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

90 years and still rockin’

Be like Buffett

It’s 90 years and the best is yet to come. Many people, individual investors and business entities of all kinds in America and all over the world thank you today Mr. Buffett.  They will do it in many ways. My personal tribute today is celebrating 1 year of this little blog that would be an unpretentious homage to you. It’s a humble way to say thank you for all the priceless lessons that since many years are there available for the scrupulous Buffett-student and all for free. They are there available in your letters to shareholders, in the shareholders meetings (hours and hours of the best University in the world with Mr. Munger).

I’m proud today like many others to be a part of the Berkshire Family, to own with my 13 y.o. son a piece of the business. A business that is more than that. It is our values, our positive cult, our investment credo. A cast of mind for a happier life. Something that is here to stay and not for sale.  I’m sure that in exchange of our loyalty you are there today Mr. B still painting this beautiful canvas for us. Instead of reading this article and many other movies and magazines about you today, you are there, painting, with the same passion you had back in the day.

Happy Birthday Mr. Buffett

Blogs

Uncategorized

Il primo suggerimento sono due blogs: “Rational Walk” ha bisogno di poche presentazioni. Se avete lo spirito giusto e siete appassionati di tutto cio’ che Buffett ha da dire non potrete che trovare fantastica questa fonte di ispirazione. Non solo, ma suggerimenti di letture, analisi di come Berkshire si muove sul mercato e su acquisizioni, sono molto aggiornate. E’ un blog che mette in pratica cio’ che il mestiere di investire richiede: “Pensare”. E pensare in termini razionali ed autonomi, senza andare in giro a raccogliere opinioni e fare sondaggi. Siamo alla ricerca di fatti, e che siano valutabili. “Rational Walk” ve ne dà la possibilità. Molto meglio di me e del mio blog. Io lancio solo scintille, suggerimenti. Accendere un fuoco che si espanda e soffiarci sopra spetta a ciascuno di noi. Alla disciplina ed al talento di ciascuno, alla nostra iniziativa ed al nostro coraggio. (The first quality of a money manager is a “temperamental quality” not an “intellectual quality”). E meno male, nel mio caso almeno.

Vi raccomando anche un altro interessante blog a cura di Nick Maggiulli : “ofdollarsanddata”. Debbo fare i miei complimenti a Maggiulli, che non conosco di persona, ma sospetto comunque dal cognome abbia un “italian heritage” perchè ha impostato il blog non solo sull’analisi di dati e strumenti di investimento ma ha un tocco “umano” nello scrivere e scegliere gli argomenti che condivido.

I posts sul “Rischio”, cosa realmente è “rischioso” e imprevedibile ed un’analisi di come approcciare i rischi in generale nella vita, su errori e “regrets” sono ottimi spunti e scintille.

Inoltre, l’obiettivo finale di vivere una vita piu’ serena e di soddisfazioni emotive e personali puo’ essere perso di vista se non ricordiamo a noi stessi che un mero accumulo di ricchezza senza un fine ultimo piu’ alto non ha molto senso. Nè ha senso a costo di sacrifici distruttivi del nostro benessere o di quello altrui. Questo è un mio pensiero ma credo che Maggiulli, da cio’ che si respira negli articoli possa condividere. Sarebbe abbastanza “unamerican” e non BuffettStyle il contrario. Provero’ a chiederglielo. Non sono molto della sua opinione riguardo il post sull’oro. Ma anche li’ Maggiulli esprime un’opinione razionale che puo’ essere anche accettabile e “suitable” per alcuni. Ma non per me.

Ultimo consiglio è iscrivervi alla newsletter “Buffett Watch” della Cnbc a cura di Alex Crippen. Ogni venerdi vi invia un resoconto breve, esaustivo, preciso di cio’ che è rilevante sapere sia successo in settimana (dichiarazioni, interviste, articoli su e con Buffett, ed i suoi “movimenti noti” e a volte meno noti). Ringrazio Alex per il suo personale apprezzamento al mio approccio “filantropico” che ovviamente deriva dall’esempio del maestro ed in quell’ottica soprattutto va vista la B di BeLike Buffett e tutto lo scopo di questo piccolo blog. Per questo l’introduzione a questo blog è quella che leggete appena aprite il sito. Essere avidi è un atteggiamento da poveri. Essere generosi è un atteggiamento da ricchi. E per questo chiudo ricordando Mrs. Doris Buffett (1928-2020) spentasi il 4 Agosto scorso non dopo aver donato sè stessa ed il suo patrimonio a chi è colpito da pesanti colpi di sfortuna, che nella vita, no matter how good you are, succedono eccome. Senza colpa nei riceventi. L‘”Education” è cio’ che per noi conta cosi’ tanto per migliorare il mondo e uscire dai colpi di sfortuna. O impiegare bene la nostra Fortuna, ed essere generosi. Doris Buffett ha speso cio’ che possedeva per questo fine con la “Sunshine Lady Foundation” e non solo. Ecco perchè “Giving all away” ha un senso molto razionale e profondo. Se sarete abbastanza fortunati vorrete che il vostro utimo assegno rimasto nel blocchetto sia scoperto, quando sarete anche abbastanza morti.

Italy, vacations today, a country “vacant” tomorrow?

Uncategorized

Consistency in reading, like in everything else in life, is critical. However some people find the time to read only during summertime or generally speaking during vacations (I dread the word..). Here follows some suggestions for everyone interested in making the best investment always possible and available: the investment in yourself. The best and irreplaceable asset you may have is you.

For tomorrow the little paragraph below will be in Italian and english. I will suggest some books and two blogs I find valuable and useful to change your mind about many stereotypes, that are not conducive to good profits. Here’s why: we complain about the level of financial education in the States and almost everywhere. But I can guarantee you that even commonsense and simplicity are killed everyday on the road by financial experts and professional money managers or consultants in countries like Italy, that should be anyway a small but developed economy. Inept politicians and incompetent professionals make Italy an unattractive place from a business and investing standpoint. Decisions to make the situation curable are really distant down the road. And it’s like three decades that the conflicts rage on and nothing changes.That’s why I must only have faith in very young students ready to make the extra-effort and the extra-work in the field of educating themselves and reaching a wider international view.  Eventually, when things will be changing and reforms in Italy will be made(really?),  this new generation will be so audacious and equipped to invest in the country again, or otherwise have success abroad and go away like many did.

“LEAVE THE CANNOLI, BRING THE BOOKS” (tomorrow August 16th some books and two blogs for a different point of view on investing and the business of Life)

 

In difesa di Buffett? Berkshire is a Spirit …

Be like Buffett

Ma ne ha bisogno? Non scherziamo. Mi sento in dovere però di rispondere agli amici italiani che pensano che Buffett abbia perso il tocco magico or “something of the sort”… Qualcuno mi ha addirittura telefonato qui in America, preoccupato.

Sto leggendo “The Patriarch” by David Nasaw, biografia di Joseph P. Kennedy, il padre di JFK. Uno stock-picker di rara lungimiranza. In un arco di poco meno di 20 anni ne ha sbagliate poche, anzi nessuna! Un “Oracle”, che ha venduto prima della Big Depression quasi vaticinando il crollo ed uno dei pochi a continuare a creare “ventures” di successo in campi molto differenti fra di loro nei successivi anni fino a diventare il primo chairman della SEC chiamato da Roosvelt nel 1934.

Ora stiamo parlando di 2 o quasi 3 decadi di risultati eccezionali di una business mind prodigiosa. Ma, tranne il profitto, a volte molto mordi e fuggi, una vera filosofia di investimento capace di durare 70 anni non c’era in lui. E’ stato un grande e ha vissuto e prosperato in tempi turbolenti (a dir poco). Ma, nessuno, e dico nessuno puo’ vantare un curriculum di risultati ed una creazione di ricchezza continua come Berkshire Hathaway e Warren Buffett ( e Munger). Berkshire è una famiglia. Una condivisione di principi e valori di base prima di tutto . Essi permeano la vita dei businesses che BRK possiede e permeano i loro managements in modo totale. La qualità e la dedizione dei managers di un cosi’ vasto assembramento di businesses è semplicemente un evento unico in “corporate America” ed a livello globale. E nessuno è riuscito a copiare od imitare con risultati vagamente accettabili cio’ che Berkshire sotto la guida di Buffett fa da circa 55 anni.

La qualità degli shareholders va di pari passo. Berkshire attrae persone che si sentono proprietarie fino in fondo con lo stesso atteggiamento con cui trattano il proprio business di proprietà, la propria casa, i valori che vogliono tramandare ai propri figli. Gente che vota al 98percento di maggioranza di non volere un dividendo perchè è valso sempre di piu’ re-investirlo nel futuro. The Magic of Compounding. Value investing versus speculation rende Berkshire uno stile, un come, piu’ che un qualcosa. Gli azionisti BRK hanno nel proprio Dna una visione della vita simile e non mi sento di essere “too extreme” dicendo questo. “Every good Investment is a Value Investment by definition”!

Errori ne facciamo tutti. Warren sbaglia quando non segue Warren. Nel 1996 usciti indenni a fatica dal mondo delle Airlines, promise di avere in tasca un numero stile “alcolisti anonimi” da chiamare prima di ricadere nell’errore di investire nelle Airlines “again”. Quanti altri billions ha fatto dal 1996 ad oggi Buffett muovendo verso l’alto un portafoglio enorme! Chi è in grado di muovere in maniera significativa e costante un oceano di liquidità arrivato a 128 miliardi di dollari. Muovere l’asticella o caricare il “fucile da elefanti” di Buffett è un gioco solo per Buffett!

Chi ride di Maradona che inciampa per un attimo sul pallone, guardasse le cifre del suo portafoglio titoli (anche se sono molti milioni..), poi i propri risultati dal 1951 (partiamo dall’impiego con Graham per convenzione)  e tornasse al campo di bocce. Sul prato verde io preferisco a palleggiare con i miei soldi un quasi 90enne, sempre sul pezzo, “up and running”, from Omaha, Nebraska.

Buona Domenica!

Don’t bet against Buffett

Be like Buffett

And at last I felt to write down my “no surprise” feelings about what happened in March at Berkshire, and about what has been said at the Sharholders meeting last May the 2nd.

“We didn’t find anything attractive”. In his own words continues: “That could change very quickly or it may not change”. It’s the usual good old Mr. B coyly giving all the answers giving you no answer at all, but telling you the truth. So we can only rely upon what has been done. Berkshire spent roughly 4 billions in purchasing stocks in march, 1.7 of which on repurchasing stocks. It means he found enough attractive the price of our own stocks, so to be re-purchased for treasury. Good news for all the shareholders. It didn’t happen again in April when repurchasing of stocks was zero. In April prices didtn’ make sense again for any moves. And march 23rd with the Dow at its low was not enough for a BIG move for Buffett. Why?

I think its a lesson that he said multiple times he learned from 2008 and nine. He was buying aggressively from september to october (I wrote about this in a previous article here) and recognised later it was too soon, too fast. “My timing was actually terrible” he said again last May the 2nd. The situation now is even more peculiar : a pandemic is different from a financial crash. So since Boredom and Patience are not a problem for the Oracle, at the end of the day, his reasoning makes sense. It’s like he said to himself: this thing is going to last. I’d like to wait and see and still be a huge Fort Knox of cash always ready for everything. Is this a move that will pay off more than any other in the future? Or some big opportunity in the trouble of last march is gone with the wind and never going to come back? Nobody knows. But we know one thing for sure:

On one side of the equation there’s normal people that like the Buffett of many decades ago can (partially or totally)subscribe the following lines from Ben Graham:

“The investor who buys securities when the market price looks cheap on the basis of the company statements, and sell them when they look high on this same basis, probably will not make spectacular profits. But on the other hand, he will probably avoid equally spectacular and more frequent losses. He should have a better than average chance of obtaining satisafactory results. And this is the chief objective of intelligent investing”.
(B.Graham “The interpretation of financial statements” 1937 ed.pag.78)

Now, Buffett since decades from Graham achieves spectacular profits and became a ferocious learning machine since ever. This learning machine doesn’t go for satisfactory results. If he has to swing for average, he wouldn’t swing at all and wait. We swing, he doesn’t. Can he be wrong ? Of course he can. With Airlines again he was wrong. And not for the first time. But can he be right? Probabilities say yes, a lot. He doesn’t manage anymore small amounts of money, for which decisions can be easier to make. He didn’t even remember when asked by Becky Quick who and what Berkshire bought with just 462 million. Because they are peanuts for Berkshire. At this point It is so wonderful to be here and see what happens. Over the long run both the intelligent investor and the Man in Omaha will do fine and probably more than fine, like America will do. So the question is : would you bet against Buffett? Would you bet you can do better than he does under the same circumstances, with the same huge amount of money? I wouldn’t.

The best is yet to “appraise”

Be like Buffett

I consider myself a student of Buffett and like all the good arts, the more you study the subject, the more you try to refine the art the more you feel you are just scratching the surface of something bigger and deeper. The more you know the more you feel you don’t know. And, like in the study of music for example, it’s something that you enjoy. You don’t feel resentful about this process. It’s not frustrating, because at the same time you know that you are playing the game this year better than the last year and the year before. It’s a knowledge that accumulates just like Mr. B says. It’s fun to learn, it’s fun to discover what you don’t know. There can be failure and Buffet knows that, even when you have been put in practice everything that you should. Because some businesses are just tough, But you enjoy the journey anyway.

So, what surprises me the most, is that many students of Buffett are just talking about him in the same usual way using the same concepts and rules, all the time. All true and appropriate, no arguing with that. But it strikes me that almost everybody forgets to mention the never-ending process that underpins all the beautiful and valid rules you can learn from our man in Omaha: learn to evaluate a business. 

How to do that is not perfect science, and it doesn’t lead to a precise figure. And it doesn’t have to. At least not so precisely (remember our beloved margin of safety?)

But it’s a long process because it has a little bit more of an art than a science. And that’s exactly the giant leap of Buffett starting from Graham. And it takes a lot of both anyway. It takes skills, experience, knowledge, time. I will consider it like the rule number zero. Something you can not avoid  to be successful and to serve our investing purpose: to get our famous two birds in the bush tomorrow givin’up our bird in the hands we have today.

When will I get these birds in the future? And a what risk, or how sure am I? And how much I have to invest today for those birds in the bush ( a net present value) discounted at the appropriate rate.

As you see, this is not so popular among all the simple concepts of investing by Buffett because it’s a little bit more difficult to apply and even to understand. No tons of IQ, no rocket-science but a lot of experience, practice, good reasoning, and temperament. So easy, but that difficult! The “Super-Investor of Graham and Doddsville”, and many other words from the Oracle tell us that is doable, especially in a small scale. So again you can be yourself and you can be like Buffett. You can be successful in investing being like Buffett if you agree and understand that being like Buffett means to be able to evaluate a business. If you don’t get this, you will be ready to use a lot of other strategies available, that will be much better than common sense to your mind, but will lead you to so much poorer and mediocre results…. (to be continued…) 

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Last posts

90 years and still rockin’

Be like Buffett

It’s 90 years and the best is yet to come. Many people, individual investors and business entities of all kinds in America and all over the world thank you today Mr. Buffett.  They will do it in many ways. My personal tribute today is celebrating 1 year of this little blog that would be an unpretentious homage to you. It’s a humble way to say thank you for all the priceless lessons that since many years are there available for the scrupulous Buffett-student and all for free. They are there available in your letters to shareholders, in the shareholders meetings (hours and hours of the best University in the world with Mr. Munger).

I’m proud today like many others to be a part of the Berkshire Family, to own with my 13 y.o. son a piece of the business. A business that is more than that. It is our values, our positive cult, our investment credo. A cast of mind for a happier life. Something that is here to stay and not for sale.  I’m sure that in exchange of our loyalty you are there today Mr. B still painting this beautiful canvas for us. Instead of reading this article and many other movies and magazines about you today, you are there, painting, with the same passion you had back in the day.

Happy Birthday Mr. Buffett

Blogs

Uncategorized

Il primo suggerimento sono due blogs: “Rational Walk” ha bisogno di poche presentazioni. Se avete lo spirito giusto e siete appassionati di tutto cio’ che Buffett ha da dire non potrete che trovare fantastica questa fonte di ispirazione. Non solo, ma suggerimenti di letture, analisi di come Berkshire si muove sul mercato e su acquisizioni, sono molto aggiornate. E’ un blog che mette in pratica cio’ che il mestiere di investire richiede: “Pensare”. E pensare in termini razionali ed autonomi, senza andare in giro a raccogliere opinioni e fare sondaggi. Siamo alla ricerca di fatti, e che siano valutabili. “Rational Walk” ve ne dà la possibilità. Molto meglio di me e del mio blog. Io lancio solo scintille, suggerimenti. Accendere un fuoco che si espanda e soffiarci sopra spetta a ciascuno di noi. Alla disciplina ed al talento di ciascuno, alla nostra iniziativa ed al nostro coraggio. (The first quality of a money manager is a “temperamental quality” not an “intellectual quality”). E meno male, nel mio caso almeno.

Vi raccomando anche un altro interessante blog a cura di Nick Maggiulli : “ofdollarsanddata”. Debbo fare i miei complimenti a Maggiulli, che non conosco di persona, ma sospetto comunque dal cognome abbia un “italian heritage” perchè ha impostato il blog non solo sull’analisi di dati e strumenti di investimento ma ha un tocco “umano” nello scrivere e scegliere gli argomenti che condivido.

I posts sul “Rischio”, cosa realmente è “rischioso” e imprevedibile ed un’analisi di come approcciare i rischi in generale nella vita, su errori e “regrets” sono ottimi spunti e scintille.

Inoltre, l’obiettivo finale di vivere una vita piu’ serena e di soddisfazioni emotive e personali puo’ essere perso di vista se non ricordiamo a noi stessi che un mero accumulo di ricchezza senza un fine ultimo piu’ alto non ha molto senso. Nè ha senso a costo di sacrifici distruttivi del nostro benessere o di quello altrui. Questo è un mio pensiero ma credo che Maggiulli, da cio’ che si respira negli articoli possa condividere. Sarebbe abbastanza “unamerican” e non BuffettStyle il contrario. Provero’ a chiederglielo. Non sono molto della sua opinione riguardo il post sull’oro. Ma anche li’ Maggiulli esprime un’opinione razionale che puo’ essere anche accettabile e “suitable” per alcuni. Ma non per me.

Ultimo consiglio è iscrivervi alla newsletter “Buffett Watch” della Cnbc a cura di Alex Crippen. Ogni venerdi vi invia un resoconto breve, esaustivo, preciso di cio’ che è rilevante sapere sia successo in settimana (dichiarazioni, interviste, articoli su e con Buffett, ed i suoi “movimenti noti” e a volte meno noti). Ringrazio Alex per il suo personale apprezzamento al mio approccio “filantropico” che ovviamente deriva dall’esempio del maestro ed in quell’ottica soprattutto va vista la B di BeLike Buffett e tutto lo scopo di questo piccolo blog. Per questo l’introduzione a questo blog è quella che leggete appena aprite il sito. Essere avidi è un atteggiamento da poveri. Essere generosi è un atteggiamento da ricchi. E per questo chiudo ricordando Mrs. Doris Buffett (1928-2020) spentasi il 4 Agosto scorso non dopo aver donato sè stessa ed il suo patrimonio a chi è colpito da pesanti colpi di sfortuna, che nella vita, no matter how good you are, succedono eccome. Senza colpa nei riceventi. L‘”Education” è cio’ che per noi conta cosi’ tanto per migliorare il mondo e uscire dai colpi di sfortuna. O impiegare bene la nostra Fortuna, ed essere generosi. Doris Buffett ha speso cio’ che possedeva per questo fine con la “Sunshine Lady Foundation” e non solo. Ecco perchè “Giving all away” ha un senso molto razionale e profondo. Se sarete abbastanza fortunati vorrete che il vostro utimo assegno rimasto nel blocchetto sia scoperto, quando sarete anche abbastanza morti.

Italy, vacations today, a country “vacant” tomorrow?

Uncategorized

Consistency in reading, like in everything else in life, is critical. However some people find the time to read only during summertime or generally speaking during vacations (I dread the word..). Here follows some suggestions for everyone interested in making the best investment always possible and available: the investment in yourself. The best and irreplaceable asset you may have is you.

For tomorrow the little paragraph below will be in Italian and english. I will suggest some books and two blogs I find valuable and useful to change your mind about many stereotypes, that are not conducive to good profits. Here’s why: we complain about the level of financial education in the States and almost everywhere. But I can guarantee you that even commonsense and simplicity are killed everyday on the road by financial experts and professional money managers or consultants in countries like Italy, that should be anyway a small but developed economy. Inept politicians and incompetent professionals make Italy an unattractive place from a business and investing standpoint. Decisions to make the situation curable are really distant down the road. And it’s like three decades that the conflicts rage on and nothing changes.That’s why I must only have faith in very young students ready to make the extra-effort and the extra-work in the field of educating themselves and reaching a wider international view.  Eventually, when things will be changing and reforms in Italy will be made(really?),  this new generation will be so audacious and equipped to invest in the country again, or otherwise have success abroad and go away like many did.

“LEAVE THE CANNOLI, BRING THE BOOKS” (tomorrow August 16th some books and two blogs for a different point of view on investing and the business of Life)

 

In difesa di Buffett? Berkshire is a Spirit …

Be like Buffett

Ma ne ha bisogno? Non scherziamo. Mi sento in dovere però di rispondere agli amici italiani che pensano che Buffett abbia perso il tocco magico or “something of the sort”… Qualcuno mi ha addirittura telefonato qui in America, preoccupato.

Sto leggendo “The Patriarch” by David Nasaw, biografia di Joseph P. Kennedy, il padre di JFK. Uno stock-picker di rara lungimiranza. In un arco di poco meno di 20 anni ne ha sbagliate poche, anzi nessuna! Un “Oracle”, che ha venduto prima della Big Depression quasi vaticinando il crollo ed uno dei pochi a continuare a creare “ventures” di successo in campi molto differenti fra di loro nei successivi anni fino a diventare il primo chairman della SEC chiamato da Roosvelt nel 1934.

Ora stiamo parlando di 2 o quasi 3 decadi di risultati eccezionali di una business mind prodigiosa. Ma, tranne il profitto, a volte molto mordi e fuggi, una vera filosofia di investimento capace di durare 70 anni non c’era in lui. E’ stato un grande e ha vissuto e prosperato in tempi turbolenti (a dir poco). Ma, nessuno, e dico nessuno puo’ vantare un curriculum di risultati ed una creazione di ricchezza continua come Berkshire Hathaway e Warren Buffett ( e Munger). Berkshire è una famiglia. Una condivisione di principi e valori di base prima di tutto . Essi permeano la vita dei businesses che BRK possiede e permeano i loro managements in modo totale. La qualità e la dedizione dei managers di un cosi’ vasto assembramento di businesses è semplicemente un evento unico in “corporate America” ed a livello globale. E nessuno è riuscito a copiare od imitare con risultati vagamente accettabili cio’ che Berkshire sotto la guida di Buffett fa da circa 55 anni.

La qualità degli shareholders va di pari passo. Berkshire attrae persone che si sentono proprietarie fino in fondo con lo stesso atteggiamento con cui trattano il proprio business di proprietà, la propria casa, i valori che vogliono tramandare ai propri figli. Gente che vota al 98percento di maggioranza di non volere un dividendo perchè è valso sempre di piu’ re-investirlo nel futuro. The Magic of Compounding. Value investing versus speculation rende Berkshire uno stile, un come, piu’ che un qualcosa. Gli azionisti BRK hanno nel proprio Dna una visione della vita simile e non mi sento di essere “too extreme” dicendo questo. “Every good Investment is a Value Investment by definition”!

Errori ne facciamo tutti. Warren sbaglia quando non segue Warren. Nel 1996 usciti indenni a fatica dal mondo delle Airlines, promise di avere in tasca un numero stile “alcolisti anonimi” da chiamare prima di ricadere nell’errore di investire nelle Airlines “again”. Quanti altri billions ha fatto dal 1996 ad oggi Buffett muovendo verso l’alto un portafoglio enorme! Chi è in grado di muovere in maniera significativa e costante un oceano di liquidità arrivato a 128 miliardi di dollari. Muovere l’asticella o caricare il “fucile da elefanti” di Buffett è un gioco solo per Buffett!

Chi ride di Maradona che inciampa per un attimo sul pallone, guardasse le cifre del suo portafoglio titoli (anche se sono molti milioni..), poi i propri risultati dal 1951 (partiamo dall’impiego con Graham per convenzione)  e tornasse al campo di bocce. Sul prato verde io preferisco a palleggiare con i miei soldi un quasi 90enne, sempre sul pezzo, “up and running”, from Omaha, Nebraska.

Buona Domenica!

Don’t bet against Buffett

Be like Buffett

And at last I felt to write down my “no surprise” feelings about what happened in March at Berkshire, and about what has been said at the Sharholders meeting last May the 2nd.

“We didn’t find anything attractive”. In his own words continues: “That could change very quickly or it may not change”. It’s the usual good old Mr. B coyly giving all the answers giving you no answer at all, but telling you the truth. So we can only rely upon what has been done. Berkshire spent roughly 4 billions in purchasing stocks in march, 1.7 of which on repurchasing stocks. It means he found enough attractive the price of our own stocks, so to be re-purchased for treasury. Good news for all the shareholders. It didn’t happen again in April when repurchasing of stocks was zero. In April prices didtn’ make sense again for any moves. And march 23rd with the Dow at its low was not enough for a BIG move for Buffett. Why?

I think its a lesson that he said multiple times he learned from 2008 and nine. He was buying aggressively from september to october (I wrote about this in a previous article here) and recognised later it was too soon, too fast. “My timing was actually terrible” he said again last May the 2nd. The situation now is even more peculiar : a pandemic is different from a financial crash. So since Boredom and Patience are not a problem for the Oracle, at the end of the day, his reasoning makes sense. It’s like he said to himself: this thing is going to last. I’d like to wait and see and still be a huge Fort Knox of cash always ready for everything. Is this a move that will pay off more than any other in the future? Or some big opportunity in the trouble of last march is gone with the wind and never going to come back? Nobody knows. But we know one thing for sure:

On one side of the equation there’s normal people that like the Buffett of many decades ago can (partially or totally)subscribe the following lines from Ben Graham:

“The investor who buys securities when the market price looks cheap on the basis of the company statements, and sell them when they look high on this same basis, probably will not make spectacular profits. But on the other hand, he will probably avoid equally spectacular and more frequent losses. He should have a better than average chance of obtaining satisafactory results. And this is the chief objective of intelligent investing”.
(B.Graham “The interpretation of financial statements” 1937 ed.pag.78)

Now, Buffett since decades from Graham achieves spectacular profits and became a ferocious learning machine since ever. This learning machine doesn’t go for satisfactory results. If he has to swing for average, he wouldn’t swing at all and wait. We swing, he doesn’t. Can he be wrong ? Of course he can. With Airlines again he was wrong. And not for the first time. But can he be right? Probabilities say yes, a lot. He doesn’t manage anymore small amounts of money, for which decisions can be easier to make. He didn’t even remember when asked by Becky Quick who and what Berkshire bought with just 462 million. Because they are peanuts for Berkshire. At this point It is so wonderful to be here and see what happens. Over the long run both the intelligent investor and the Man in Omaha will do fine and probably more than fine, like America will do. So the question is : would you bet against Buffett? Would you bet you can do better than he does under the same circumstances, with the same huge amount of money? I wouldn’t.

The best is yet to “appraise”

Be like Buffett

I consider myself a student of Buffett and like all the good arts, the more you study the subject, the more you try to refine the art the more you feel you are just scratching the surface of something bigger and deeper. The more you know the more you feel you don’t know. And, like in the study of music for example, it’s something that you enjoy. You don’t feel resentful about this process. It’s not frustrating, because at the same time you know that you are playing the game this year better than the last year and the year before. It’s a knowledge that accumulates just like Mr. B says. It’s fun to learn, it’s fun to discover what you don’t know. There can be failure and Buffet knows that, even when you have been put in practice everything that you should. Because some businesses are just tough, But you enjoy the journey anyway.

So, what surprises me the most, is that many students of Buffett are just talking about him in the same usual way using the same concepts and rules, all the time. All true and appropriate, no arguing with that. But it strikes me that almost everybody forgets to mention the never-ending process that underpins all the beautiful and valid rules you can learn from our man in Omaha: learn to evaluate a business. 

How to do that is not perfect science, and it doesn’t lead to a precise figure. And it doesn’t have to. At least not so precisely (remember our beloved margin of safety?)

But it’s a long process because it has a little bit more of an art than a science. And that’s exactly the giant leap of Buffett starting from Graham. And it takes a lot of both anyway. It takes skills, experience, knowledge, time. I will consider it like the rule number zero. Something you can not avoid  to be successful and to serve our investing purpose: to get our famous two birds in the bush tomorrow givin’up our bird in the hands we have today.

When will I get these birds in the future? And a what risk, or how sure am I? And how much I have to invest today for those birds in the bush ( a net present value) discounted at the appropriate rate.

As you see, this is not so popular among all the simple concepts of investing by Buffett because it’s a little bit more difficult to apply and even to understand. No tons of IQ, no rocket-science but a lot of experience, practice, good reasoning, and temperament. So easy, but that difficult! The “Super-Investor of Graham and Doddsville”, and many other words from the Oracle tell us that is doable, especially in a small scale. So again you can be yourself and you can be like Buffett. You can be successful in investing being like Buffett if you agree and understand that being like Buffett means to be able to evaluate a business. If you don’t get this, you will be ready to use a lot of other strategies available, that will be much better than common sense to your mind, but will lead you to so much poorer and mediocre results…. (to be continued…)