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

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…) 

The best is yet to come

Be like Buffett

Your first approach to “Value” is critical. So it’s important to have and education about this as a young individual. Or, even if you don’t start very young, your first understanding of investing is equally important. I find totally unuseful to talk for hours with people that already think they know about stocks or investing and are completely out of tune about me being a supporter of “Graham and Doddsville” and of course of Buffett as a second stage of the same original background. You can’t easily break the chains of habit if you don’t agree immediately that every good investment is a Value Investment by definition!

It’s true if you, as a Grahamite, like to buy cheap stocks when are mispriced, and its true when, since times are changed, you buy a wonderful business at a reasonable, not cheap anymore  but fair price. Buffett is not so known as you think. And then there are many Buffetts in a timeframe of more than seven decades. So, which one? The “learning machine” changed a lot because he’s smart and always learning, and times have been changing a lot during the span of his entire life-time. So everybody knows the same old stereotypes and stories, especially the professionals of money-managing. They know a little bit of everything, so this little-bit applies also to the greatest investor ever-existed.  It takes a while and a big effort to study exclusively a single investor, a single man, for many years everyday to be able to understand more than seven decades of investing and quotes, articles, videos, interviews, letters, shareholders meetings. It’s a lot. And it’s a very very narrow circle of competence. Say, one! Like owning and cherish just one stock for an entire life, and never sell! Does that make sense to you? If it doesn’t we are not on the same page. And I tell you what:  it’s just the beginning…. (to be continued) 

“Future is never clear”, WB 1979

Be like Buffett

Il futuro non e’ mai chiaro. Se aspettate che lo sia, siete già in ritardo per comprare azioni. Quando Wall Street naviga attraverso l’incertezza del momento è proprio quello il momento giusto per i migliori affari, per i migliori acquisti.

“The future is never clear; you pay a very high price in the stock market for a cheery consensus. Uncertainty actually is the friend of the buyer of long-term values”. (WB, 1979) 

L’Incertezza è amica dell’investitore a lungo termine, l’unico degno di questo titolo. “Volatility is your friend”. L’esatto contrario di quello che dicono in molti. Coloro che cercano “stabilità” in un prezzo di una azione, cioè di un business, non dovrebbero possedere azioni. Se non sono inclini a comprare e ad amare i business quando sono “mis-priced”, spiegatemi come pretendono di fare soldi investendo.

E’ molto semplice, è come dice Warren. E’ come una iniezione, o prende subito o niente. Possiamo stare qui ore, a scrivere, a fare diagrammi, raccontarci i cali del 1929, del 1974, e poi i prezzi bassi di Wall street del 1979, il 2008. Niente, non vi convincerete. Restate a casa con le Vostre paure. Ed in questo periodo fisicamente sono daccordo ma metaforicamente, no.

Nel 1979 investitori cosiddetti professionali, con Wall Street in calo significativo e prezzi delle azioni in picchiata (dopo 5 anni di rally) stavano alla finestra. Pension fund managers avevano un misero 9percento! dei loro fondi a disposizione in azioni quell’anno. Attendevano “risposte dal mercato” piu’ che dalla loro ragione. E quando si interroga qualcos’altro prima della razionalità, è il momento che si prende un treno in massa da Milano al resto d’Italia…

Ma torniamo al 1979. Buffett era sconcertato, stupefatto, a dir poco!  Buffett nel 1979 comprava costantemente mentre gli altri aspettavano che il quadro “fosse chiaro”.

1979: il dollaro era debole rispetto a marco e yen. Crisi energetica, persino nelle case, shortage. Fondamentalisti in Iran, Reds in Nicaragua, Opec, un debole Jimmy Carter a rappresentare una economia di un paese in declino rispetto ai dati economici dell’America di oggi.

E’ il momento di impiegare la liquidità adesso, scegliendo azioni di business con “sostanza” economica chiara e solida. Ma prima che l’incertezza da virus si sciolga. Non chiamatemi dopo la paura, “avidi” di acquisti. Siate coraggiosi, anzi razionali, quando tutti hanno paura. Saluti dagli States! Scrivetemi :   marco@blikebuffett.com       

Tough times don’t last, tough people do!

Stay Safe

Graham part 4

Be like Buffett

Buffett since many years admitted he did change some of the “rules” he learned from Graham, and, most of all, he added new principles and concepts to investing, or better, to finding super-wonderful businesses. But you can’t  really understand easily Buffett or Munger without having in mind the lessons of Graham before. Without studying and comparing their wonderful thoughts about life and the investment world and economics with the basic principles of “value” of a business created by Ben Graham. Many of this principles underpin still today the investment frame of Munger when he says: “Every good investment is a value investment by definition”! And what about Jack Bogle, and all the many times he describes the difference among “speculation” and true “investing”.

Back to our hero, Warren, never forgot to “retain” the proper “temperamental set” from Graham ever since he was his student at 19 y.o. until now, 71 years later. That is “to buy value” at a good or reasonable price; put a margin of safety; and be able to detach yourself from the crowd and from the daily market gyrations. Amen.

Ben Graham , first part

Be like Buffett

I was born september 15th 1976, 6 days later Ben Graham died, age 82. Graham still is, as he was, modern and old-fashioned at the same time. He reminds me of an italian quote :”Torniamo al passato, sarà un progresso”! that is “Let’s go back to the past, it will be a progress”!  Especially when the markets are down I find comforting , and above all useful! to read Graham principles again. And I remind myself to read again for the onethousandfivehundred-or so time, chapter 8 and 20 of the “Intelligent Investor”. Before Graham buying stocks was something without a true philosophy. The principles of a good investment were undiscovered. Graham taught us how this game should be played to be profitable. Then, came Buffett as his best student of all, And with him we find today this game expanded and refined. But the initial spark is a Graham’s spark that showed the path to many.,

So much better than I can write, let’s take delight of Graham’s approach through the words of Warren Buffett in 1976 :

“In an area where much look foolish within weeks or months after publications, Ben’s principles have remained sound-their value often enhanced and better understood in the wake of financial storms that demolished flimsier intellectual structures”

This was from the “Financial Analysts Journal” of October 1976, but for me it could have been written without changing a word today, 43 years later, almost 44. My entire Life-time.

(to be continued)

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Last posts

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…) 

The best is yet to come

Be like Buffett

Your first approach to “Value” is critical. So it’s important to have and education about this as a young individual. Or, even if you don’t start very young, your first understanding of investing is equally important. I find totally unuseful to talk for hours with people that already think they know about stocks or investing and are completely out of tune about me being a supporter of “Graham and Doddsville” and of course of Buffett as a second stage of the same original background. You can’t easily break the chains of habit if you don’t agree immediately that every good investment is a Value Investment by definition!

It’s true if you, as a Grahamite, like to buy cheap stocks when are mispriced, and its true when, since times are changed, you buy a wonderful business at a reasonable, not cheap anymore  but fair price. Buffett is not so known as you think. And then there are many Buffetts in a timeframe of more than seven decades. So, which one? The “learning machine” changed a lot because he’s smart and always learning, and times have been changing a lot during the span of his entire life-time. So everybody knows the same old stereotypes and stories, especially the professionals of money-managing. They know a little bit of everything, so this little-bit applies also to the greatest investor ever-existed.  It takes a while and a big effort to study exclusively a single investor, a single man, for many years everyday to be able to understand more than seven decades of investing and quotes, articles, videos, interviews, letters, shareholders meetings. It’s a lot. And it’s a very very narrow circle of competence. Say, one! Like owning and cherish just one stock for an entire life, and never sell! Does that make sense to you? If it doesn’t we are not on the same page. And I tell you what:  it’s just the beginning…. (to be continued) 

“Future is never clear”, WB 1979

Be like Buffett

Il futuro non e’ mai chiaro. Se aspettate che lo sia, siete già in ritardo per comprare azioni. Quando Wall Street naviga attraverso l’incertezza del momento è proprio quello il momento giusto per i migliori affari, per i migliori acquisti.

“The future is never clear; you pay a very high price in the stock market for a cheery consensus. Uncertainty actually is the friend of the buyer of long-term values”. (WB, 1979) 

L’Incertezza è amica dell’investitore a lungo termine, l’unico degno di questo titolo. “Volatility is your friend”. L’esatto contrario di quello che dicono in molti. Coloro che cercano “stabilità” in un prezzo di una azione, cioè di un business, non dovrebbero possedere azioni. Se non sono inclini a comprare e ad amare i business quando sono “mis-priced”, spiegatemi come pretendono di fare soldi investendo.

E’ molto semplice, è come dice Warren. E’ come una iniezione, o prende subito o niente. Possiamo stare qui ore, a scrivere, a fare diagrammi, raccontarci i cali del 1929, del 1974, e poi i prezzi bassi di Wall street del 1979, il 2008. Niente, non vi convincerete. Restate a casa con le Vostre paure. Ed in questo periodo fisicamente sono daccordo ma metaforicamente, no.

Nel 1979 investitori cosiddetti professionali, con Wall Street in calo significativo e prezzi delle azioni in picchiata (dopo 5 anni di rally) stavano alla finestra. Pension fund managers avevano un misero 9percento! dei loro fondi a disposizione in azioni quell’anno. Attendevano “risposte dal mercato” piu’ che dalla loro ragione. E quando si interroga qualcos’altro prima della razionalità, è il momento che si prende un treno in massa da Milano al resto d’Italia…

Ma torniamo al 1979. Buffett era sconcertato, stupefatto, a dir poco!  Buffett nel 1979 comprava costantemente mentre gli altri aspettavano che il quadro “fosse chiaro”.

1979: il dollaro era debole rispetto a marco e yen. Crisi energetica, persino nelle case, shortage. Fondamentalisti in Iran, Reds in Nicaragua, Opec, un debole Jimmy Carter a rappresentare una economia di un paese in declino rispetto ai dati economici dell’America di oggi.

E’ il momento di impiegare la liquidità adesso, scegliendo azioni di business con “sostanza” economica chiara e solida. Ma prima che l’incertezza da virus si sciolga. Non chiamatemi dopo la paura, “avidi” di acquisti. Siate coraggiosi, anzi razionali, quando tutti hanno paura. Saluti dagli States! Scrivetemi :   marco@blikebuffett.com       

Tough times don’t last, tough people do!

Stay Safe

Graham part 4

Be like Buffett

Buffett since many years admitted he did change some of the “rules” he learned from Graham, and, most of all, he added new principles and concepts to investing, or better, to finding super-wonderful businesses. But you can’t  really understand easily Buffett or Munger without having in mind the lessons of Graham before. Without studying and comparing their wonderful thoughts about life and the investment world and economics with the basic principles of “value” of a business created by Ben Graham. Many of this principles underpin still today the investment frame of Munger when he says: “Every good investment is a value investment by definition”! And what about Jack Bogle, and all the many times he describes the difference among “speculation” and true “investing”.

Back to our hero, Warren, never forgot to “retain” the proper “temperamental set” from Graham ever since he was his student at 19 y.o. until now, 71 years later. That is “to buy value” at a good or reasonable price; put a margin of safety; and be able to detach yourself from the crowd and from the daily market gyrations. Amen.

Ben Graham , first part

Be like Buffett

I was born september 15th 1976, 6 days later Ben Graham died, age 82. Graham still is, as he was, modern and old-fashioned at the same time. He reminds me of an italian quote :”Torniamo al passato, sarà un progresso”! that is “Let’s go back to the past, it will be a progress”!  Especially when the markets are down I find comforting , and above all useful! to read Graham principles again. And I remind myself to read again for the onethousandfivehundred-or so time, chapter 8 and 20 of the “Intelligent Investor”. Before Graham buying stocks was something without a true philosophy. The principles of a good investment were undiscovered. Graham taught us how this game should be played to be profitable. Then, came Buffett as his best student of all, And with him we find today this game expanded and refined. But the initial spark is a Graham’s spark that showed the path to many.,

So much better than I can write, let’s take delight of Graham’s approach through the words of Warren Buffett in 1976 :

“In an area where much look foolish within weeks or months after publications, Ben’s principles have remained sound-their value often enhanced and better understood in the wake of financial storms that demolished flimsier intellectual structures”

This was from the “Financial Analysts Journal” of October 1976, but for me it could have been written without changing a word today, 43 years later, almost 44. My entire Life-time.

(to be continued)