Warren Buffett – Maverick of the Market
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Code :LDS0018B
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Region : USA |
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The young genius Buffett was born on August 30, 1930. His father Howard was a stockbroker turned Congressman. Young Buffett displayed an amazing aptitude towards money and business. When he was six years old, Buffett purchased 6 packs of Coca Cola from his grandfather’s grocery store for 25 cents and resold them for a five cent profit. When other children were playing games Buffett was making money. When he was 11 years old he purchased 3 shares of City service at $38 per share... Buffett’s idea of doing business Ten years after its founding Buffet partnership assets had grown to $44 million. He closed the partnership but retained his investment in Berkshire Hathaway. In 1965, after acquiring 49% of the common stock he named himself the director of Berkshire Hathaway Inc. He appointed Ken Chance as the president of the company and gave him full autonomy over the organization. In 1970 he named himself as the chairman of the board of Berkshire Hathaway. Buffett’s prowess in capital allocation began to reflect in numbers... Buffett’s belief in Fundamental Analysis Buffett strongly believed in the philosophy of value investing. Value investors identified and bought shares which appear to be under priced based on Fundamental analysis7. Fundamental analysis included company’s financial reports and non financial information like estimates of growth, demand for competing products, industry comparisons, analysis of effects of new regulation etc. The essence of value investing was buying stocks at less than their intrinsic value... Buffett’s disregard for Technical Analysis Buffett disregarded Technical analysis11 as an investment tool. Buffett’s argument was that since technical analysis did not consider financial data such as cash flow, dividends, projection of future dividends it was of no use for an investor. Primarily Technical analysis is conducted by studying charts of price variation. Many different methods and tools are used in Technical analysis but they all relied on the assumption that price patterns and trends existed in markets and they could be identified and exploited... |
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Emulating Buffett Buffett believed in value investing, that was buying a stock that was trading at a lesser value than what it should have been and then holding on to it so that there was value appreciation. But estimating the intrinsic value and identifying stock that was valued at less than what it should have been was an extremely difficult part of value investing.Even the smartest investor in the market found it difficult to emulate Buffett...
