(C)
focus on the importance of investment in recent years until it is well known, such as the \ contrary. However, Buffett Early in the 20th century, the late 50's focused investment strategy adopted in 1957, Buffett's largest holding of New Jersey Comnonwealth Trust, accounting for more than ten percent of all the assets of the Fund. Conservative estimate of the intrinsic value of Buffett's company of about 125 US dollars per share, because it does not pay cash dividends, the stock is only 50 dollars , 5 times earnings. Buffett spent a year or so to the average cost of $ 51 per share, the bank bought 12% of the shares, became the second largest shareholder. The end of 1958, Buffett a 20% discount to current market of about $ 80 per share, throw all the company shares and then buying the stock Sanborn Map Company, a partnership fund assets accounted for 35% of the total. Buffett sold
Incidentally reason, in addition to Sanborn is a more attractive target, he said: USD 80 per share, investors can still buy CommonWealth perfectly in a few years exit. But for us, the price of 80 dollars to 135 dollars bought the intrinsic value of the security enjoyed by the marginal, and the price of 50 dollars to 125 US dollars acquisition enjoyed by the intrinsic value of the margin of safety is completely different. (February 11, 1959)
Buffett at January 18, 1965 letter to partners, the majority of fund managers can not outperform the random stock selection due to the following five factors: (1) collective decision-making. This may be biased, but if genuine participation by all relevant parties investment decision, it almost certainly is an outstanding investment management only on the mirror, Stronghold; ( 2) to maintain compliance with investment policies and other large investors institutions similar to the tendency of the portfolio; (3) institutional constraints. In the current system, to maintain \ (5) inert.
Buffett (4) adopted the \ In the same year in November, he reminded the partners to add a new note of the Fund and the basic principles of investing:
we do not like most investment managers as diversification of investments, as opposed to an investment if the following two conditions, we may be 40% of fund assets invested in this project: (1) based on the facts and reasoning process of the correct probability is very high; (2) changes in investment due to various factors intrinsic value of the probability of very low volatility.
1966 年 1 10 May, Buffett's letter to the partnership in the provision of a discussion focused on secondary investments. Because this problem is very important, since the majority of investors (including me) , but still a problem, here, full reference:
I certainly hope there are 50 different investment opportunities, investment opportunities in each expected rate of return (investment results may be the product of probability) at least 15 percentage points than the Dow. If 50 is not relevant to investment opportunities in each other (so-called is an investment opportunity related to the generation of investment opportunities and other relevant), I am very happy each investment opportunities in the average allocation of funds, waiting for a partnership fund with confidence the final investment performance than the Dow 15 points.
but that is not the case.
We work very hard to find one of the few attractive investment object, I said there are attractive investment is its annual investment rate of return than the Dow Jones index of at least 10 percentage points, which is only Some investments, some expected rate of return volatility may be quite large. We often think of a question is: \ depends on these two projects the gap between the expected rate of return much also depends on the number one investment project has the probability of a poor rate of return much. Two expected rate of return of investment may be the same,
air force 1 shoes, but the yield of an investment estimated probability of 0.05 percentage points lower than the Dow Jones index of 15, the other an investment rate of return is estimated that only 0.01 lower than the probability of the Dow 15 percentage points. The former is expected to yield a wide focus on reducing the volatility of investment possibilities.
actual investment operations is not as talked about above is so accurate, but our task is based on established facts, the appropriate range of experience-based reasoning, and ultimately calculate the expected rate of return of various investments. In this process, we will inevitably be the dual factors of intellectual and emotional impact of this is the investment management business content. Whether you are not aware themselves of the above calculation, the long-term investment performance will be objectively evaluate your computing power.
I am sure that any one fund (whether it is 1,000 dollars or 100 million US dollars), will achieve good results even if only as a secondary objective, it will not consider the 100 stocks. Add 100 stocks not only reduces the overall performance of the portfolio, and can not effectively reduce the risk of fluctuations in portfolio performance.
some investors invest in careful analysis of each object still insist on the investment strategy of excessive fragmentation, I call this strategy as \ Noah's Ark to the driver rather than investment. Noah did follow a biological principle, but investors do is to deviate from the mathematical principles.
course, other people do not mind the over-diversification does not prove that the method we focus on is the right investment, we must refine their investment objective approach to investing.
the best investments and the expected rate of return is the expected value of the error can be the best combination of tolerance, the range of alternative investments more widely, the actual rate of return and the error between the expected rate of return will be smaller,
air force 1, of course, the expected return rate will be lower.
focused investment strategy is likely to result in a year or a few years, substantially lower than the performance of diversified investment performance ( when I talk about \ may in future years to bring good returns. I believe that this investment strategy will enhance our long-term rate of return.
facts have proven this point, a partnership fund with respect to the advantages of the Dow Jones index from 2.4 percent in 1958 increased to 33.0 percent in 1965. Compared with other investment funds, you will find our relative volatility of the Dow Jones index is very high. Perhaps by way of diversification can reduce volatility, but it can also reduce the long-term partnership funds rate of return. Looking back, I think that if the holdings before the more centralized, the better.
above is my basic principle of the newly added some consideration.
In addition, I reiterate again ,
air force one low, this type of investment is somewhat anti-traditional (anti-tradition itself does not mean right or wrong - just means you should to think this problem), you may hold have a different point of view - If so, then the Buffett Partnership Fund is not suitable for you. We only in very rare circumstances will the partnership 40% of fund assets into an investment, once found such opportunities, we will not hesitate to do so. In the past nine years, investment funds accounted for 25% of the partnership investments of more than about 5 or 6, all of which greatly exceeded the number of investment is expected to be able to Dow Jones index, but there is also the possibility of major permanent loss of principal is very small (this does not mean short-term stock market quotes, short-term stock market quotes anything will happen. It also shows that focused on investment strategies will increase the volatility of the risk). When making investment choices, I will remove those that may cause the overall performance of the portfolio by 10 percentage points lower than the Dow Jones index of more than investment.
present, we hold two investment of more than 25% of the net assets of the Fund's investment projects - one of which is \ It should be noted that the performance of partnership funds in 1965 from the five major investment, the five investment income in 1965 (which had a certain number of past contributions to the proceeds) from 800,0000 to 3,500,000 US dollars ranging, while the partnership funds in 1965, the smallest 5 \
is interesting discussion on a variety of investment management can avoid the calculation of the dispersion of the best investments, all posts are proposed to \ Knowledgeable by Billy Rose's words, over-diversification is essentially like \ seemed to understand the literal meaning, but still not safe to be Warren Buffett on the \ Some say it more clearly, I really like \ I also like to focus on an inspection tour of the historical investment performance of the investment house, such as Munger, etc. (70 years of the 20th century), but found that they appeared in more than 30% performance loss. Only Warren Buffett (please excuse my ignorance) of the amplitude is the smallest, at least he did not appear in the New Year more than 5% performance loss (it should say that these years no loss).
control bad \
However, I discuss three types of investment in the above mentioned methods can hedge the market risk of Warren Buffett, and can use Workouts and Controls will focus on investment and market fluctuations, \ If we can do that, I believe that volatility will reduce the performance (which may also be wishful thinking, Who Controls Workouts in particular better to do?).
In addition,
air force one mid, linked to Buffett in October 9, 1967 letter to partners about the relationship between qualitative and quantitative discussion, we can find some clues:
on the stock and the investment environment The evaluation included quantitative and qualitative factors, the extreme view , focus on qualitative factors analysts will emphasize \ stressed that \ Both methods result is usually good. Of course, in general, each analyst will be considered to some extent, these two factors, and not just look at some aspects that completely ignores the other hand, was attributed to the type of value depends on which side he factor.
Interestingly, although I think I belong to the quantitative analysis group, but my most successful years, investment decisions are fully taken into account qualitative factors, such a sense of the qualitative factors, which I call \ However, as insight is often as rare,
nike force one, this opportunity is very rare, generally considered the quantitative factors do not need insight - the data itself will Henhen Qiao your head. In short, the big money usually comes from the right investment opportunities in qualitative decision-making, but more certainty the profits from those correct quantitative decision-making.
so-called \
(d)
1969 people by the end of Warren Buffett to a partnership announced his retirement.
well-known reason is that Buffett felt in an increasingly speculative market, short-sighted and could not find any significant investment opportunities. Buffett will not compromise on the allocation of speculative frenzy, he made it clear in January 1967, I will not turn to that, \ can not join them, and then beat them. \ Now that does not beat them, may wish to exit it.
But what I read these early letters Warren Buffett, a more realistic feel human reason.
that is personal motivation, and Buffett October 9, 1967 admitted:
in the partnership was initially started, I'm sure the tone of investment: \ results . \ I was still relatively young, no money, and more radical. Even without these external factors, I think that personal changes in the environment will also reduce the operating speed of the car as necessary. In my life seen a lot of similar things , especially in business, in not necessary to do so even after the high-speed operation to keep out of inertia (or speed). Bertrand Russell had two in a war that lived in his manor of Lithuania girl's story: While Russel's very rich food on the table, but the evening after dark, they still escape from the next door neighbor stole some vegetables hidden in the house. Sir Russel the two girls, explained that this behavior in Lithuania during World War I was necessary, but in the English countryside is inappropriate. Although the two girls nodded in agreement, but continued acts of theft. Finally, Russel jazz can only be satisfied with the idea - although their behavior is very strange neighbors, but in practice, and no difference in the behavior of the old Rockfeller.
simple self-analysis told me that if you do not go all out, I would be hard to achieve the investment objective of the original, and now go all out to become more and more meaningless. I prefer to allow some non-economic behavior of the investment objectives, which means that the behavior of partnership funds may exceed the area of investment or partnership funds to maximize the economic benefits are not fully in accordance with the investment. A typical example is the income to invest in a nice (but not outstanding) and very like my \ At this point,
nike air force, although the sale of this investment will bring more profits, but I prefer to continue to hold and to slightly adjust their financial strategies through continuous improvement of its operating performance.
other words, I am more willing to invest in those reasonable, simple, safe, profitable and enjoyable investment projects, this does not make us more conservative than before, and will not reduce the downside risks to investment Instead, it will reduce the possibility of investment in upstream.
believe that a partner was heard at a loss, the \
In fact, I read Luojie Luo Lowenstein book \ It should be said, I read these letters in the process, Buffett's precocious tempting to sigh, to know that he wound up a partner in 1969 when the Fund is only 40 years old, ah, two years younger than I am now miles. This is really talented ah.
in 1969 to a partner at the end of the last, full of passion and longing, Buffett said:
Some partners have asked me: \ I know I am 60 years old, my individual goal must vary with the age of 20.
investment accounted for my adult life for 18 years almost all of the time and effort, so, unless I now own their own detached from the investment, otherwise I think I can in the coming years to pursue new goals.
I could not help laughing, I laugh What do you think? 40 years later, Buffett has far more than 60 years old, he re-read these words, they think?
(e)
translation of the last flu Xiezhang Qin, accounting firm in her busy work, but scrupulously clean and dedication to such a kind of text, so that we can enjoy the wisdom of Warren Buffett and emotion.
(this is \
That {namely}, `` ` {adore} you
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