Stock Market

Warren Buffet Turns 90

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One of the most famous persons on the planet just celebrated a birthday last week, and you might not have noticed it.

Warren Buffet turned 90.

Everyone of course, knows Buffet.

When I first started my investing journey over a decade ago, I certainly looked up to Mr Buffet – as I am sure a whole generation of investors did.

His simple, folksy maxims are probably more quoted than any other investor.

“Be greedy when others are fearful and fearful when others are greedy”.

“It’s only when the tide goes out that we find out who’s been swimming naked”.

And my personal favourite, “price is what you pay, value is what you get”.

But what made him so special?

How about the 31.6% annual return during his partnership days from 1957 to 1968.

Or the period he owned Berkshire Hathaway, from 1965 to current, and the stock has achieved a 20% annual return.

If you had invested $10,000 from day 1 (in 1965), this is how much you would have today… yes, almost $350 million.

Honestly, there won’t be another investor like Buffet.

Because he was born at the right time in the right environment to capture his unique skill-set and perspective on investing.

Although recently, I have noticed an increasing segment of the media and investing public, criticizing Buffet’s approach (and value investing in general) as outdated – chiefly because of his reluctance to chase the popular digital and tech growth stocks which have 2x, 3x, 5x and more in the last few years.

However, there were those who criticized him during the tech bubble of 2000, just as there were those who thought he was past it during 2008-09.

But you can’t measure performance over a few years, you need to measure it over a lifetime.

I think this highlights the beauty of his approach.

Very few of his investing decisions are revolutionary. He looks at businesses with steady cash flows that generate high returns, low risk and invests for the long term.

Another unique insight of his investing style (especially during his partnership years), is that he tries to match the index during bull markets, but tries to out-perform during bear markets.

By being a few percentage points clear during down years, compounded over time is a significant reason why he has vastly out-performed the index.

Just goes to show that all the great investors focus on risk first, growth second.

So Happy Belated Birthday Mr Buffet, here’s to writing about you again next year!


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P.S. If you want to find out more about Warren Buffet – I highly recommend you read The Snowball: Warren Buffett and the Business of Life by Alice Schroeder

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