than a newspaper. It’s the story of years struggling under the radar and years with great economic loss endured by Katharine Graham’s family until the genius of Kay’s husband Phil Graham took over. I obviously grabbed the book because of Warren. (1 dollar at a book sale in Bonita Springs! I proposed successfully to pay for it 2 dollars knowing it was going to be such a good book worth much more than the 15.00 priced on the cover). I was right. I will pause a bit on the pages in which Buffett pops up, but the lessons from this personal history are multiple. I would say the 625 pages are an endless source of teachings about how to react to a personal tragedy (Phil Graham shot himself in the basement of their house) as well as how difficult was to run a newspaper through hard times and big challenges. The challenges accepted gradually but strongly and courageously by a woman in a time in which all the newspapers and boards in general were run by men, and only men. A time in which unions and scandals were going strong.

The story encompasses crises and victories as huge and critical  as inspiring : the Pentagon Papers, Watergate, the strikes of the early seventies. Thrown without her will and consent by the husband’s suicide in a business in turmoil, Katharine Graham overcame her insecurity to finally discover herself and her potential. In a fascinating adventure he accepted to fight to survive personally and financially. The burden never became less complicated but Katharine Graham faced every obstacle. Only this way they became lighter to carry through the bumps and curves of the journey. A journey she never looked back to refuse, neglect , not to endure or simply live. It is to me (and after reading will be to you) so clear why such a woman was so interesting a friend and a business partner for Warren Buffett.

For the Buffett students the investment in the Washington Post in the early 70s is pretty much straightforward and typical to understand. The passion and competence of the sage in the newspapers field was proverbial. The bargain was in plain sight considering the price of the stock. The entire group (not only the Post) was selling for roughly 100 million dollars compared to an intrinsic value of at least 400 million. Problems were always present and others will come for the management but trust in the Graham family to face them, and the ridiculous selling price were enough margin of safety for Warren. Add his famous patience and long term look together with his presence on the board in the following years and you will have a perfect picture of a Buffett deal.   Also Warren will be tireless and always responsive in advising Katharine Graham and actually became her teacher and Pygmalion from a business point of view. He played a big part in the repurchase of shares at such an undervalued stock price, and was so immensely useful in many other managerial decisions and critical moments.

The book is a gold mine not only for the Buffett student but for every business enthusiast and why not, for everybody that really likes a good, true story of courage and fulfillment. I wouldn’t add much more to let Katharine Graham speak for herself, since she does it tremendously well. I learnt a lot from this book in the last month in which it was with me everyday and everywhere. I was so eager to see “what’s next? What’s next?”. I’m sure soon I will read it again. Now, wrapping up for the Buffett maniacs like me, here’s few lines that will sound like music to our ears. A music for us, “Buffettists” that Graham in the book really played so well:

“(…).And it led to some sort of rationale that I can live with about the goal of each individual being to fulfill the unique potential within-and do it to the utmost…This is what you do Warren-or you are in the process of doing. Your intensity, concentration and drive almost scare me, but are luckily and happily relieved by those other things you also possess-decency, gaiety, enjoyment and warmth.”

Let’s write down all of those qualities on a piece of paper and keep them handy in your heart.

Happy Investing,

Marco Turco

marco@blikebuffett.com

“

Berkshire in 2071, a dad’s dream

Be like Buffett, Education

Let me be clear from the get-go: I’m not against business schools or formal training of any sort. You have to learn the basic tools and they will underpin all of your assumptions and decisions about investing and the market. But, and this is a big BUT, the way and the talent you may develop to make money can come from a different education as well.

I have a completely different and unconventional education in business if compared to any professional investor out there. You can also say that I’m an amateur. As long as my results for my partners and me are way beyond average and/or outstanding, I really don’t care. I rely upon the Graham’s line in the “Intelligent Investor” in which more or less he said that some regular non-professional investors are able to beat professionals at their own game. How? Basically, if they are equipped with the adequate attitude towards the market. The famous temperamental quality that Buffett stated very clearly decades ago and still he will confirm today. Human nature will not change now and fifty years from now. And so the human animal. The “academics” will still be teaching you all kinds of things to make you look like a “high priest” and not an amateur; but how about to make money? How about make 20, 30 or 50percent a year from your small portfolio? That’s another story.

When I was in Warsaw I took a course to prepare for CFA, and one of the “academics” was frequently lamenting how amateurs were acting in the market. Clearly he was so keen in calculating a duration of a bond that he simply forgot about all the rest to make money in the investment world, and he neither was himself an amateur or a professional. It was just clear to me as a lifelong Buffett student that he never managed money in his entire life.

I’m reading the wonderful book of Guy Spier: “The Education of a Value Investor” and I’m happy to find in his story that Guy learned the hard way what I taught to my son since a very young age. Actually my son was born in a Buffett World because of me. He knows Buffett and Graham have been my only business school. Studying him and Berkshire relentlessly is my only university. He knows since he was 8 or 9 that he will be better off staying away from Wall Street, and learn how to think and analyze with his own mind. We read together 2 pages a day of chapter 8 and 20 of the Intelligent Investor when he was 11 and decided to buy his first stock: Sony Corp around 33 dollars. BRK.B followed and after 4 years he is very well aligned to my results. At 13 I passed him a copy of “The super Investors of Graham’s and Doddsville” (one of my favorite Warren’s pieces of work of all time) and from that day we speak of “flips of the coins” and “orangutans” in the “Zoo of Omaha” like it’d be our own special lingo. Funny and educational (K Graham will approve immensely). I taught him that “piling up” doesn’t make sense if it is not meant to give back to society. And if not coincides with happiness in the “journey” it is not worth your while. Never trade agony for money. Never.

Now at 15 he wants to be a pilot, of which I’m thrilled as it should be every good father. The Zoo in Omaha in which I fed him after 15 years seems to have already paid off. He will be applying most of the analytical “Investor skills” while flying safely around the planet. And I’m sure he will underspend his income and become a hugely successful “amateur” in investing in common stocks. So great a pilot that he will beat the market over the long term. Needless to say, he will not need anymore my money to educate himself or paying back the loan of the flying school. If so I wish at that point I can give it all away. Regardless of the amount left.

Things will come full circle. I’m so curious how much an 11 years old value investor’s portfolio will grow when he will be 65. It will be the year 2071, time in which his net worth will probably explode. Berkshire will be still there as our permanent holding, and I may be not and I really wonder now how much a A-share will be worth in 2071. 4M? 5M? Hard to say. I’d ask Warren and Charlie if they have a clue. One thing I’m pretty much sure: my son will not get any dividend yet and neither there would be any split of the stock. Charlie would add: “..and rightly so”.

Happy Investing, 

Marco Turco

marco@blikebuffett.com