March 29, 2006

Notes from Columbia Business School trip’s meeting with Warren buffett

I always make it a point to read the transcripts/ notes of these meetings. A lot of it is the same stuff, but I am always able to find a few gems of wisdom in buffett’s replies to the Q&A. Some of the interesting comments are below

Link : http://investoblog.blogspot.com/


Question 3: What do you read?Everything. Annual reports, 10-K’s, 10-Q’s, biographies, history. When he’s in airplanes, he’ll read the instructions on the seat backs. Two books he recommended specifically are
Poor Charlie’s Almanack and Personal History, Kate Graham’s bio. He rarely ever reads fiction, feels like it would be taking up time he could be reading about business. He reads five newspapers a day, and plays bridge twelve hours a week.


Question 4: Please share your thoughts on your position in Remy International and the auto parts industry in general.“Boy, I thought airlines were tough." They took the position in Remy three years ago.When your big customers are teetering on the brink of bankruptcy, it’s tough to get price increases. You can’t survive as a high-cost producer in this industry. You can’t pass through costs like you could in the old times.


Question 5: What investment lessons have you learned?He keeps making mistakes. Predicting the future is hard, and it will keep being hard. As long as his mistakes are in his analysis, that’s okay. When you buy a stock, you need to be able to get out a yellow legal pad and write down, in one page why it is cheap. For example, “I am buying the Coca Cola company for $14b for x, y, and z reasons and I think it is worth far, far more than that.”



He finds the game fun and always has. If you like it, keep practicing. It’s hugely important to buy stocks on your own. By doing that, you learn in a way that you can’t from reading books. Temperament and emotions are hugely important, and you need to experience that first-hand.

3 comments:

raj said...

what do you make of the game comment? Interesting comment

Rohit said...

raj
buffett is referring to investing as the game he enjoys.
also according to him, just reading is not enough, till one buys stocks on his own
i have experienced the same thing. A bad pick teaches you a lot when you also lose money on it (and ofcourse dont blame others for it)

Prem Sagar said...

HI Rohit,
Great work on the blog. I read every article on it. I see that you too work in IT and read a lot. But honestly speaking where do you squeeze time? (my problem is that I collected more material and books than the time available to read them.. and my backlog is growing exponentially :-) )
Why dont you write something on how you started investing and the like?
I ventured into stocks because of greed..(lucky that I started in Jan 05.. I still havent had any mistakes to learn from .. lucky or not..time should tell)
Great work..