The BH growth story will saturate after a decade from now?
Buffett sets stage for massive buyback, dividends after decade
NEW YORK (March 1): Warren Buffett, whose Berkshire Hathaway is sitting on about US$63 billion in cash, told shareholders to expect a dividend or stock buybacks, as long as they’re prepared to hold the shares for a decade or more.
“Eventually -- probably between 10 and 20 years from now - - Berkshire’s earnings and capital resources will reach a level that will not allow management to intelligently reinvest all of the company’s earnings,” Buffett wrote in his annual letter to shareholders on Saturday.
“Our directors will need to determine whether the best method to distribute the excess earnings is through dividends, share repurchases or both.”
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http://www.theedgemarkets.com/sg/article...ter-decade
I think this statement is loaded and amazing:
" In the past 50 years, we have only once realized an investment loss that at the time of sale cost us 2% of our net worth. Twice, we experienced 1% losses. All three of these losses occurred in the 1974-1975 period, when we sold stocks that were very cheap in order to buy others we believed to be even cheaper."
(02-03-2015, 07:56 AM)specuvestor Wrote: [ -> ]I think this statement is loaded and amazing:
" In the past 50 years, we have only once realized an investment loss that at the time of sale cost us 2% of our net worth. Twice, we experienced 1% losses. All three of these losses occurred in the 1974-1975 period, when we sold stocks that were very cheap in order to buy others we believed to be even cheaper."
Rotating for better stocks, isn't as "speculative" as we normally thought.
The statement is also consistent with Mr. Buffett quote, "Never lose money".
(02-03-2015, 09:27 AM)CityFarmer Wrote: [ -> ] (02-03-2015, 07:56 AM)specuvestor Wrote: [ -> ]I think this statement is loaded and amazing:
" In the past 50 years, we have only once realized an investment loss that at the time of sale cost us 2% of our net worth. Twice, we experienced 1% losses. All three of these losses occurred in the 1974-1975 period, when we sold stocks that were very cheap in order to buy others we believed to be even cheaper."
Rotating for better stocks, isn't as "speculative" as we normally thought.
The statement is also consistent with Mr. Buffett quote, "Never lose money".
"Never lose money", but ok to "lose to make even more".
Its not "speculative", if its an informed decision. With limited capital, all the more important to rotate from time to time, when opportunities arise.
But, for the many, its mentally tormenting to sell those stocks already cheap to buy cheaper ones.
Easier said than done, but (to some extent) its a truism that is necessary to succeed in the markets.
(02-03-2015, 10:07 AM)vesfreq Wrote: [ -> ] (02-03-2015, 09:27 AM)CityFarmer Wrote: [ -> ] (02-03-2015, 07:56 AM)specuvestor Wrote: [ -> ]I think this statement is loaded and amazing:
" In the past 50 years, we have only once realized an investment loss that at the time of sale cost us 2% of our net worth. Twice, we experienced 1% losses. All three of these losses occurred in the 1974-1975 period, when we sold stocks that were very cheap in order to buy others we believed to be even cheaper."
Rotating for better stocks, isn't as "speculative" as we normally thought.
The statement is also consistent with Mr. Buffett quote, "Never lose money".
"Never lose money", but ok to "lose to make even more".
Its not "speculative", if its an informed decision. With limited capital, all the more important to rotate from time to time, when opportunities arise.
But, for the many, its mentally tormenting to sell those stocks already cheap to buy cheaper ones. Easier said than done, but (to some extent) its a truism that is necessary to succeed in the markets.
Well said. "informed decision" is the key. It took me a while, before I have accepted the concept. It happened after I read Peter Lynch book.
Any you a fellow Peter Lynch fan?
IMHO it is loaded because
1) He is talking about REALISED loss, unrealised is another matter
2) It is talking about 50 years track which all 3 >1% losses happened in just 2 years of bear market
3) With concentrated bets it is very hard to have realised loss of such small magnitude
4) Opportunity cost is very important. He has repeated said not closing Berkshire Textile was one of his biggest mistakes. He is cash rich now so rotation is not an issue currently. Sold Tesco due to fundamental deterioration which is what value investors should also focus on instead of staying in love.
(02-03-2015, 10:23 AM)CityFarmer Wrote: [ -> ] (02-03-2015, 10:07 AM)vesfreq Wrote: [ -> ] (02-03-2015, 09:27 AM)CityFarmer Wrote: [ -> ] (02-03-2015, 07:56 AM)specuvestor Wrote: [ -> ]I think this statement is loaded and amazing:
" In the past 50 years, we have only once realized an investment loss that at the time of sale cost us 2% of our net worth. Twice, we experienced 1% losses. All three of these losses occurred in the 1974-1975 period, when we sold stocks that were very cheap in order to buy others we believed to be even cheaper."
Rotating for better stocks, isn't as "speculative" as we normally thought.
The statement is also consistent with Mr. Buffett quote, "Never lose money".
"Never lose money", but ok to "lose to make even more".
Its not "speculative", if its an informed decision. With limited capital, all the more important to rotate from time to time, when opportunities arise.
But, for the many, its mentally tormenting to sell those stocks already cheap to buy cheaper ones. Easier said than done, but (to some extent) its a truism that is necessary to succeed in the markets.
Well said. "informed decision" is the key. It took me a while, before I have accepted the concept. It happened after I read Peter Lynch book.
Any you a fellow Peter Lynch fan?
I was never a fan, but now you mentioned.... I may be one soon.
Making that call to switch is truly never easy. Separating emotions from decision making and letting the big head make the final call....
One thing that I respect about Buffet is that his purchases are big and reflective his conviction to his stocks.