WARREN BUFFET
THE ORACLE OF OMAHA
In India with his Investing Tips
Warren Buffet was in India this month. Along with Bill (and Melinda) Gates.
One successful Investor and another successful Inventor. Both were asking India’s heart to open up – itself, with generosity. And why not? They have shown the way themselves. Earning alone is not Life. The fulfillment of Life lies in how you spend your earning. These two are great teachers in that art.
Bill Gates has just lost his place at the top of the Billionaires List – but does it matter? It is time to compile the list of the most generous hearts. And, You will find him there - at the TOP OF THE LIST. Along with his wife Melinda Gates. And, along with Warren Buffet, the Oracle of Omaha.
They were practically saying, look, we have done it. We have opened up. The world needs it. You need it. Therefore, why don’t you. Life is here!
Kudos to both for what they are attempting - telling the big bellies – to become big hearts.
While writing this post - I took a long look at the Bill Gates Foundation's web site. The efforts that Gates (and Warren together) are making - are FANTASTIC. Extraordinarily Humane. Long time ago - I had read that Gates wanted to put a computer in every home with a Microsoft Operating system. Now, I think, he is putting himself in every home in many countries, through his extraordinary efforts to ensure the health of all children (and adults) on this earth. They have discovered their Life's Mission.
While writing this post - I took a long look at the Bill Gates Foundation's web site. The efforts that Gates (and Warren together) are making - are FANTASTIC. Extraordinarily Humane. Long time ago - I had read that Gates wanted to put a computer in every home with a Microsoft Operating system. Now, I think, he is putting himself in every home in many countries, through his extraordinary efforts to ensure the health of all children (and adults) on this earth. They have discovered their Life's Mission.
I only wish, they had told India’s Politicians a thing or two about being Honest, about being truly entrepreneurial and about encouraging Indian entrepreneurs. I don’t think they will listen. Yet, it would have been a thing to do.
Did Warren Buffet, the world’s Best Investor, the oracle of Omaha, conquer India’s hearts? Or, did he not? We have no way, as yet, of knowing. Despite, what Azim Premji did, in Gates’ style recently in India.We will wait for the results.
We are interested in Buffet’s philanthropy – but we, the lower mortals are also more interested in his success and his mantras for success.
Warren Buffet is a highly predictable Investor – which is his greatest Forte. For that matter, the forte of any good investor. A lot has been written already about his investing style – and his SUCCESS STYLE.
Following his style, any genuine Investor can be an Oracle. There is nothing magical about predicting a company’s success in the future – and your success if you invest in it. But, what is magical about it , is the rate of success that any individual investor can achieve with this simple formula.
Warren Buffet’s simple system works magically. Over time, that is. You need Patience all the way. Then, it works magic.
He made India’s fund managers become Insurance Policy holders, before opening up himself to them all.
What does he think of – what Indian Fund Managers (and Investors) want to know?
BUYING GOLD
Warren Buffett doesn't think of gold as an investment at all. He feels that gold, oil and art are investments that don't produce any income or product. So, investors who buy these are counting on them becoming more attractive to other people in the future. "That's a whole different game" compared to investing, says Mr. Buffett.
Buffett prefers to invest in productive assets like company stocks and farm land which produces crops, rather than on gold, oil or art.
BUYING RIGHT STOCKS
Buffett is a value Investor and relies on the principles of finding stocks which are cheap compared to their worth.
Buffett does not look at sectors for investment. That is not his style.
He looks at Individual companies. He looks for companies whose business he understands, and where he sees income and growth potential for the next five, 10 or 20 years.
The companies should generate good returns over the long term.
There could be irrational bubbles like the housing bubble in US in 2007. But, investors should not lose faith when that happened as long as they believed in their particular investment.
He says – he had more ideas when he started investing and less of capital. Now, it was reverse. He had more capital and fewer ideas.
He says - he doesn't have to be a part of all successful companies – he looks for only a few good investing ideas.
HIS ROLE MODELS
Buffet cites his Father as his early Role model. Later, his Guru Benjamin Graham, the god father of value investing, was the greatest influence on him.
He thinks very warmly of the Intelligent Investor written by Graham, which he read at age 19. He feels, this book, published in 1949 first, does not require any improvement.
ON INDIA
Indians are still on Gold and Land mostly – for providing assets for their future generations.
It will take some time before Investors in India got comfortable investing in stocks.
WHEN TO SELL A STOCK?
Selling a Stock, is a hard decision compared to buying a stock.
For this, and for other sound reasons, Buffett holds on to stocks for decades.
He says - "I don't feel like I have to grow rich in the next day or week."
Buffett feels - tracking stock prices daily is being "just foolish" for investors.
If they had bought a farm or an apartment, do they expect it to appreciate the next day? No. Why treat stocks differently?
About trading - He feels, frequent traders would "make more money if they don't trade as much."
Buffett says - he would sell a stock only if some better investment opportunity came about, or if something changed at the company, such as its management, which he didn't approve of.
BEING AN INTELLIGENT INVESTOR
Buffet feels - A good investor needs reasonable intelligence and a passion for investing.
You must have the ability to look at the facts of an investment and evaluate them without getting influenced by what other people think. "You can't get excited because other people are excited," says Mr. Buffett.
He says - we are susceptible to believe that something that has happened in recent past will continue to go on. So, every now and then, there's a craze to buy something even at very high, irrational prices. "Then all of a sudden, the music stops, and the investment comes crashing down.”
The key is to detach your self from such a craze.
MARGIN OF SAFETY
Mr. Buffett stresses the need for keeping some cash as margin of safety. He himself usually keeps a few billion dollars as "margin of safety" at his company. It helps in tiding over any potential crises. That margin also allows to buy businesses which may become attractive during a downturn, he said.
He says, individuals must hold as much cash in their portfolio as would keep them comfortable during tough times.
"Some people might do something very foolish if they didn't have cash around," says Mr. Buffett. Usually people when under pressure, may sell even good stocks after losing a lot of value in them.
FIGHTING INFLATION
"Inflation is a very cruel tax," said Mr. Buffett, because it lowers the worth of your paper money.
He said one of the best ways to keep the value of your money growing is to invest in good businesses and companies which keep growing. That helps investors "maintain purchasing power no matter what happens to the currency," said Mr. Buffett.
He is not in favour of long-term bonds of Government, because both inflation and printing of new currency lowers the value of these investments.
As the only better way to beat inflation, he says - "Maximize your talent."
ON BLACK MONEY
Buffett feels - it is not a bad idea to use money unaccounted for to help society. He said that a child who gets a vaccine that can save his or her life, won’t question the source of the money that paid for the vaccine.
JOBS VS PHILANTHROPY
When asked what he thought of Mexican billionaire Carlos Slim’s view that it’s more important to create jobs than be Santa Claus. Mr. Buffett called it a “false contrast” saying you can do both at the same time. Santa Claus “employs 12 elves,” he said.
He added that when he or Mr. Gates give shares of their companies to charity, it doesn’t cost anybody a job.
ON INDIA’S AUTO SECTOR
On any likely interests in the auto sector in India, Buffett says he is a phone call away for "families that control an auto company and wish to see company grow over time."
Well. Warren Buffet is on call. Is India listening?
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