tag:blogger.com,1999:blog-37612625963735851912024-02-19T02:39:27.446-08:00THE RATIONAL INVESTORStocks are simple. All you do is buy shares in a great business for less than the business is intrinsically worth, with management of the highest integrity and ability. Then you own those shares forever.
I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful.Dance With Mehttp://www.blogger.com/profile/11452760400913968147noreply@blogger.comBlogger347125tag:blogger.com,1999:blog-3761262596373585191.post-69617726628579447332011-08-26T08:52:00.001-07:002011-08-26T08:52:55.381-07:00Steven Jobs, Beffets advise are the same to career - find out what you have passion to do你的工作将会占据你人生大部分时间,因此获得成就感的惟一途径就是做你自己认为是伟大的工作,而成就一番伟业的惟一途径就是热爱你的事业。如果你还没有找到让自己热爱的事业,你要继续寻找,不要随遇而安。跟随自己的心,总有一天你会找到的。而且,工作和你之间的关系与其他任何一种伟大的关系一样,随着岁月流逝,它会变得越来越顺畅。所以,继续寻找,直到找到为止,不要半途而废。
<br />Dance With Mehttp://www.blogger.com/profile/11452760400913968147noreply@blogger.com7tag:blogger.com,1999:blog-3761262596373585191.post-60291808297010588822011-08-23T22:17:00.001-07:002011-08-23T22:17:37.321-07:00一页纸说清战略http://www.ebusinessreview.cn/articledetail-95276.html
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<br />我的合伙人马茨·莱德豪森(Mats Lederhausen)曾是麦当劳(McDonald's)的全球战略主管。他向我介绍了“战略树”(Strategy Tree)这一概念。该概念和大多数有用的东西一样,表面看来相当简单。但它能让你认识到你到底想取得什么。之所以用“树”作类比,是因为战略树中的各个问题之间存在相互关联。从你为什么做某事的根本目的开始,然后将它与你的目标以及衡量进展的方式联系起来。用图来表示,战略树更像是一连串相邻的圆圈,如下图所示:
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<br />归根到底,战略树就是要针对企业提出“为什么、什么、谁、怎么”等问题,并将这些问题在一页纸上排列好,使其成为管理层或董事会手中有用的协调工具。这个概念算不上新颖,属于一种常识,但却没有多少企业进行应用。上述几个问题有多种排列方式,不过我通常用以下四个问题来了解一家投资组合公司的总体状况:
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<br />1. 你为什么存在(你的目的是什么)?你的企业为什么有权利存在,要实现什么目的?例如,我们的投资组合公司中有一家名为MiniLuxe的美甲连锁店,它的目的是要做美甲领域的“星巴克”,为这种使用最广但最不规范的美容项目提供一贯质量的服务和操作方法。美国共有6.5万家美甲沙龙,但大多是夫妻经营的小店,没有正规的连锁店,服务质量不稳定。
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<br />2. 你的价值主张是什么?这个问题是针对顾客的。MiniLuxe将为顾客提供健康、开心的美甲服务——顾客将在这里获得最卫生、最优质、最便利、最合算的美甲体验。在写下你的价值主张时,要考虑自己企业明显区别于竞争对手的独特能力和资产。MiniLuxe采用医用压力蒸汽灭菌设备(用于对仪器进行消毒)。顾客可以透过玻璃“清洁实验室”看到器械消毒杀菌的全过程。这在美甲行业是一种独特的流程和资产。你拥有什么能够吸引顾客的独特之处呢?
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<br />3. 你要服务的对象是谁?也就是说,你的目标顾客是谁,越具体越好。MiniLuxe的每家门店都以方圆1英里内居住的人群为目标顾客,主要是20到55岁的女性,包括注重美容保养的年轻单身职业女性、想让自己振作起来的妈妈们、将去美甲沙龙看作定期社交活动和享受生活的富裕女性等。考虑前三类、最多前四类主要顾客群,着重关注那些能给企业持续带来最高价值的顾客。
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<br />4. 你怎么判断自己在取得成功?确定关键客户和财务指标。你每周应该做几次顾客拜访?提供哪些服务项目较为合适?什么是好的顾客幸福指数?MiniLuxe采用净推介值(Net Promoter Score)来衡量顾客向其他人推介服务的可能性。他们还每周衡量财务指标,其中最重要的指标包括销售同比增长、新门店实现正现金流所用的时间、门店每平方英尺面积的销售额等。我以前提到过,了解两三个主要运营指标以及两三个主要财务指标,就会使企业管理容易许多。先是对每个指标的合适目标做出最佳预测,然后开始进行衡量,必要时对目标做出调整。
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<br />战略树是决策树的一种变体,只不过它不像决策树那样迫使人们沿着某个路径做出选择,而是简单勾勒出实现战略目的和发展的路径。战略树对讨论真正重要的问题非常有效,如果能够以协作的方式展开讨论,则可以协调最重要的优先事项。你在一页纸上就可以了解全局及各部分之间的关联。从阐述目的和目标的“为什么”和“什么”开始,到企业要瞄准的客户“谁”,再到“怎么”去衡量进展,通过这一过程,你可以更快更好地进行战略协调——并有望转变为更好的结果。这虽是常识,但却少有企业这样做。
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<br /> Dance With Mehttp://www.blogger.com/profile/11452760400913968147noreply@blogger.com2tag:blogger.com,1999:blog-3761262596373585191.post-84451558275538581802011-08-23T22:09:00.001-07:002011-08-23T22:09:51.474-07:00向马云学习创业2009年9月10日,教师节,马云45岁生日,阿里巴巴也迎来了10周岁的生日。杭州黄龙体育场,在现场三万人的尖叫中,马云一副“朋克魔女”的另类装扮上场,唱起了英文歌,成了当晚最大的亮点。马云从来不缺少娱乐精神,马云的这一装扮也成了第二天许多媒体的娱乐头条,赚取了无数眼球,由此可见,他真是一个媒体运作的高手。
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<br />不过,当他白衣白裤地站到台中央的时候,在现场三万多人的尖叫中,其“商业领袖”的魅力还是显露无遗。在四十分钟的演讲中,他和三万多人分享了他的创业经历和感悟,他坦言,为了这四十分钟的演讲,他准备了整整十年。十年时间,马云完成了从创业者到商业领袖的蜕变,成了无数创业者心中的偶像,他的话语被许多创业者反复传颂。
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<br />我们能从马云身上学到什么呢?最主要的还是价值观、梦想和坚持的力量。相比而言,马云那非常出色的口才倒是次要的。遗憾的是,很多人学马云,以为创业就是去“忽悠投资”,去“整合资源”,结果“画虎不成反类犬”。让我们认真分析一下阿里巴巴走过的历程,以及马云身上的一些性格特质,看看马云是如何成功的,我们应该如何学习马云?
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<br />创业是理想和现实的结合
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<br />创业者通常都很有激情,经常大谈自己的理想。确实,激情和理想主义这是创业者的一个必要条件,如果没有这两者,他们通常不会去创业。但很多创业者以为,激情就是创业的全部,这就错了,激情和理想主义这只是创业的第一步,接下来的事情就是一步一步把理想落实为行动,将刹那的激情变为持久的专注。没有行动的激情是廉价的,也是不能持久的。
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<br />创业者是理想主义者和现实主义者的结合。没有理想主义,创业者不可能走太远;如果没有现实主义,这个企业更不可能活下来。正如复兴集团的董事长郭广昌所言,马云是一个“很能忽悠”的人,但马云之所以是马云,不在于他说了什么“大话”,而在于他说的那些“大话”,后来他都一一实现了。马云在十年的时间里,先后创办了阿里巴巴、淘宝、支付宝这样的能够改变人们生活方式的企业,而且创造了“网商”这个新的商业群体。这就是许多创业者和马云的区别,很多创业者都说了,但马云不仅说了,还做了,而且做成了。
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<br />成功是一个小概率事件。即便阿里巴巴顺利非常发展,但马云还是非常清醒地意识到,其成功在很大程度上归功于“运气”。他说:“我们不是最聪明的,也不是最勤奋的,但我们走到了今天,很大程度上归功运气。”这既是自谦之言,也是一个事实。他还说,创业如同攀岩,一开始有100个人从山底出发,一路上有95个人是悄无声息地消失了,还有4个人会在登顶之前惨叫一声,掉下深谷,只有1个人能够成功登顶。我们听到了1个人在大谈成功经验,却没人注意到那跌入深谷的99个人。
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<br />在成功创业者花团锦簇的热闹背后,很少有人指出一些残酷的真相:企业能够经营十年以上的不到2%,大学生创业成功的,更是不到1%。不夸张地说,一个刚毕业的大学生创业成功的概率,和一个人从五楼跳下来没摔死的概率差不多,是一个标准的小概率事件。很多人拿比尔•盖茨、迈克尔•戴尔、史蒂夫•乔布斯的案例来鼓舞大学生创业,殊不知,拿一个小概率去鼓励大家去冒险,无异于鼓励了一种投机心理,所以我一直对大学生创业持保留态度。理想主义固然值得尊敬,但现实主义往往能让一个人活得更长久。
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<br />创业者还容易陷入的一个误区是喜欢追随创业偶像,这也是过于理想化的一种表现。很多创业者经常挂在嘴边的故事就是马云、江南春、陈天桥的故事,好像只要他们向他们学习,将来也能成功一样。实际情况却远没有那么简单,我们被形形色色媒体炮制出来的创业故事误导了。一方面,成功者的故事都是经过精心包装过的,真实的情况不是这个样子的,我们能看到的只是冰山一角。另一方面,即便他们的故事是真的,偶像的成功也是无法模仿的,因为成功是“天时地利人和”的产物,而这些都是无法复制的。俗话说,小富靠勤,大富靠命,尽人事,听天命,创业也需要这种豁达的精神,没有什么事情是可以保证的。
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<br />对于有些创业者来说,如果确实需要一个偶像指引自己前行,这个可以理解,他们的一些为人处事之道也值得学习。只是千万要记住,可以学习他们,但不要模仿他们。创业本质上是一个发现自我和实现自我的过程,而每一个人的自我都是无法模仿的。记住一句话,要学习,不要模仿!
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<br />价值观比商业模式更重要
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<br />这是一个创业精神泛滥的年代。每天都会有人告诉你,他有一个很好的商业模式,他要创业了。每天打开电视,都会看到和创业有关的节目,每个人都在说他的梦想。你去任何一所高校,随便问问一个大学生,他想不想创业,十有八九的答案是“想”。遗憾的是,这又是一个价值观和职业精神缺乏的年代。我们很少能看到在这些时髦的话语背后,哪个人创业是为了改变别人的生活;也很少有人说,创业是和他的价值观有什么关系。所以我们看到的是很多小老板和大富豪,很少看到让人尊敬的企业家。
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<br />还有很多MBA出身的职业经理人喜欢大谈商业模式和战略,仿佛这就是创业的全部。我分析过数以百计的商业模式,每一个商业模式说起来都是头头是道,但真正做起来,却发现根本就不是那么回事。道理很简单,你在商业模式中考虑过的那些问题,往往不是现实中的真实问题,你最早的想法在现实面前,肯定会变化的,正所谓有心栽花花不开,无心插柳柳成荫,计划中要做的事情有时候做不成,反而是当初无意中做的事情做成了。
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<br />价值观比商业模式更持久。以星巴克为例,在现任CEO霍华德•舒尔茨接手这家公司之前,星巴克不过是位于西雅图的一家提供咖啡豆的公司。两个创始人对咖啡充满了狂热,对赚钱并不在行,他们的愿望只是提供美国最好的咖啡豆,也正是这一理念吸引了舒尔茨的加盟。众所周知的是,星巴克的商业模式后来发生了很多变化,从卖咖啡豆到卖咖啡,再到现在卖音乐,但他们的价值观也一直没有大的改变,那就是让更多的人体验咖啡的快乐。正是这种朴素的价值观使星巴克在二十年时间里成长为一个享誉全球的知名品牌。
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<br />不是说商业模式和战略不重要,这些商学院教过的学问在分析一个成熟市场的成熟业务时也许确实管用,但往往在开展新的业务时并不奏效。这是因为,那些创新型企业通常面对的是一个尚未存在的市场,相关的数据通常不存在或者快速变化的,支持那些创业者作出决定的往往是基于创业者的价值观。企业的经营环境不断改变,商业模式也会发生相应的变化,但一个企业的价值观变化并不大。从这个意义上来说,一个企业的价值观比这个企业的商业模式的生命力更加持久,力量也更强大。
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<br />马云的成功在很大程度上可以归功于价值观的成功。在马云创立阿里巴巴之前,就意识到了电子商务对未来商业形态的影响,并立下了“让天下没有难做的生意”的使命。在阿里巴巴获得软银的孙正义的2000万美元的投资之前,他曾经带着团队在硅谷拜访了40多家风险投资商,结果全部吃了闭门羹,不少人给他的商业模式的评价要么是“这个方案太愚蠢了”,要么是“你想清楚了再来找我”。在风险投资商看来,这些从来没有人实践成功的想法确实有点疯狂了,还好马云遇到了同样有点“疯狂”的孙正义,谈了6分钟,给了他2000万美元。孙正义后来说,正是马云身上体现出来的那种价值观打动了他。
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<br />稍稍受过一点商学院教育的人都是开口闭口战略,却并不了解这个词的真正含义。管理大师亨利•明茨伯格说过,战略本质上是一种手艺,不是创业者躲在办公室里制定出来的,而是在不断实践中慢慢调整形成的,战略是企业的远景和现实磨合形成的结果。所以刚开始创业就大谈所谓战略,结果往往是想当然,因为缺乏对现实环境的灵活反应,结果导致所谓的战略路线图变成了一种束缚,反而导致了企业的失败。马云说过,“来公司不超过半年的人,不要谈什么战略”,因为不了解公司现状的所谓战略,一定是夸夸其谈。
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<br />战略和管理一样,本质上都是一种实践,有过创业经验的人都说,“先开枪,后调整,少谈理论,做起来再说”。一旦公司的大方向确定之后,就不要停留在战略这个层面了,关键在于要把这些商业模式执行到位。企业成功的关键并不在于商业模式或者战略,这两样东西固然重要,其实还是比较好把握的,难就难在把每一个细节都做到位,这往往也是成功者和失败者的区别。所以说,创业者不要忽视了执行力和企业管理,这决定企业能走多远。
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<br />创业团队和整合资源的误区
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<br />“1头狮子加上9只齐心协力的狼,往往胜于10头想法各异的狮子”。曾经有一个商学院毕业的10个MBA,背景都非常优秀,个个堪称“豪华男”,一起合伙做事情,结果不到一年,就各奔东西了。原因是他们把太多精力放在讨论商业模式和制定战略上了,结果达不成一致意见,还彼此不服气,反而是没人去执行了,最后只好散伙。
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<br />与之形成鲜明对照的,是阿里巴巴的创业团队。在阿里巴巴最初创业的“18罗汉”中,平心而论,除了马云之外,其余17个人都不能算是出类拔萃的人物。这恰恰是阿里巴巴成功的一个条件,阿里巴巴只需要一个领军人物,其余的人负责执行到位就可以了。好的创业团队要善于搭配,团队核心只需要一个,其他人则尽力负责执行,这样成功的概率更大。
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<br />在创业早期,“经济适用男”是比较适合的创业合作伙伴,他们往往是执行力很强的人,而不是躲在办公室里谈理念,或者是彼此抱怨,却没有人行动。冯仑说,“在企业中最核心的部分,往往就是那些经历了创业,并通过学习不断取得提高的‘经济适用男’”。至于高学历的“豪华男”,新东方教育集团有限公司董事长兼总裁俞敏洪则建议,“可以在一些专业性的领域加以重用,但在吸引时必须加强人才的融合,就像器官移植中解决排斥问题一样。”
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<br />再说整合资源。北京大学教授、著名经济学家周其仁说,“小企业就是很少用他人钱财的企业,大企业就是大量用他人钱财的企业。”小企业是因为很少用他人钱财所以很小,还是因为很小所以才很少能用他人的钱财?这很像一个鸡生蛋还是蛋生鸡的循环,但绝大部分小企业是因为很少用他人钱财所以才很小,企业小是结果。所以创业者要会整合资源,只有能够有效地整合社会资源的企业,才能把小企业做成大企业。
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<br />但创业者在整合资源时往往会陷入另一个误区。一些高学历的创业者往往觉得自己起点高、想法好、认识的人多,因此搞资源整合是一条捷径,甚至是无本万利的事情,所以要搞出一副高举高打的模样出来。但是他们不知道的是,你想整合人家的资源,人家也想整合你的资源,大家都在玩资源交换的游戏。别人是看你的实力和诚意的,所以一个创业者在用别人的钱之前,就要先把自己的所有身家性命都搭进去,别人才会信任你,把他们的钱财投给你。
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<br />其次,不要高估了所谓“人脉资源”在整合资源中的作用。有些人喜欢说,我认识“谁谁谁”,问题在于,那个“谁谁谁”认识你么?即便认识,又怎么样?!人脉只是一个敲门砖,他给你一个见面的机会,但要真正合作,还是要你能提供他想要的价值。商业人脉说白了都是利益的交换关系,你对别人有用,别人就能成为你的朋友,你对别人没用,是朋友也没用!多认识一些人自然好,更重要的事情是把自己的事情做好,这才是商业的根本!
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<br />任何一个创业者都希望能够得到风险投资的帮助,更希望自己的公司在未来的某一天上市成功。所以,很多人一说到创业,第一个念头就是写商业计划书,第二个念头是找风险投资,第三个念头就是公司要上市。不过,事实的真相是,新创企业中能够拿到风险投资的不到百分之一,能够上市的更不到千分之一,而上市后还能基业长青的则不到万分之一。
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<br />所以,做企业还是要踏踏实实的把事情做好。将小概率事件当作创业的目标,往往结果会失望。正是像马云和霍华德.舒尔次这样的人,他们当初的目标并不是要把企业做得多么大,而是要去改变人的生活。他们用价值观去驱动自己的企业,结果把企业做成功了。Dance With Mehttp://www.blogger.com/profile/11452760400913968147noreply@blogger.com1tag:blogger.com,1999:blog-3761262596373585191.post-8580207451892357522011-08-23T20:42:00.000-07:002011-08-23T21:25:53.117-07:00马云:差学生与创新者我理解的企业创新,就是创造新的价值。创新不是因为你要打败对手而创新,不是为了挣更多的钱,为更大的名,而是为了社会,为了客户,为了明天——创新不是为对手竞争,而是跟明天竞争。真正的创新一定是基于使命感。
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<br />小时候我有很大的梦想,想进清华、北大,也有很大的使命,想为国家做贡献。但因为缺乏创新手段,一次次没有考上。我在想为什么没考进清华?
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<br />小学我念了七年,中学念了三年,高考考了三次,我从来没有被认为是好学生,但也没变成一个坏学生,小学我是最好的小学生之一。我们去参加重点中学考试全军覆没,第二年再度全军覆没,后来实在没有中学要我们,就把小学改成杭州天水中学。在杭州历史上,只有这一所小学被改为中学,改了一年后实在不行,后来撤了。我也不知道问题出在我们这里,还是出在教学的方法上。
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<br />马云说,信息时代是认为“我比别人聪明”,数据时代是别人比我聪明。
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<br />我分析为什么自己考试考不好,老师讲的东西我永远记不住,优秀的学生是老师讲的他记得很清楚,然后一遍一遍几乎是原版的拷贝。我特别喜欢这两个字:启迪。我认为知识是可以灌输的,但是人类的智慧是启迪的,是唤醒的。我们进入21世纪,在知识爆炸的时候,重要的不是获取更多的知识。以前可能需要大量的记忆,现在通过电脑一查就可以知道,中国人的文化中说勤劳勇敢,勤劳是很重要,机器是永远不会偷懒的,人和机器最大的差别,我们懂得创新。
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<br />我觉得未来学校和教育最大的改革是发现、好奇、独特的思考,我们去唤起人的智慧,而不是教更多的知识。王安石变法是哪年?我到今天还记得是1069年,我觉得这简直就是个悲哀。1069年跟我有什么关系?知道是宋朝就好了,可是高考就考那些东西。我以前数学还不错,后来高考数学考了一分,我学数学时学sin、cos、tan、cot,他们说很重要!到今天为止,我一次都没用到过。我认为最好的教学方法,就是去启迪不同人、不同性格、不同背景、不同文化、不同思考模式的人,去唤醒人的智慧,发现孩子的强项。这可能是我们未来最大的挑战,也是我们今天在教育上面需要找出来的巨大创新。
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<br />而我理解的企业创新,就是创造新的价值。创新不是因为你要打败对手而创新,不是为了挣更多的钱,为更大的名,而是为了社会,为了客户,为了明天——创新不是为对手竞争,而是跟明天竞争。真正的创新一定是基于使命感。
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<br />我们一定要问自己一个问题,我到底为了什么?其实有时候很多论坛邀请我去演讲,一个礼拜我拒绝参加的论坛不下十场,但有时候还得去,为什么?要想清楚自己有什么,要什么,要放弃什么。其实我们一无所有,没有一个有钱的爸,也没有一个有权的舅舅,只是一个平凡的人。在这个世界我们是没有理由成功的,没有理由做到现在。我能做到现在,感谢这个时代,感谢很多的朋友,感恩客户,感恩互联网,感恩所有信任我的朋友,他们的信任让我走到了今天。
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<br />十多年来,我做阿里巴巴从来没改过使命:让天下没有难做的生意,让小企业成长起来,成为明天的Google,明天的Apple,明天的腾讯,明天的阿里巴巴。微博上说,阿里巴巴的股票是投资负增长,我们挣钱确实没游戏公司多,但我们挣得踏实,我没骗过投资者。
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<br />我第一天就讲,我拿的钱是为十年以后中国的电子商务做的。我们拿到的钱影响了今天的一个行业,我不敢说我们有多大的贡献,但中国电子商务发展到今天,阿里人做出的贡献很大。我们自己可能没挣很多钱,但是我们创建了电子商务,创建了诚信体系和物流体系。也许今天没有回报,但是我相信三五年以后一定有回报。明白自己有什么,明白自己要什么,明白自己放弃什么。做企业有钱的人千万不要想有权,当政府有权的人千万不要想自己有钱,这两个东西就像火药和火一样,碰在一起,你死都不知道怎么死的。只有明白自己要什么,走得才会踏实、稳健,而基于使命感的创新也才是持久的。
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<br />首先,我觉得创新一定是在企业外部。在大企业内部找创新其实很难很难,我相信乔布斯没有离开苹果那么多年,苹果不会有今天,是社会培养了他。
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<br />前一段时间,美国一个学者问我,“你认为学校应该怎么培养企业家?”我认为社会是最好的学校,学校给了我们框架,是社会培育了我们、锻炼了我们。公司两三千人的时候,是我最困难的时候,管理混乱,我不知道怎么办。那时,我发现了一个问题:国家是怎么管理的?和尚是怎么管理的?我专门去研究了一下。
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<br />我发现建国这么多年,国家无论经济好坏都很稳定。而我们公司内部换一个经理,所有人都要辞职。仔细去研究发现,组织部很厉害,中央党校灌输党的价值体系、组织部管人,效果很好。由此,阿里建立了自己的阿里学院,建立集团的组织体系。中央副省级以上由中央组织部集中管理,后来我们改成总监以上是集团直接管理,越管越靠谱。我们今天换一个总监,换一个副总裁很方便,这样的机制才能可持续发展,所以创新是在公司以外。
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<br />当他的同事安于每月拿着固定工资,每天三点一线的稳定生活时,马云已经开始为自己的理想和一颗不安分的心而“穷折腾”了。
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<br />在 2004年CCTV中国经济年度人物颁奖典礼上,一句“一个男人的才华跟他的智商是成反比的”引得全场一片欢呼;说这句话的人,不仅仅引起了当场的欢呼,更是引领了我国电子商务的发展,他就是马云。从三尺讲台上的一名老师到第一个登上美国《福布斯》杂志方面的中国企业家,也许马云在当初放下教鞭的时候,自己都没有想到。酷爱武侠小说的马云,最喜欢的武侠英雄是《笑傲江湖》中的风清扬,“我觉得他的武功是出手无招,这是我一直向往的一种境界。”事实也是这样,从涉足互联网,到创办阿里巴巴,再到对C2C、搜索引擎的拓展,单独看马云走过的路,几乎每一次出招都令人费解。直到整个过程即将结束,人们才会渐渐看清他究竟想干什么。
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<br />20世纪末21世纪初,在全球皆为互联网而疯狂的时代浪潮之中,在以雅虎、eBay、亚马逊三大巨头为主流的互联网格局下,“另类”的马云却高喊“只抓小龙虾”的口号,高举“做中小企业救赎者”的大旗,开拓一个前无古人、后有来者的新领域——中小企业B2B。从此,在雅虎、eBay、亚马逊之后,世界互联网版图上又多出了一个崭新的”第四种模式”——阿里巴巴模式。在企业家马云之前,习惯了全盘西化、大规模进口欧美经济模式的中国企业和企业家,从来没有像今天这样在世界新经济的大舞台上如此扬眉吐气过。这也应和了马云对商业模式的态度,除投资者以外,他对公司的商业模式都不肯透露半字,而等你意识到一切都豁然开朗时,游戏已经结束了,马云说,这就是商业。
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<br />兼职创业
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<br />1988年,大学毕业的马云顺利进入杭州电子科技大学做英语老师。就是这段经历给他以后创业打下了最坚实的基础——团队。作为一名老师,在那个年代,就告诫学生不要死读书。许多学生都把马云当成偶像。后来跟马云创业的18个元老,就有几个是他的学生。比如,周宝宝,从学生时代就开始崇拜马云,后来“脑子一热”就跟着马云一起创业了,一直到今天。另一位阿里巴巴的重要创始人彭蕾,也是马云在教书期间的同事。所以可以这么说,马云在杭州电子科技大学做老师的那几年,奠定了今后阿里巴巴创业路上最核心、最忠诚的团队。正是这些人一直追随马云,即使经历过几次失败,但最终还是支撑起了阿里巴巴的商业帝国。
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<br />1995年,30岁的马云凭借出色的工作表现被评为杭州十大杰出青年教师。但如果马云继续按部就班,一心一意地从事他的英语教学工作,那么也许今天的他会是一名非常出色的英语老师,甚至可以超过以《疯狂英语》大红大紫的李阳。
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<br />因为是英语老师,所以就有许多人找到马云帮忙翻译一些英文资料。请马云的人很多,有时候一天就可以接到多单生意。随着在业内的名气越来越大,渐渐地,马云感觉自己一个人根本做不过来,而同时他又发现一个现象:自己身边的同事,尤其是一些退休的老教师,在家里闲着没事可干。马云对自己的老师(有些也是老同事)很有感情,他们退休了之后,整日赋闲在家,不仅心理上感到莫大的寂寞和失落,而且经济上也很拮据,马云那时每月的工资还不到100元,相信他们的情况也好不到哪里去。这时他突然有了一个想法:开一家翻译社将退休的老师供养起来,既帮了同事的忙,也算是为社会尽了点绵薄之力。这样就有了马云的第一次创业——海博翻译社。
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<br />有一点我们不得不承认,步入而立之年的马云已经开始显现“敢为天下先”的气魄和勇气,正如他后来在中国互联网行业翻云覆雨一样。当他的同事安于每月拿着固定工资,每天三点一线的稳定生活时,马云已经开始为自己的理想和一颗不安分的心而“穷折腾”了。
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<br />虽然在创办之初,困难重重,但马云通过身边的实例,认为一定会有这方面的需求,只要坚持就能成功。在他的带领下,翻译社慢慢实现了盈利,虽然这些对他以后的创业没有提供太多的资本和经验,但让他明白了一个道理:成功者必须具备两种品质:一是大胆执着的性格;二是对市场的敏锐嗅觉。
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<br />第一次触网
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<br />1995年,杭州市政府正在修杭州通过安徽阜阳的高速公路。此时,美国的一个投资者与杭州市政府谈判了一年,资金却一直没有到账。双方认为谈判中间翻译有问题,于是号称“杭州英语最好”的马云就在这样的背景下粉墨登场。在谈判中,美国代表告诉马云是美国董事会那边没有同意,无奈之下,杭州市政府只得派马云远赴美国。就是这次美国之行,让马云第一次接触到了互联网。在美国的西雅图,马云无意中到了一家网络公司。进去之后才发现,这家公司只有两间很小的办公室,五个人一起工作。第一次见到电脑的马云非常好奇,经过主人的允许,并在他们的指点下马云开始第一次使用互联网。他在网页上打出了“beer”,结果搜出来德国啤酒、美国啤酒和日本啤酒,却没有中国啤酒。然后他又敲出了“chinese”,结果却是“no date”。于是,马云就开始设想在中国建一个公司,专门做互联网。
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<br />兴奋的马云,当时就做了一个非常简陋的网页——海博翻译社的页面,上面有价钱和联系方式。令他意想不到的是,一天之内就收到了五个人的回信。其中三个是美国人,两个是日本人。此时的马云尽管不懂网络,甚至对于网络可以说是“文盲”,但是嗅觉灵敏的他有一种发自内心直觉:互联网将改变世界!他立即决定与西雅图的朋友合作。一个全球首创的B2B电子商务模式,就这样在马云心里有了最初的商业雏形。
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<br />带着兴奋回国的马云立刻找来亲戚朋友说出了自己的想法,虽然大部分人都不看好马云的“奇思妙想”,但是冷水并灭有泼灭马云的创业热情。1995年4月,马云创建了“海博网络”,就这样马云带着自己的梦想,走下了三尺讲台,开始了自己的网商旅程。可以说没有海博网络就没有后来的阿里巴巴;没有英语教师的身份,也很难有海博翻译社,海波网络。就连马云出色的演讲能力,“这两下子主要是当年教书的时候练出来得,现在上台从来不备讲稿,一开口都收不住。”很多人都认为教师和创业者格格不入,看来这句话用在马云身上并不合适。
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<br />编者按:2010年12月18日,云锋基金江苏论坛召开,基金发起人马云、虞锋、史玉柱、刘永好等商界大佬现场与数百名企业家交流如何做企业,反思总结自己做企业的经验和教训。马云说他不断问自己:为什么要办企业?凭什么能做企业?怎么能做好?做舒服的企业比做大做强更重要,善待员工带来的回报远超过想象。
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<br />马云说,不要抱怨没有机会,机会永远存在,每5年到10年就有伟大杰出的公司出来。“也不要抱怨竞争,竞争时候不要带着仇恨,带着仇恨一定失败。更不要抱怨经济形势,伟大的企业都是在经济不好的时候诞生的。”
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<br />以下是马云的闭幕式演讲:
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<br />在路上,越走越孤独,因为路上的行人越来越少,企业做得越大,时间越长,你其实越寂寞,难得我们这些人是同道之人,我们互相分享一些经验和看法。有一些企业家喜欢爬山,有一些企业家喜欢穿越沙漠,他们为了体验极端。每个人观点不一样,我每天在爬山,我每天在过沙漠,我要去旅游,我希望搞一个腐败一点、舒服一点的旅游,因为我太累了。所有办企业的人都要回忆起自己当初为什么办企业,就像人到一定程度结婚以后不断的要回忆一下初恋的感觉,爱的第一个男朋友是最好的,但是走着走着我们变了。我们要问自己这个问题:我们为什么办这个企业?凭什么我们可以办好这个企业,如何才能办好,什么时候办,谁来干?这些问题想清楚了,你走起来会踏实很多。
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<br />不断问自己为什么要办企业
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<br />我们为什么要办这个企业?有一些人说我为了挣钱,阿里巴巴走到今天为止,我自己觉得,不是第一天就设计好的,今天阿里巴巴的所有的管理团队包括我在内,比十年以前的我,能力上面好很多,但是我同样再走一遍一定走不到今天,即使就是把淘宝,阿里巴巴所有的网站关掉,同样的人再做一次也做不好,时机失去了。很多人说马云你们把好的机会都拿完了,我们没有机会,但是机会永远存在,每10年,每5年肯定有伟大杰出的公司出来,每一年都有新的希望出来,这是我们的行业,但是你要搞清楚你为什么办这个企业?
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<br />第一,凭什么你能?有人说我有这个资源,我有那个资源,我能办好,其实未必。有人跟我说娶一个女孩子,跟他讲,我什么都没有,我只是比别人更爱你,这是空话,做企业不是想做好就可以。要问为什么可以,为什么我能。
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<br />新浪一开始没有这些资源及阿里巴巴从来没有做过这些商业,淘宝网在做零售上面没有经验,但是为什么有经验,有资本的,有钱的,有资源的输给没有钱、没有资源、没有经验的,这个大家思考一下,我今天没有答案,我只是谈我的看法。
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<br /> 第二,如何去做?
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<br />前几年,我讲那个奥巴马说:Yes,We Can!是的,我可以。但是美国经济并没有做起来,他忘了回答,How We Can?我们到底怎么做起来,怎么做这个企业,如何做是最关键的。
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<br />很多人看到的是今天成功的史玉柱,今天成功的虞锋,今天成功的沈国军。但是我希望大家看到十年前的沈国军,倒下去的史玉柱,他们当时做了哪些决定和想法。今天的我们不值得大家学习,而前面十年走过艰难的过程,犯过错误,在这个过程中需要所有人反思和学习和思考。
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<br />我不觉得今天的阿里巴巴是今天做的。是十年以前的理想,十年的努力做到今天,我们今天不是做今天的企业,做企业要为十年以后做的,你对十年以后中国经济的判断,世界经济的判断,这个行业的判断,今天开始按照这个方向,不断的改变自己去适应它。
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<br />还有什么时候去做?在十年过程中,谁来做是非常之关键。一个好的项目,交给一个好的人做得非常好,一个好的项目交给一个错误的人做得悲痛,你还不知道为什么最后输了。这些问题希望大家思考。
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<br />做舒服的企业比做强做大更重要
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<br />很多人在问,我们企业怎么做强做大,怎么做得更有钱?我认为中国这个文化诞生非常大的企业很难。
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<br />企业为什么一定要做强?为什么要做大?我认为企业要做好做舒服了,做舒服的企业,做好的企业比什么都重要。什么是好的企业,好的企业就是客户满意,员工幸福,股东觉得很放心,这样的企业我觉得才是真正好的企业。其实我们觉得做大有大的难受。养公司跟养儿子没有什么区别,不是多生几个儿子就会发财,一个糟儿子把你两个好儿子所有的资产浪费得一塌糊涂,所以我希望大家不一定要做大。
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<br />小企业经常说,老板大了,很多人会帮你做的,大了以后你不用干了,我发现企业越大,我越累,孩子越大,担心越多。你既然在路上就不要后悔,选择了就去做,这是你在体验做企业的过程中,在路上一定有的经历。
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<br />我为什么喜欢和小企业在一起?因为在他们眼中看到希望,期待和梦想,而大企业我们看到的是KPI,看到的是竞争,看到IPO,看到上市,资本和股东,再大的企业回到当时的梦想,回到实实在在的你,回到当时你为什么为客户做,当时你的想法是什么。你选择了企业你就不要后悔,要不断的做好客户、员工和股东的工作。我想,做企业,做小有小的乐趣,我在日本走过一些小店,这个小店门口贴了一个牌子本店已经成立今天是147周年的纪念日,我很好奇的一看,两对老夫妻,一个女孩子说,这是我们做糕点生意的,147年以来我们只做糕点,从他讲的过程中看到无比的幸福。
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<br />另外一个故事。几年以前,星巴克的创始人,CEO霍华德·舒尔茨和我讲一个故事,真实的故事,我觉得我们很多人去思考这个问题,去看看这个故事,挺有意思。他说到伦敦去出差,走过伦敦的牛津大街,这里是寸金之地,这里有一个很小的门脸,卖奶酪,卖奶酪跟卖盐一样,很辛苦,不赚钱,看到一个老头穿的很干净卖奶酪,他走进去问一个问题,说这条街的房租这么贵,你赚的钱能够付得起这个房租吗?老头说,买10英镑的奶酪告诉你。他买了之后,他说,你说到底付不付得起房租?老头说,年轻人,你过来,把头伸出去看看,这条街上的大部分的房子是我们家的。我们家世世代代以卖奶酪为生,卖奶酪不知道干什么,把这个钱买一个店面,今天卖成这个样子。我今天就喜欢做奶酪,我儿子还在做奶酪,我们祖祖辈辈觉得这是一个幸福的行业。
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<br />企业做幸福了,你永远舒服,不要去跟人家比,谁大,谁强,做快乐,做幸福,做愉快,我觉得这样的才会真正的舒服,我一直认为,我们到这个世界来不是来做事业的,我们到这个世界赖是体验生活的,是体验做人的愉快。每个人就3万多天,在座的人和我们一样,每天过完之后,打一个叉,就越来越少好好过日子,不要老想做大做强,舒服就好。
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<br />善待员工,带来的回报远超过想象
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<br />我觉得管理一个企业最好的是通过文化,制度是去补充,弥补文化。一个优秀的国家和优秀的企业必须有文化来做。大家一直认为,美国的强盛是因为美国有很好的制度,但是大家想想,美国的强盛离不开他的基督教文化,他是有文化有宗教信仰,整个法制是基于完善和补充整个基督教体系。
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<br />假如你没有一个很强大的文化体系,东拼一些,西拼一些,拿一些国外的法律制度未必能解决我们的问题。我们不是政治家,我们当不了政治家,我们现在企业家讲着讲着就讲成政治,好像比国家主席还大。我们都是企业,我们可以通过企业的手段,可以通过我们自己的努力去完善这个国家,去完善人类的商业发展。我觉得今天我们没有办法,也做不了一个城市的文化,但是我们可以做好自己公司的文化。文化,无非就是什么是你的使命,为什么做?怎么做,价值观体系,以及KPI,还有考核,文化一定是考核出来的,文化不是贴在墙上,有一个企业说,我们文化做得很好,4本杂志,5个会办报,那个是宣传,没有用。我希望大家记住,最后影响你公司是否可持续发展,你员工是否幸福,客户是否满意,是因为你是否有优秀强大的文化,制度是来弥补发展这样的文化。
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<br /> 我又要讲一个我讲了很多年的故事,这个故事影响了我,影响了我们的企业。1989年以前,我第一次听到这个故事的时候,我回来问,我们如何能够做到这样?这个故事就是说,丰田是如何打败美国汽车的?大家有说战略重要,有说设计重要,但是有一个故事说明问题。说在美国芝加哥,有一天晚上,下了大雨,有一个司机开了一辆车,刮雨器坏了,这个时候雨中来一个老人,这个人跑到车上把这个刮雨器修好。问他是谁?他说我是丰田公司的汽车的工人,我看到我公司的产品受到伤害,我有责任把这个修好。制度上不会让你去看到坏车就修理,是文化,让他做到这一点,我希望大家,假如你拥有这样的员工的时候,你一定能够成功,而这样的员工是因为你有这样心态对待你的员工,照顾好你的员工,你才有这样的文化和这样的员工。
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<br />我也告诉大家,21世纪最贵的是人才,企业也一定一样。绝大多数的企业认为机器比人贵,很多人买机器的时候讨价还价。我们聘请员工的时候,我们没有想过给员工带来好的条件,你没有这样想的话在二十一世纪一定活不好。今天以人为本的时代,互联网时代,信息时代,数据时代,一定是人的创造力的时代。善待你的员工,投资在你的员工身上,他们给你带来的回报远远超过你的想象。什么是人才,人才可以培养出来。什么是养?就是给他失败的机会,给他成功的机会。你要看着,不能让他伤筋动骨,不能让他一辈子喘不过气来。
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<br />我感谢我自己的这个时代,感谢自己所受的训练和教育。有人说中国的体制,培养不出像史玉柱、马云这样的人,我恰好是中国造,中国体制出来的。你永远会找到一些借口,成功的人永远在找方向。去年有一个同事跟我说,我忙死了,事情太多,每天忙的晕头转向。好,给他再加两件工作。因为你不懂得优先级,你不懂得什么该做什么应该做,怎么授权于人,你不给他这样的训练,你不会成功的。要有一种好的方法去训练他们,培养他们,给他们机会。
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<br />也有人说,公司最大的快乐是什么?有一个企业的人跟我交流说,十年以前,我一年能够赚几十万,一年我能赚几千万,公司越大我越没有幸福感,我觉得我现在越来越幸福感,我的幸福感来自哪里?来自十年以前,我看到这个小伙子,小姑娘,他们进入我们公司,今天居然变成这么能干,这么能够面对现实,他们的成长才是我的幸福感来源,你会发现有了他们,阿里巴巴会更好,有了马云,阿里巴巴会走下坡路,因为我的年龄到了。
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<br /> 每年,我跟我的各部门领导者,都要问自己这个问题,你聘请了谁?你开除了谁?你提拔了谁,警告了谁?这四个事情你做没做?你没有做你一定不是好领导,你不懂得如何培训别人,公司里面只有各种各样的人,这才是丰富多彩的。企业就是一个生态链,企业就是一个野生动物园,我很高兴我们公司像野生动物园,各种各样人都有,在各种人当中你怎么去发现他们,用欣赏的眼光看待他们。你听见一个人,你问领导者,你下面人怎么样?他说,这个下面的人都是混蛋,不是我招的,我说他们是混蛋,我希望你把他们培养的不混蛋,第二年如果他们更混蛋,一定是你不对,你更混蛋。我们要问这个问题,你们为谁做了什么?
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<br />竞争的时候不要带仇恨,带仇恨一定失败
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<br />企业现在最多的是竞争,包括在我们这儿也有很多报怨。阿里巴巴、淘宝建了两个市场,很多人杀价,很多人天天杀价,我出5千万,他出4千万,这是最愚蠢的商战,我教一个傻子也会干,这不是企业家。比价算什么英雄?
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<br />竞争最高的境界是什么?竞争是一种乐趣,这是让对手很痛苦,你很快乐,如果你也痛苦,这是走错了,你痛苦他开心,你肯定走错了。竞争的乐趣,两个企业竞争,就像下棋一样,你输了,我们再来过,两个棋手不能打架,现在是很恨,你胜了,我弄死你,真正做企业是没有仇人的,心中无敌,无敌天下,你眼睛中全是敌人,外面全是敌人。什么是企业的生态作战,生态里面非洲的狮子吃羊不是因为恨羊,是因为我就是要吃羊,因为可以让我生存。你竞争的时候不要带仇恨,带仇恨一定失败。
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<br />不要抱怨经济形势
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<br />最后,我们很多人一定要听经济形势。什么CPI涨了,物价原料涨多少了,央行要加息了,我们的企业不要关心这些事情,永远不要关心总理关心的事情,经济形势好,你未必好,经济形势不好你未必不好,伟大的企业都是在经济形势不好的时候诞生出来。
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<br />不要埋怨形势,有的人在报怨形势,有人就在努力。我开始做互联网的时候,三个月以后就出现互联网的风暴,大家都觉得不好,有时候形势不好,对你更有机会。所以,不管你企业多大,改变自己,适应这个无论好和坏的近来形势。我记得金融风暴刚开始的时候,我参加中国企业家的会,在报纸上看到,北京公园里面有一野鸭被冻在湖上,大家救这个鸭,这是救不好的,为什么?那个公园里面,鸭都是野鸭,那个是家鸭,冬天到了,野鸭都飞了,你还在那里,是笨的。你必须学会飞。
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<br />我们做企业要永远保持乐观的精神。我想在路上的人一定是辛苦的,在路上的人没有必要你杀我杀,互相鼓励,互相分享,更加透明一点,更加开放一点,我们的企业会做得更好。
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<br />要有理想
<br />“……我今天早上还在说,到现在为止我还搞不清楚该怎么样在电脑上用U盘。但是这并不重要,重要的是你到底梦想想干嘛。”
<br />给自己一个承诺
<br />“有了一个理想以后,我觉得最重要是给自己一个承诺,承诺自己要把这件事做出来。……我觉得创业者最重要的是创造条件。如果机会都成熟的话,一定轮不到我们。……你坚信这事情能够起来的时候,给自己一个承诺说我准备干五年,我准备干十年,干二十年,把它干出来。”
<br />“……我发现今天我回过来想,我看见很多游学的年轻人是晚上想想千条路,早上起来走原路。……如果你不去采取行动,不给自己梦想一个实践的机会,你永远没有机会。”
<br />“……创业者在记住梦想、承诺、坚持,该做什么,不该做什么,做多久以外,我希望创业者给自己承诺,给员工承诺,给社会承诺,给股东承诺,永远让你的员工、让你的家人、让你的股东可以睡得着觉,绝对不能做任何偷税,不能做任何危害社会的事情。”
<br />坚持
<br />“……傻坚持要比不坚持要好很多。所以我觉得创业者给自己一个梦想,给自己一个承诺,给自己一份坚持,是极其关键的。”
<br />“……在原则面前,在你能不能坚持,在诱惑面前能不能坚持原则,在压力面前能不能坚持原则。最后想干什么,该干什么以后,再给自己说,我能干多久,我想干多久,这件事情该干多久就做多久。”
<br />“……今天很残酷,明天更残酷,但后天很美好,绝大部分人死在明天晚上,所以我们必须每天努力面对今天。”
<br />两个问题
<br />“……我想创业者一定要想清楚两个问题,第一,你想干什么,不是你父母让你干什么,不是你同事让你干什么,也不是因为别人在干什么,而是你自己到底想干什么。第二,你需要干什么,想清楚想干什么的时候,你要想清楚,我该干什么,而不是我能干什么。”
<br />执行
<br />“……大家说中国不具备做电子商务,中国没有诚信体系,没有银行支付体系,基础建设也非常差,凭什么你可以做电子商务,那你说我怎么办?等待机会?等待别人来,等待国家建好,等待竞争者进来。我觉得创业者如果没有诚信体系,我们就创造一个诚信体系,如果没有支付体系,我们建设支付体系,我们只有这个样子,才有机会。所以我想,九年经历告诉我,没有条件的时候,只要你有梦想,只要你有良好的团队坚定地执行,你是能够走到大洋的那一岸。”
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<br />Dance With Mehttp://www.blogger.com/profile/11452760400913968147noreply@blogger.com0tag:blogger.com,1999:blog-3761262596373585191.post-41073719857308096142011-08-23T20:10:00.000-07:002011-08-23T20:13:14.140-07:00比亞迪功利主義泛濫 4S店老板睡覺要吃安眠藥现在明白了,为什么benjiamin graham 看重P/B,目前比亚迪的股价正向每股资产值8.5元极具靠拢,只有买入PB 才是最安全的,PE完全可能瞬间变化无常,这也是教训吧。
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<br />比亞迪功利主義泛濫,其通過分網銷售達到網絡的快速擴張,但卻忽視了渠道的利益。一家比亞迪4S店負責人表示,每晚睡覺都要吃安眠藥,一個月銷售不到10輛車,每月都在賠錢。
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<br />據第一財經日報8月24日報導,汽車廠商和經銷商關系就像魚和水,誰也離不開誰。廠家重量經銷商重利。如果經營一直虧損,合作將難以繼續。渠道對汽車廠商說,就如同一個人的大動脈,構建得好,企業如魚得水,反之,產品通路受阻,企業發展受困。對比亞迪來說,成功的渠道策略曾助力企業高速發展,而在渠道管理上的功利主義也讓比亞迪自食苦果。正所謂成也渠道,敗也渠道。
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<br />隨著今年汽車消費市場增速持續走低,比亞迪的銷量下滑最為明顯。解鈴還需系鈴人,比亞迪汽車銷售公司原總經理夏治冰以辭職來對比亞迪渠道管理中忽視經銷商利益負責。
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<br />夏治冰的離開,讓比亞迪再次反思自己的發展模式:通過分網銷售模式來達到網絡的快速擴張,但是忽視了渠道的利益,最終形成了惡性循環。
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<br />渠道之困
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<br />“我現在每晚睡覺都要吃安眠藥,睡不著覺也不敢翻身,就怕老婆擔心。我們4S店在苦苦支撐,一個月銷售不到10輛車,每月都在賠錢。”一家比亞迪4S店的負責人張樺(化名)表示。
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<br />走進辦公室,他隨手打開電風扇,“市場不好,就只能節約開支了。去年我們一個月的經營費用超過60萬,今年每月基本上減半。少開空調是為了將每月的電費控制在1萬元以內。”
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<br />為了省錢,張樺甚至把自己上下班的代步工具換成了一款省油的小型車。
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<br />張樺的省錢策略還包括關掉上海其他三個區域的比亞迪直營店,他還計劃繼續關掉一家門店,“租出去還可以收租金,不關的話,每天開門都要賠錢。”。
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<br />這家擬關閉的店,去年每月的毛利達到20多萬元人民幣,今年則降至5萬左右。平攤上經營費用,不僅不賺錢,還賠本賺吆喝。
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<br />“今年,上海沒有一家比亞迪4S店賺錢,大家都在熬。即使是二線城市的比亞迪經銷商也不賺錢,比如南昌4縣5區,400萬左右人口,就有6家4S店。可能只有三四線城市網點比較少的經銷商才能賺到錢。”滬上一家比亞迪經銷店銷售經理李響(化名)告訴記者。
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<br />經銷商網點太多了。2008年比亞迪在上海有7家4S店,其中A1網4家, A2網3家。2009年的時候增加了5家4S店,其中A1網有7家,A2網有5家。2010年經銷店數量翻倍增加,其中A1網8家,A2網9家, A3、A4網5家。
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<br />不同的網銷售的是不同的車型。雖然廠家分網絡銷售,實際上經銷商還是可以銷售其他網絡的車型。為了方便消費者的舉動,卻因為市場需求的不同步,而出現了商家的價格戰。
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<br />比亞迪內部人士也坦陳,2009年和2010年廠家就是發展經銷商網絡和逼經銷商壓庫。2010年經銷商數量增加了一倍,銷量卻只有10%的增長,經銷商銷量和單車利潤也急劇下滑。
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<br />隨著市場形勢不好,比亞迪遭到了終端經銷商的集體抵制。從去年5月份河南經銷商退網開始,之后成都、北京、浙江、山東等地區的經銷商陸續出現“退網”。上述比亞迪內部人士告訴記者,2010年退網的經銷商超過300家,退網比例超過20%。
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<br />業內人士認為,當車市好的時候,比亞迪汽車的擴張契合市場走向,廠商和經銷商都可以賺到錢,但是市場不好的時候,比亞迪沒有及時改變自己的渠道以及市場策略,就很容易出現經銷商“反水”。
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<br />渠道擴張
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<br />不過,在兩年前,比亞迪汽車和經銷商都充滿斗志。兩年前,張樺神清氣爽,語氣中掩飾不住喜悅,“我要在上海開5家比亞迪店,其中2家比亞迪4S店、3家直營店。”事實上他也這么做了,他建店的信心來自他樂觀看待車市的走向和比亞迪未來。
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<br />2009年A2網只有5家店,他們店年銷售額達到了1.4億元,他希望通過覆蓋更多的網點來增加銷量。但是他建店的速度還是沒有趕上比亞迪建店的速度。
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<br />比亞迪一位區域經理坦承,從2009年開始,每個區域經理都有必須要完成的“開渠”任務,當時也的確是為了開發而開發,只要完成任務就好。
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<br />“比亞迪汽車給經銷商畫的餅非常大,廠家政策看起來非常優厚,很多經銷商都認為比亞迪的投資回報率還不錯。其實經銷商很難完成銷量目標,最後可能會陷入無休止的怪圈。”一家合資品牌網絡渠道部高級經理告訴記者。
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<br />“2009年是比亞迪招商比較瘋狂的時候,門檻非常低。只要商家有地,交上保證金50萬到200萬不等都能加入,有個樣板門面就可以賣車。哪怕2個店的地址隔了幾百米他都讓你建,浦東的中馳4S店和弘仁4S店距離相差不到1公里。”李響說。
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<br />降低了經銷商入圍門檻后,因為房子拆遷突然有錢,服裝店老板、修理廠的老板都加入了銷售比亞迪的網絡渠道。缺少汽車銷售經驗,管理能力弱是這些4S店的短板,這為后來比亞迪網絡渠道的“反水”埋下隱患。
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<br />通過新品來分設網絡和擴張渠道,遲來的比亞迪的汽車一時間成為自主品牌中增速最快的企業。2007年比亞迪的經銷商數量在300家左右,一年后躍升到500家,2010年增至1200多家。
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<br />從當時來看,網絡渠道以及比亞迪采取的銷售策略確實幫助比亞迪銷量連續5年翻倍增長。2005年,比亞迪F3上市,比亞迪2006年完成5萬銷量,2007年10萬銷量,2008年翻倍到20萬,2009年實現接近44.5萬輛的銷量,按照每年翻倍的速度, 2015年比亞迪或許真能實現銷量全國第一,2025年全球第一的愿景。
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<br />調整渠道
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<br />不過,制造業有其自然發展的規律,不以一家企業的發展和愿景為參照物。在汽車產業歷史上,還沒有一家汽車公司能夠持續性地實現翻倍增長。
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<br />經過2年高速增長的中國車市今年突然戛然而止。根據中國汽車工業協會發布的數據,上半年我國汽車產銷915.60萬輛和932.52萬輛,同比增長2.48%和3.35%,比2010年增速的32%回落了29個百分點左右,這給一直高速擴張的比亞迪汽車打了個措手不及。
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<br />今年上半年,比亞迪銷量僅為22.58萬輛,下滑22%,但是比亞迪的經銷商仍然有上千家,不少經銷商都在等廠商政策的調整。還沒有等到政策調整,先是聽到比亞迪總經理夏治冰的辭職消息。夏治冰的離開,讓業界以及比亞迪本身再次反思比亞迪汽車的渠道管理。
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<br />廠家重量經銷商重利。經銷商投資是為了賺錢,如果經營一直虧損,肯定不會繼續再跟廠家干。上海最大的汽車經銷商集團——永達汽車相關負責人告訴記者,廠商和經銷商是共贏關系,是魚和水的關系,誰也離不開誰。
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<br />知名汽車分析師賈新光認為,這兩年的快速擴張,每家汽車企業的銷售網絡都存在經營狀況參差不齊的問題,銷售網絡的密度已經成為經銷商的隱憂。大規模建店,從短期看廠家的批發量上去了,但經銷商的利潤沒了。如果銷售渠道不穩定,即便市場復甦,也很難對銷量起到立竿見影的作用。
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<br />夏治冰在微博上承認比亞迪汽車渠道管理上的功利。夏治冰說:“由於我個人的急功近利,誤導了公司及銷售團隊。我定的策略對商家苛刻;我要求過高,團隊壓力過大后管理渠道用力太猛,傷害了經銷商朋友,於此致歉。”。
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<br />其實,在夏治冰辭職之前,比亞迪已經出現了一些調整策略,廠家不再對經銷商壓庫,經銷商根據自己的銷售能力來提車。即使不壓庫,商家網點太多,客戶都被分流了,經銷商還是面臨經營困難,仍然沒有辦法經營下去。下一步比亞迪汽車必須直面調整渠道,勸退一批能力弱的經銷商,并加強對經銷商管理能力的提升。
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<br />離開張樺辦公室前,他拋出了一個問題,“比亞迪汽車接下來2年會轉好嗎?我是退網還是再堅持一段時間?”這個問題,留給了比亞迪汽車新任總經理侯雁。
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<br />(陳巍 實習編輯)
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<br />免責聲明:本文所載資料僅供參考,并不構成投資建議Dance With Mehttp://www.blogger.com/profile/11452760400913968147noreply@blogger.com0tag:blogger.com,1999:blog-3761262596373585191.post-84431487803428845382011-08-21T16:27:00.000-07:002011-08-21T16:28:09.830-07:00Should Investors Follow Charlie Munger Into Byd Company?http://seekingalpha.com/article/270586-should-investors-follow-charlie-munger-into-byd-company
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<br />The recent questionable trading of former Berkshire Hathaway (BRK.B) employee David Sokol brought forth the fact that Charlie Munger owned Byd Company (BYDDY.PK) long before Berkshire took a large stake in the company. Of course, owning a stock for years before Berkshire bought it is quite a bit different than owning a stock for a few weeks before pitching it to Berkshire as an acquisition target.
<br />Byd Company is a Chinese battery, mobile phone and electric car company. It was started in 1995 by Wang Chuan-Fu, a chemist and Chinese government employee, with $300,000 he raised from relatives with the intention of manufacturing rechargeable batteries. By 2000, Byd was one of the largest manufacturers of cell phone batteries and in 2003 entered the electric car market by acquiring a Chinese state-owned car company. The electric car venture was also quickly a roaring success as Byd’s F3 sedan became the best-selling sedan in China in 2009.
<br />Munger apparently was introduced to Byd by money manager Li Lu. Lu manages an investment fund that Munger is the largest shareholder in. According to this article from Reuters, Munger invested $50 million with Lu in 2004, and a great deal of that money was invested in Byd Company.
<br />In 2008, Munger encouraged Sokol, then-manager of Berkshire subsidiary MidAmerican, to look into Byd as an investment opportunity for Berkshire/MidAmerican. Munger thought that if he could get Sokol convinced that Byd was a great opportunity, it would be more likely that Warren Buffett could also get interested. Long story short: Sokol was impressed -- and so was Buffett, as Berkshire bought 10% of the company.
<br />And that investment has worked out pretty well for Berkshire. At December 31, 2010, Berkshire’s stake in Byd Company was worth $1.182 billion versus an original cost of $232 million. The current share price of the unsponsored ADR $6.98, however, is off significantly from its high of $22.24 reached in 2009, and from the December 31, 2010 price of $10.95.
<br />So that starts to get a little interesting. Buffett thought enough of the long term prospects of Byd Company to not sell when the stock reached $22.24. And now we have an opportunity to buy at $6.98. But my issue is that I have no business investing in an electric car company. I don’t know anything about the technology that Byd uses and its superiority over competitors. What I need is a sign from someone much, much smarter than me.
<br />Perhaps we have one from Munger, who -- as you are likely aware -- is a bit of a curmudgeon who is very hard to please. He carries this over into his investing style, as he invests seldom and only in what he believes are exceptional opportunities. When he ran his hedge fund back in the 1960s and early 1970s, he favored a very concentrated portfolio, and his conviction in concentrated investing has seemingly only strengthened over time. And not only is Munger concentrated, he is really good. So if something gets his attention and I get a shot to buy at the same price, I’m interested.
<br />Consider how he has managed the finances of the Daily Journal Corporation (DJCO). At its 2008 year end, the Daily Journal had roughly $21 million in cash and US Treasuries. One year later, the Daily Journal had $8 million of cash and US Treasuries and $54 million in marketable securities. Where did the additional 40 or so million come from? It wasn’t operations; cash flow for the year was about $8 million. It was from Munger investing virtually all of the $21 million held at the 2008 year end in Wells Fargo (WFC) in early 2009.
<br />The link to the 10K filing is here; check out note 2, which discloses a $15 million equity investment during the year which, by year end, was worth almost $48 million.
<br />Since that investment in early 2009, Munger hadn’t bought a single share of anything for the Daily Journal. Until the most recent quarter, that is. According to the most recent quarterly filing, the Daily Journal purchased over $10 million of two “foreign manufacturing companies.”
<br />Anyway, given how much Munger admires Byd, what are the odds that one of those companies isn’t Byd? And given that Munger hasn’t bought a single share of anything since early 2009, what are the odds that he is making a rash, not well-thought-out investment decision now ?
<br />Byd Company’s share price is now considerably lower than the January to March 2011 period, where Munger was likely buying. How can one resist getting to piggyback on his investment and at a better price?Dance With Mehttp://www.blogger.com/profile/11452760400913968147noreply@blogger.com0tag:blogger.com,1999:blog-3761262596373585191.post-83381237827575186252011-07-04T08:03:00.001-07:002011-07-04T08:03:01.185-07:00In business and in personal affairs, be patient but aggressive when you know what you want; continuous learning.<h2><font class="Apple-style-span" face="verdana, sans-serif" size="2">Investing star Charlie Munger imparts a final few words of wisdom</font></h2><h3><font class="Apple-style-span" face="verdana, sans-serif" size="2">Munger, billionaire Warren Buffett's investing partner for 46 years and vice chairman of Buffett's Berkshire Hathaway, meets with an audience of devotees in Pasadena for the last time.</font></h3> <p><font class="Apple-style-span" face="verdana, sans-serif">By Tom Petruno, Los Angeles Times</font></p><p><font class="Apple-style-span" face="verdana, sans-serif">7:45 PM PDT, July 1, 2011</font></p><div><div style="float: right; text-align: center; padding-bottom: 3px; text-transform: lowercase; color: rgb(136, 136, 136); letter-spacing: 1px; "> <table class="cubeAd"><tbody><tr><td class="adLabel"><font class="Apple-style-span" face="verdana, sans-serif" size="2">advertisement</font></td></tr><tr><td valign="middle" align="center"><div class="miscAd cube"><div id="VE_inivitation_D9126084_5097_3461_393F_086340E60311" class="VE_inivitation_D9126084_5097_3461_393F_086340E60311" width="300" height="250" style="margin-top: auto; margin-right: auto; margin-bottom: auto; margin-left: auto; text-align: center; "> </div></div></td></tr></tbody></table></div><p><font class="Apple-style-span" face="verdana, sans-serif">The aging star met with his adoring fans for the last time Friday and basically told them to get a life.<br><br>"I don't want to be better known than this," Charlie Munger, billionaire Warren Buffett's investing partner for the last 46 years, told an audience of several hundred devotees at the Pasadena Convention Center.<br> <br>Besides, he added with his trademark genial cantankerousness, "You people aren't normal."<br><br>Munger, 87, is vice chairman of Buffett's Berkshire Hathaway Inc. holding company. He also has for decades run Pasadena-based Wesco Financial Corp., a mini-conglomerate that was majority-owned by Berkshire.<br> <br>The annual meeting of Wesco has long been a high point of the year for Munger and Buffett fans for the opportunity to hear directly from Munger, whose unvarnished commentary on the economy, Wall Street and business in general has made him a cult hero.<br> <br>Because Berkshire this spring bought the final 20% of Wesco, the company no longer will have shareholder meetings. But Munger had promised one last chance for shareholders to get together. He also opened the meeting to the public.<br> <br>Munger used his opening remarks to take another jab at the "megalomania" of bankers who he says brought on the real estate bubble of the last decade. A lot of banking, he said, had become "gambling in drag."<br> <br>He also said some of Wall Street's computerized traders were the equivalent of "letting rats into the granaries."<br><br>The audience ate it all up.<br><br>Herbert Yu, a 44-year-old executive at a Santa Ana printing company, said Munger and Buffett "are my heroes." Burned by dot-com stocks in the early 2000s, Yu said he soon after adopted the famed investors' "value" investing style. "I've been outperforming the market" since then, he said.<br> <br>Yu brought his two children, ages 10 and 7, to the meeting because he said he wanted them to soak up Munger's wisdom — even if they weren't quite sure what they were hearing. "I made a deal with them: Sit here for one hour, and then you can go to the mall," he said.<br> <br>Munger held forth for three hours, with the final two devoted to questions from his admiring audience. Many asked life-coaching questions — how to succeed in marriage, with children and in careers.<br><br>In business and in personal affairs, be patient but aggressive when you know what you want, Munger advised. He also stressed the importance of continuous learning. His current field of study: astrophysics.<br> <br>Not surprisingly, some of his fans tried to draw him out for advice on individual stocks. He said Coca-Cola Co., a longtime Berkshire stock holding, was "not nearly as good a business as 20 years ago," but that as major companies go, it still was "one of my favorites."<br> <br>Munger also praised Costco Wholesale Corp., on whose board he sits. The retailer "is about as admirable a capitalist enterprise as ever existed," Munger said.<br><br>A few attendees asked about Berkshire's controversial investment in Chinese automaker BYD, which has suffered a plunge in sales and earnings. Munger, who typically has great praise for China, said he "loved the people" at BYD and expected to hold the stock "to the end."<br> <br>Asked whether Berkshire's own shares were a true value at the current price ($117,050 for a Class A share), Munger answered indirectly: "I think people who own Berkshire at the current price will do quite all right sitting on their patoots."</font><br> </p></div> Dance With Mehttp://www.blogger.com/profile/11452760400913968147noreply@blogger.com0tag:blogger.com,1999:blog-3761262596373585191.post-37323241876638660732011-03-27T02:01:00.001-07:002011-03-27T02:01:04.417-07:00沃特・施洛斯(Walter Schloss)and Pricing Power than Management<div><a href="http://blog.sina.com.cn/danbin168">http://blog.sina.com.cn/danbin168</a></div> <div>(本文刊登于中国工商银行《现代商业银行・管理智慧》杂志2011年第2期)</div> <p style="TEXT-INDENT: 2em">纽约的基金经理人沃特・施洛斯(Walter Schloss)有两个让人印象深刻的地方,一个是他算得上在投资领域中工作最长的人——近半个世纪;另一个是在其工作的时间里,与标准普尔500指数不到10%的增长率相比,施洛斯为股东带来了平均20%多的年复合收益率,这是一个非常优秀的业绩。</p> <p style="TEXT-INDENT: 2em">施洛斯最早的投资可以追溯到1934年,那时他只有18岁,他就在华尔街上开始投资。1935年,施洛斯向一位名叫阿蒙德・俄普夫的合伙人请教如何走进“统计世界”,这位合伙人说,有个叫本杰明・格雷厄姆的人刚刚出版了一本《证券分析》。他说:“读这本书吧,如果你掌握了它说的一切就不必看别的了。”于是施洛斯从那一年起到1940年进入纽约证券交易学院,师从格雷厄姆。后来,他干脆辞去工作,效力于格雷厄姆。1946年施洛斯加盟格雷厄姆-纽曼公司。施洛斯工作的重点就是潜心寻找价格低于营运资本的股票。施洛斯通过系统研究,发现格雷厄姆-纽曼公司的经营状况非常优异。在1936-1946年10年中,美国股市总体趋势是下跌的,比如标普工业指数下跌了0.6%,而格雷厄姆-纽曼公司的年平均收益率却高达11.8%。特别是1942-1945年4年中,标普工业指数上升了26%,而格雷厄姆-纽曼公司的年平均收益率也同步上升了26.3%。</p> <p style="TEXT-INDENT: 2em">施洛斯第一次出现在人们的视野里是在1971年。当时亚当・史密斯在《超级金钱》一书中介绍了巴菲特和他谈论有关沃特・施洛斯的事迹之后,对施洛斯做了这样一番的描述:他从来不运用或接触有用的资讯。在华尔街几乎没有人认识他,所以没有人提供他有关投资的观念。他只参考手册上的数字,并要求企业寄年报给他,情况便是如此。当把沃特介绍他们认识时,巴菲特曾经说施洛斯“从来没有忘记自己是在管理别人的资金,这进一步强化了他对于风险的厌恶。”史密斯写道,沃特有高尚的品格.并以务实的态度自持。对他来说.金钱是真实的,股票也真实的——并从此而接受了“安全边际”的原则。沃特的投资组合极为分散,目前拥有的股票远越过100支。他了解如何选股,将价格远低于其价值者出售给私人投资者。这便是他所做的一切。他不担心目前是不是一月份,不在乎今天是不是星期一,也不关心今年是不是大选年。他的想法非常单纯,如果某家公司值一美元,若我能够以40美分买进,我迟早会获利。他便是如此不断地行动:他所持有的股票种类远比巴菲特的多,而且比巴菲特更不关心企业的本质;巴菲特对沃特似乎没有太大的影响力。这是他的长处之—,没有人能够对他产生足够的影响力。</p> <p style="TEXT-INDENT: 2em">第二次施洛斯出现在人们的视野里是在1984年。当时沃伦・巴菲特在哥伦比亚大学发表题为《格雷厄姆-多德都市里的超级投资者们》的著名演讲,举的第一个例子就是施洛斯。早在学生时代,巴菲特就在哥伦比亚大学遇见施洛斯,那时施洛斯是参加了格雷厄姆的夜间课程。后来两人一起在格雷厄姆-纽曼工作。有一次巴菲特前往新泽西参加一家格雷厄姆持有股份的公司年会,而同样在格雷厄姆-纽曼公司工作的沃特・施洛斯刚好也在那里。他们开始交谈,一起吃中饭,从此成为好友。巴菲特说沃特没有上过大学,但他在纽约金融学院选修了本・格雷厄姆教授的夜间课程。1955年离开了格雷厄姆—纽曼公司,在其后28年中,他取得了优秀的投资业绩记录。巴菲特回忆他和施洛斯的往事,亚当・史密斯就是经他介绍采访施洛斯的。后来史密斯将施洛斯的事迹写进了《超级金钱》。</p> <p style="TEXT-INDENT: 2em">当施洛斯第三次出现在人们的视野里是在2001年。当时哥伦比亚大学商学院著名教授布鲁斯・格林威尔在《价值投资:从格雷厄姆到巴菲特》中花了整整一个章节介绍施洛斯。格林威尔称施洛斯是“极简抽象主义者”。说他的办公室很简陋,从来不访问客户,很少谈管理理念,不和分析师交流,也不上网,不会被说服做他不愿意做的事,甚至和别人谈话时,也要限制时间。他只相信自己的分析,长期以来遵循他的惯例:只买便宜的股票。这一方法使得他几乎专注于研究上市公司每个季度发布的财务报告。施洛斯的投资策略就是“买便宜的”。这里的便宜是指相对于价值的价格。施洛斯最注意的就是价格下跌的股票。最好的情况就是股票能下跌到2年或3年来的最低点,而通常是大多数投资者最不能容忍的事,大多数投资者只注意大家都看好的股票。</p> <p style="TEXT-INDENT: 2em">施洛斯只买股票,既不会投资于金融衍生工具,也不会购买股指或者商品,更不会卖空——他曾经卖空过,并且从中赚了钱,然而这种经历却令人不快。他绝不会试图控制市场,尽管他会借助市场来知道到底那只股票更便宜。当他找到一只便宜的股票时,他甚至会在他分析研究完成之前就把它买下来,而事实上,他对很多公司都有一个很基本的了解,他还通过价值线或标普指南迅速浏览这家公司的财务状况。施洛斯认为,要想真正了解一只股票,唯一的办法就是去购买它。由于他持有的时间一般是4至5年,因此他有足够的时间来进一步了解这家公司。他会继续查看季度报表,当然也不会忽略价格波动,甚至是每股2美分的收益或损失。施洛斯所关注的公司通常不处于那些变化快的行业,因此他可以原地不动的等待着。这就是格林威尔所说的“极简抽象主义”。</p> <p style="TEXT-INDENT: 2em">施洛斯的儿子名叫埃德温,埃德温是施洛斯好助手,他完全秉承他父亲的投资原则,因此父子俩同心同德。但是埃德温认为他也非常容易犯错误。这就是首次往往买进太多,以至于当价格进一步滑落时无法再买进。如果他首次买进后,价格不再进一步下跌,那么他的决策就是正确的。但是许多时候事与愿违,当然他也总有机会能够将平均成本降低,即以更低的价格进一步买进。因为父子俩久经沙场,他们不相信市场会与他们背道而驰,他们坚信价格是会回升的。当几十年的良好收益证实了他们的睿智时,谦虚就逐渐转为自信。</p> <p style="TEXT-INDENT: 2em">施洛斯是一位优秀的基金管理人,他对他的客户始终忠贞不渝。在基金没有获利的年份,施洛斯为了将支出控制在最低水平,甚至取消了自己应得的管理报酬。施洛斯说:“如果我的工作没有做好,就不应该获得报酬。”对此,巴菲特由衷地赞叹施洛斯说:“我想施洛斯的经营方式为我们所有人都上了深刻的一课(芒格已经领会其中的要义)。施洛斯持有所罗门兄弟公司的股票有一年之久,收益显著,而正是这只股票令伯克希尔不得不开动‘不可或缺号’(指巴菲特的私人飞机)的引擎,载着我往返于纽约和奥马哈之间穷于应付。”在施洛斯的股东里,有的股东的父母就曾是他的股东,有的甚至三代都是他的股东。他们当中的许多人算不上是有钱人,因此他们把钱投放在施洛斯的公司里,对于他们来说是非常重要的。这也是为什么施洛斯下定决心不辱使命的原因。不过,有意思的是,施洛斯就是不愿意向股东们透露他所买的股票名称,因为他所投资的通常都是一些拿不出手的股票。这使得人们不能在鸡尾酒会或者是其他什么地方可以吹嘘一下。</p> <p style="TEXT-INDENT: 2em">1994年,在纽约金融协会举办的格雷厄姆诞辰100周年的纪念仪式上,巴菲特和施洛斯进行了一次亲密的谈话。巴菲特说,格雷厄姆觉得任何形式都是一种欺骗,例如召开只有高层管理人员参加的会议,却将个人投资者排除在外。然而巴菲特倾向于进行“善意的欺骗”,但是在这方面施洛斯却是保守分子。在过去几年里,施洛斯的确已经取得了不俗的投资记录。施洛斯不喜欢跟管理层谈话或者与人们进行过多的交流,是因为他曾经亲眼目睹了格雷厄姆向一个投资商透漏了一只股票后,当他回到办公室时,那只股票上涨得他都无法购买。施洛斯相信,相对而言,股票更容易打交道,因为它不会和你争论,不会有情绪,你也不需要把它紧紧握在手中。他说,如今的巴菲特是个非同寻常的家伙,因为他不仅是位优秀的分析师,还是优秀的推销员,是一位有着卓越判断能力的人,这些特质是非同寻常的组合。施洛斯坚信,如果他打算收购某人的公司,巴菲特第二天肯定会退出。但有时施洛斯会觉得对巴菲特的性格或其他因素判断失误,抑或是施洛斯可能自己觉得没有意识到,巴菲特的确是由于不喜欢这一公司,真的想出售该公司才放弃的。当买下某家公司后,巴菲特会放手让公司原来的管理层继续经营该公司,这也是一个特殊的显著的特点。</p> <p style="TEXT-INDENT: 2em">施洛斯最大的“缺点” 是喜欢拥有大量的股票,最多时会有100只,不过往往最大的20只股票占了大约60%的份额。有时候他甚至会使用60%的资金来购买单只股票,这样的集中度一般是罕见的。巴菲特并不赞成他的这些做法,但是施洛斯说他无法控制自己。施洛斯说,“你必须做一些令自己觉得开心的事情,即使这些事情可能并不像巴菲特所从事的事情那样有利可图,毕竟巴菲特是独一无二的。”施洛斯拥有这么多的股票,其实其中某一单一股票的风险并不显著,他试图根据资产而非收益来买进被低估的股票。依据资产而非收益进行判断,使施洛斯的投资活动得到了改善,因为收益容易发生变动。巴菲特坚持自己的观点,认为施洛斯拥有数不清的证券,是“二手雪茄烟蒂”的投资方法:你找到了这些充分燃烧、只剩烟蒂的雪茄,它们是免费的,你把它们捡起来,还可以抽上一口。但任何事物都是有价的。巴菲特说,“最近施洛斯罕见地说他要买一根‘新雪茄’,但他是在削价处理时买的。”</p> <p style="TEXT-INDENT: 2em">施洛斯在另一场合这样评价巴菲特;“从来都没有人能做到像他那样……因为要使公司实现持续的增长是非常困难的,也许有一天他会用它(伯克希尔)吞并加拿大。”关于伯克希尔公司居高不下的股价,施洛斯认为把只有发行在外的公司股票数量乘以股价之后得到的市值,再与其他收入和资产规模都较小的市值进行比较才是明智的,“但遗憾的是,人们通常并不考虑他们打算买进股票的那个公司的市值,他们仅仅关注每股价格而不是公司的价值。”</p> <p style="TEXT-INDENT: 2em">施洛斯就是这样,他有自己独立的思考。实际上在1980年代以前,巴菲特基本上就是实施这种投资策略的。当然,后来巴菲特又揉进了菲利普・费雪的成长投资策略,这也不能说明巴菲特就是错误的或者是“背叛”了,这只是两个人的投资风格不同而已。施洛斯从格雷厄姆那里学到了买入廉价股的策略,坚持五十年不动摇,却从未想去改变它,而且任凭时光的流逝、风云的变幻,任何人也不能对他施以影响,从这一点上说,他确实是格雷厄姆最忠实的信徒。 </p> <p style="TEXT-INDENT: 2em"></p> <p> <span style="LINE-HEIGHT: normal; FONT-FAMILY: simsun; FONT-SIZE: 12px; FONT-WEIGHT: normal"><font face="宋体, arial, sans-serif"><span style="LINE-HEIGHT: normal; FONT-FAMILY: simsun; FONT-SIZE: 12px; FONT-WEIGHT: normal"></span></font>巴菲特:我选股最看重企业定价力而非管理</span> </p> <div style="TEXT-ALIGN: left; PADDING-BOTTOM: 0px; LINE-HEIGHT: 14px; BORDER-RIGHT-WIDTH: 0px; OVERFLOW-X: hidden; OVERFLOW-Y: hidden; MARGIN: 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; FONT-FAMILY: Arial, Helvetica, sans-serif; BORDER-TOP-WIDTH: 0px; BORDER-BOTTOM-WIDTH: 0px; FONT-SIZE: 12px; BORDER-LEFT-WIDTH: 0px; PADDING-TOP: 10px"> <font face="宋体, arial, sans-serif"><span style="LINE-HEIGHT: normal; FONT-FAMILY: simsun; FONT-SIZE: 12px; FONT-WEIGHT: normal"><span><a style="COLOR: rgb(0,0,0); TEXT-DECORATION: none" href="http://www.sina.com.cn/">http://www.sina.com.cn</a></span> <span>2011年02月18日 20:54</span> <span style="COLOR: rgb(204,0,0)">新浪财经</span></span></font></div> <div style="PADDING-BOTTOM: 0px; LINE-HEIGHT: 23px; BORDER-RIGHT-WIDTH: 0px; MARGIN: 15px 0px 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; BORDER-TOP-WIDTH: 0px; BORDER-BOTTOM-WIDTH: 0px; FONT-SIZE: 14px; BORDER-LEFT-WIDTH: 0px; PADDING-TOP: 0px"> <div style="PADDING-BOTTOM: 0px; BORDER-RIGHT-WIDTH: 0px; MARGIN: 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; BORDER-TOP-WIDTH: 0px; BORDER-BOTTOM-WIDTH: 0px; FONT-SIZE: 12px; BORDER-LEFT-WIDTH: 0px; PADDING-TOP: 0px" align="center"> </div> <div style="TEXT-ALIGN: center; PADDING-BOTTOM: 0px; BORDER-RIGHT-WIDTH: 0px; MARGIN: 0px 0px 5px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; BORDER-TOP-WIDTH: 0px; BORDER-BOTTOM-WIDTH: 0px; CLEAR: both; FONT-SIZE: 12px; BORDER-LEFT-WIDTH: 0px; PADDING-TOP: 0px"> <center style="FONT-SIZE: 12px"></center></div> <p style="TEXT-ALIGN: left; PADDING-BOTTOM: 0px; LINE-HEIGHT: 23px; BORDER-RIGHT-WIDTH: 0px; MARGIN: 15px 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; BORDER-TOP-WIDTH: 0px; BORDER-BOTTOM-WIDTH: 0px; FONT-SIZE: 14px; BORDER-LEFT-WIDTH: 0px; PADDING-TOP: 0px"> 新浪财经讯 北京时间2月18日晚上消息,据美国金融危机调查委员会(FCIC)发布的谈话录影带,股神巴菲特(Warren Buffett)在与FCIC对话时指出,他评估一家企业时主要看重企业提高产品价格的能力,有时他甚至不会考虑谁掌管这家公司或管理的水平如何。</p> <p style="TEXT-ALIGN: left; PADDING-BOTTOM: 0px; LINE-HEIGHT: 23px; BORDER-RIGHT-WIDTH: 0px; MARGIN: 15px 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; BORDER-TOP-WIDTH: 0px; BORDER-BOTTOM-WIDTH: 0px; FONT-SIZE: 14px; BORDER-LEFT-WIDTH: 0px; PADDING-TOP: 0px"> 巴菲特表示:“评估一家企业时唯一重要的决定性因素是定价能力。如果你有能力提价而业务又不会流向竞争对手,你拥有的就是一家很好的企业。如果你在提价10%前还要祈祷,你拥有的就是一家糟糕的企业。”</p> <p style="TEXT-ALIGN: left; PADDING-BOTTOM: 0px; LINE-HEIGHT: 23px; BORDER-RIGHT-WIDTH: 0px; MARGIN: 15px 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; BORDER-TOP-WIDTH: 0px; BORDER-BOTTOM-WIDTH: 0px; FONT-SIZE: 14px; BORDER-LEFT-WIDTH: 0px; PADDING-TOP: 0px"> 现年80岁的巴菲特是世界第三号富豪,他的个人财富源自辉煌的股票投资和企业收购生涯。巴菲特曾收购过铁路和发电商等诸多企业,这些企业的定价力源自其客户几乎找不到其他选择。巴菲特还增持了可口可乐和卡夫食品等公司的股份,这类企业的品牌具有吸引力,能够吸引和留住客户。</p> <p style="TEXT-ALIGN: left; PADDING-BOTTOM: 0px; LINE-HEIGHT: 23px; BORDER-RIGHT-WIDTH: 0px; MARGIN: 15px 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; BORDER-TOP-WIDTH: 0px; BORDER-BOTTOM-WIDTH: 0px; FONT-SIZE: 14px; BORDER-LEFT-WIDTH: 0px; PADDING-TOP: 0px"> 巴菲特在录影带中还称:“出色的企业并不必然需要良好的管理。”FCIC对巴菲特的调查集中在他对穆迪公司的投资上。一些国会议员曾批评道,这家债券评级机构在房地产泡沫期向客户提供了虚夸的信用评级。巴菲特的回答是,他持有穆迪的股票是因为穆迪的市场份额领先,它与主要对手标普的强强组合使两家公司具有很大的定价灵活度。</p> <p style="TEXT-ALIGN: left; PADDING-BOTTOM: 0px; LINE-HEIGHT: 23px; BORDER-RIGHT-WIDTH: 0px; MARGIN: 15px 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; BORDER-TOP-WIDTH: 0px; BORDER-BOTTOM-WIDTH: 0px; FONT-SIZE: 14px; BORDER-LEFT-WIDTH: 0px; PADDING-TOP: 0px"> 巴菲特指出:“我对穆迪的管理层一无所知。如果你拥有一个城镇上唯一的一家报纸,这种状况持续了约五年时间,你就拥有了定价能力,你不用到办公室施加太多的管理。”</p> <p style="TEXT-ALIGN: left; PADDING-BOTTOM: 0px; LINE-HEIGHT: 23px; BORDER-RIGHT-WIDTH: 0px; MARGIN: 15px 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; BORDER-TOP-WIDTH: 0px; BORDER-BOTTOM-WIDTH: 0px; FONT-SIZE: 14px; BORDER-LEFT-WIDTH: 0px; PADDING-TOP: 0px"> 加州大学伯克利分校哈斯商学院的经济学教授赫马林(Benjamin E. Hermalin)则认为,具有市场统治地位并不能阻止恶劣的管理随着时间的推移毁掉一家企业。</p> <p style="TEXT-ALIGN: left; PADDING-BOTTOM: 0px; LINE-HEIGHT: 23px; BORDER-RIGHT-WIDTH: 0px; MARGIN: 15px 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; BORDER-TOP-WIDTH: 0px; BORDER-BOTTOM-WIDTH: 0px; FONT-SIZE: 14px; BORDER-LEFT-WIDTH: 0px; PADDING-TOP: 0px"> 去年巴菲特以265亿美元收购了伯灵顿北圣达菲公司,该公司拥有美国西部地区连接煤炭、谷类和消费者产品生产商及销售商的总计超过3万英里的铁路。巴菲特掌管的伯克希尔-哈撒韦集团麾下的电力公司:中美能源控股也拥有定价能力,它向美国大平原地区的家庭出售电力,还负责从怀俄明州向加州输送天然气。(立悟)</p></div> <p style="TEXT-INDENT: 2em"></p> Dance With Mehttp://www.blogger.com/profile/11452760400913968147noreply@blogger.com3tag:blogger.com,1999:blog-3761262596373585191.post-22360056730976639782011-03-25T18:54:00.001-07:002011-03-25T18:54:55.031-07:00Louis who?A Maestro of Investments in the Style of Buffett <div class="byline">By <a title="More Articles by Geraldine Fabrikant" href="http://topics.nytimes.com/top/reference/timestopics/people/f/geraldine_fabrikant/index.html?inline=nyt-per">GERALDINE FABRIKANT</a></div> <div id="articleBody"> <p>CHICAGO — <a title="More articles about Warren E. Buffett." href="http://topics.nytimes.com/top/reference/timestopics/people/b/warren_e_buffett/index.html?inline=nyt-per">Warren E. Buffett</a> is hardly a man of mystery.</p> <p>But when investors gather in Omaha in two weeks for the <a title="Berkshire Hathaway" href="http://www.nytimes.com/mem/MWredirect.html?MW=http://custom.marketwatch.com/custom/nyt-com/html-companyprofile.asp&symb=BRKA;BRKB">Berkshire Hathaway</a> annual meeting, there will be a nagging question mark over the head of the 76-year-old chairman: who might someday replace him in each of the two roles he plays — chief executive of Berkshire Hathaway, and its chief investment officer?</p> <p>A bit more is known about the choice of a future chief executive. Mr. Buffett has said there are three candidates from various Berkshire-owned companies. Buffett watchers speculate that the list includes David L. Sokol of <a title="MidAmerican Energy" href="http://www.nytimes.com/mem/MWredirect.html?MW=http://custom.marketwatch.com/custom/nyt-com/html-companyprofile.asp&symb=MDPWL;MDPWM;MDPWN;MWPSL;MWPSM;MWPSP">MidAmerican Energy</a> Holdings; Ajit Jain, head of the reinsurance division of Berkshire's National Indemnity Company; Tony Nicely, chief executive of Geico; Joseph P. Brandon, chairman of General Re; and Richard T. Santulli, founder of NetJets.</p> <p>The bigger mystery is who will become the chief investment officer. Mr. Buffett says he does not know himself. On this point of succession, "frankly, we are not as well prepared," he wrote in his 2006 shareholder letter last month.</p> <p>Here is a clue, though. He or she will probably be a lot like Louis Simpson.</p> <p>Louis who?</p> <p>Mr. Simpson, 70, has long overseen the investment portfolio of Geico, the insurance company Berkshire owns, which is now valued at more than $4 billion. He is also the only man other than Mr. Buffett who has managed stock investments in Berkshire's portfolio. </p> <p>Mr. Buffett is a big fan. "He is the kind of person we are looking for: smart, classy, loyal," he said of Mr. Simpson in a telephone interview on Friday. But Mr. Simpson is just six years younger than Mr. Buffett, who has written that "for the long term, though, we need a different answer."</p> <p>Applicants would do well to learn from Mr. Simpson, which is easier now that he has agreed to his first interview since Berkshire Hathaway gained total control of Geico in 1995.</p> <p>In many ways, Mr. Simpson, whose title at Geico is chief executive for capital operations, is a lot like his boss. The two have the same general distaste for technology stocks. They both favor intensive research to find attractive companies to invest in, and they share a willingness to bet on returns from just a handful of stocks. </p> <p>In terms of style, though, there are some major differences. Mr. Simpson, a deliberate, slow-talking executive, has maintained much lower visibility. "I have always felt I could do a better job in adding value by being somewhat removed from the circus and parimutuel atmosphere of the market," he said. </p> <p>Mr. Simpson works in Chicago, where he moved from the La Jolla district of San Diego two years ago because his second wife, Kimberly, a chemical engineer, missed the energy of urban life. </p> <p>Though he is already well-connected among Chicago's power brokers, he tends to describe people in terms like "fancy" if they are not the plain-spoken types that populate Berkshire's host of companies.</p> <p>Mr. Simpson's work life is similarly low-key. On a recent spring day, he sat in his three-room office suite on North Michigan Avenue here, where he works with a small staff, explaining that it had been a particularly busy time. </p> <p>Busy, though, is relative. There were no researchers running around, no Bloomberg terminals, and no interruptions. "We are sort of the polar opposites of a lot of investors," Mr. Simpson said. "We do a lot of thinking and not a lot of acting. A lot of investors do a lot of acting, and not a lot of thinking." </p> <p>He does not crow about Geico's performance except to say that "it has been very, very good," and he is disarmingly honest about investments that have not worked out. </p> <p>"Pier 1 was a horrible mistake," he acknowledged. "It was our own doing. They were totally out of touch fashion-wise, and it was a disaster." </p> <p>Such mistakes notwithstanding, his track record has even led Mr. Buffett to brag about him periodically. In 2004, the only time that Berkshire ever stated Geico's performance separately, Mr. Simpson over 24 years had posted a 20 percent average annual gain, surpassing the Standard & Poor's 500-stock index by 6.8 percentage points.</p> <p>Since 2004, Geico's results have been somewhat better than the S.& P. index, he said, declining to be specific. In 2005, the S.& P. was up 4.9 percent, compounded. In 2006, it rose 15.8 percent. </p> <p>"He has an amazing record," Mr. Buffett said in the interview. "He does not make a lot of noise about it. He is a very sensible, sound, decent guy." </p> <p>To find stocks, Mr. Simpson does not read analysts' reports. "They have their own agenda," he said. </p> <p>Nor does he search data on the Bloomberg terminal for ideas. "If I have the Bloomberg on, I find I am looking at what the market is doing," he said. "I am looking at every news story. I really like to be the one who is parsing the information, rather than having a lot of irrelevant information thrown at me." </p> <p>Sometimes he speaks with Mr. Buffett several times a week and sometimes not for a month or two. Mr. Simpson makes his own decisions and essentially works alone. </p> <p>"The more people you have, the more difficult it is to do well," he said. "You have to satisfy everybody. If you have a limited number of decision makers, they are more likely to agree."</p> <p>It is hard to know which stocks are Geico's and which are Mr. Buffett's picks. Mr. Simpson holds about 10 major positions: According to filings with the Maryland Insurance Administration, they are in American Standard, <a title="More information about Nike Inc." href="http://topics.nytimes.com/top/news/business/companies/nike_inc/index.html?inline=nyt-org">Nike</a>, <a title="More information about Comcast Corporation." href="http://topics.nytimes.com/top/news/business/companies/comcast_corporation/index.html?inline=nyt-org">Comcast</a>, <a title="Costco Wholesale" href="http://www.nytimes.com/mem/MWredirect.html?MW=http://custom.marketwatch.com/custom/nyt-com/html-companyprofile.asp&symb=COST">Costco Wholesale</a>, <a title="First Data" href="http://www.nytimes.com/mem/MWredirect.html?MW=http://custom.marketwatch.com/custom/nyt-com/html-companyprofile.asp&symb=FDC">First Data</a>, <a title="More information about Home Depot Inc." href="http://topics.nytimes.com/top/news/business/companies/home_depot_inc/index.html?inline=nyt-org">Home Depot</a>, ServiceMaster and <a title="UnitedHealth Group" href="http://www.nytimes.com/mem/MWredirect.html?MW=http://custom.marketwatch.com/custom/nyt-com/html-companyprofile.asp&symb=UNH">UnitedHealth Group</a> (he bought it after the stock-option scandal). Geico's biggest position is <a title="Tesco" href="http://www.nytimes.com/mem/MWredirect.html?MW=http://custom.marketwatch.com/custom/nyt-com/html-companyprofile.asp&symb=">Tesco</a> of Britain, a stock also owned by Berkshire Hathaway. </p> <p>Mr. Simpson found Nike, one of Geico's most successful holdings, through a stake in the rival Reebok. He had hired a journalist-turned researcher, and the researcher thought that Reebok was the "cat's meow," Mr. Simpson recalled, adding: "Paul Fireman ran the company, but not particularly well. The more we got into it, the more I saw the really quality company with the franchise and sports brand was Nike. It was truly a worldwide brand that did not have a lot of penetration in growing parts of the world such as Asia."</p> <p>Thomas Russo, a partner in Gardner Russo & Gardner, also studied that industry for investors. Geico "did an enormous amount of research," he said. "They wanted to understand the management questions," adding, "We were researching companies in that same sector, and we had a pretty good idea of what was going on."</p> <p>Mr. Simpson, who grew up in Chicago and has three sons, began his investing career at Stein Roe & Farnham. During a heady investment period in the late 1960s, he learned the perils of market timing when he worked for Shareholders Management, then a hot fund company run by Fred Carr. But when the market turned, Shareholders' Enterprise Fund took a nose dive, and there were substantial redemptions. Mr. Simpson resigned. "I viewed myself an investor, and they were trading-oriented," he said. </p> <p>From there, he joined Western Asset Management where he rose to chief executive. Still, that firm basically followed analysts' recommendations. </p> <p>It was not until Geico's chairman, John J. Byrne, called him in 1979 to become its chief investment officer that Mr. Simpson found a niche where he could put his own ideas to work. Berkshire Hathaway was already a shareholder in Geico, and Mr. Byrne sent several candidates to see Mr. Buffett about the management job. After a four-hour interview with Mr. Simpson, Mr. Buffett called Mr. Byrne. "Stop the search," Mr. Bryne recalled him saying. "That's the fellow." </p> <p>Mr. Simpson's compensation has not been disclosed since Berkshire took over Geico in 1995. At that time, he received a moderate salary and a bonus based on how much the portfolio outperformed the S.& P. 500. He said that structure had not changed. </p> <p>Mr. Buffett has noted that Mr. Simpson could probably make more money elsewhere. Mr. Simpson says he is not tempted. </p> <p>Does the fact that Mr. Buffett seeks a younger heir for the long term upset him? </p> <p>"If he would have asked me to take over the investments for Berkshire, I certainly would have done it," Mr. Simpson said, "but I certainly did not seek it out or wait for it to happen."</p> <p>That kind of patience has proved to be its own reward. "Lou can keep running money as long as he wants," Mr. Buffett said. </p></div> Dance With Mehttp://www.blogger.com/profile/11452760400913968147noreply@blogger.com0tag:blogger.com,1999:blog-3761262596373585191.post-27259156650548842492011-02-11T06:13:00.001-08:002011-02-11T06:13:38.187-08:00Interview: Top Indian Value Investor Chetan Parikh Outlines His Fundamental Approachhttp://seekingalpha.com/article/173189-interview-top-indian-value-investor-chetan-parikh-outlines-his-fundamental-approach<br /><br />I’m exceptionally proud and honored to present an interview with one of the top value investors of India, Mr. Chetan Parikh. This interview with Mr. Parikh represents one of the highlights of my career. Mr. Parikh is a man whom I admire and who has extensively contributed to the value investing community (via Capital Ideas Online and his numerous writings). I hope you enjoy the interview.<br /><br /><br />Mr. Chetan Parikh’s Background<br /><br /><br />Chetan Parikh is a Director of Jeetay Investments Private Limited, an asset management firm registered with SEBI. He holds an MBA in Finance from the Wharton School of Business and a BSc in Statistics & Economics from the University of Bombay. He has been investing in the Indian capital markets through proprietary investment companies and family trusts.<br /><br /><br />Chetan was rated amongst India’s best investors by Business India magazine. He is also the co-promoter of capitalideasonline.com, a well regarded investment website. His writings have been published in Business Standard, Business World, The Economic Times, and Business India. He is a visiting faculty member at Jamnalal Bajaj Institute of Management Studies (University of Bombay) for the MBA course.<br /><br /><br /><br />Opening Questions<br /><br /><br />Q. There are many different approaches to investing. What led you to choose the value approach?<br /><br /><br />A. Value investing is a logical, safe and disciplined approach to investing. It requires a lot of patience which fits in with my temperament.<br /><br />Q. Which investors do you admire? Besides these investors who else has influenced you?<br /><br />A. Any value investor can learn a lot from the Masters. In India I’ve listened to and learnt from Prof. Rusi Jal Taraporevala and Mr. Chandrakant Sampat.<br /><br />Q. What’s your opinion of the efficient markets hypothesis and practitioners of technical analysis?<br /><br />A. I believe that the efficient market hypothesis in the various avatars (strong, semi-strong and weak) is not correct. Sometimes prices deviate far away from intrinsic values and it is possible to earn high risk adjusted returns. In fact, the lower the downside risk, the higher can be the upside reward. I do not know anything about technical analysis.<br /><br />Q. Tell us about your approach to fundamental analysis-what is your focus? How do you search for your investment ideas? Where do most of these ideas come from? Describe your evaluation process (both quantitative & qualitative)? How long do you hold on to your positions?<br /><br />A. My firm, Jeetay, principally invests in publicly traded Indian securities and seeks to maximize investors’ capital by buying securities trading at values materially lower than their true business value.<br /><br />Jeetay aims to achieve high absolute rates of return while minimizing risk of capital loss. Jeetay combines the analytical vigor of determining the fair value of a security with a deep understanding of the Indian markets. Jeetay will invest in securities where it can ascertain the reasons for the market’s mispricing and the likelihood of the mispricing being corrected.<br /><br />Jeetay follows the value investment philosophy, which means that the objective is to buy a security trading at a significant discount to its intrinsic value. Since the focus is on discovering undervalued stocks, the fund doesn’t base its investments on macro-economic factors like GDP growth.<br /><br />Jeetay determines intrinsic value as the present value of the future cash flows of a company discounted at a rate that properly reflects the time value of the money and the risks associated with the cash flows. In other cases Jeetay invests in “Special Situations” which involve the following:<br /><br />Repositioning assets to higher uses<br />Mergers and acquisitions / open offers<br />Restructuring troubled companies<br />Spin-offs<br />Buybacks<br />The fund invests in a company if the market price is quoting at a discount of at least 60% to the intrinsic value. It sells when the market value approaches intrinsic value or it finds a security trading at a steeper discount to intrinsic value.<br /><br />Jeetay believes that while in the long term, a company is valued by its fundamentals, short term mispricing occurs due to investor psychology, liquidity and macroeconomic factors. This provides opportunities for the diligent and patient investor to make outstanding risk-adjusted returns.<br /><br />The time horizon of Jeetay is 3-5 years. It believes that short-term market movements can be volatile and the market may recognize mispricing only in the medium to long term. Hence the emphasis is on understanding the corporate strategy and the resultant cash flows for a 3-5 year period. The probability of the markets recognizing the mispricing becomes high over the medium to long-term period.<br /><br />The firm does not limit its investments to certain asset classes or sectors. The fund evaluates any sector or asset class where a conservative estimate of intrinsic value is determinable with a reasonably high probability and invests if the security is available at a reasonable margin of safety.<br /><br />The firm does extensive research to arrive at estimates of expected cash flows, asset values and earnings. Jeetay culls information from public databases, quarterly and annual filings, annual reports, meetings with management, competitors, vendors, customers and other industry participants, industry experts, trade journals and bankers. Jeetay has extensive networks in India to get data and information for superior analysis. Jeetay believes that a disciplined private equity approach to investing that stresses on buying at a discount to intrinsic value will deliver consistent absolute above average investment returns and safeguard capital irrespective of the state of the markets.<br /><br />Jeetay believes that the following steps are essential to its process:<br /><br />1. Opportunity Identification. Jeetay identifies opportunities through a multitude of ways. Jeetay has numerous financial models and screens that are used to filter investment opportunities within the framework of the investment philosophy. Jeetay has many contacts and professional relationships. This gives it many opportunities consistent with the investment philosophy.<br /><br />2. Analysis. Jeetay does intensive financial and qualitative analysis on companies once an opportunity is identified. The analysis is mainly to arrive at whether a disparity exists or not between the traded value of the security and its intrinsic value. Jeetay has substantial experience in determining the intrinsic value of a company across sectors. Multiple valuation metrics including discounted cash flow analysis, price to earnings, dividend discount model, price to sales, price to book, comparative analysis is used to arrive at the valuation of a company.<br /><br />Other than financial analysis, Jeetay extensively meets every possible associate of the company to understand the opportunity better. These include vendors, customers, middle management, bankers, competitors, large stakeholders and senior management. This helps Jeetay arrive at a closer intrinsic value and also exit an investment if unfavourable events arise or the team’s original calculation of intrinsic value was wrong.<br /><br />The analysis would focus on the 3B’s, – Understanding the business, analyzing the balance sheet and looking for bargains.<br /><br />Take each in turn:<br /><br />Business: What is the nature of the business and its competitive strengths and weaknesses? What is the competitive ecological niche that it occupies and how protected are its profits from predators there? What are the nature of the entry barriers or ‘moats’ - intangible assets, switching costs, network effects, cost advantages? How wide and deep are the moats? Does the business cover its cost of capital? A qualitative assessment of the business should be made to understand whether it is a superior or inferior business. Evidence of pricing power or the ability to lower cost of production and distribution should be searched for.<br />Balance Sheet: In order of importance is the balance sheet, the cash flow statement and the profit and loss account.<br />Bargains: One need not to be able to determine value exactly to know whether a stock is cheap or not. As Ben Graham wrote, “To use a homely smile, it is quite possible to decide by inspection that a woman is old enough to vote without knowing her age, or that a man is heavier than he should be without knowing his weight.” A discount to value, a ‘margin of safety’ is paramount, without which an investor is relying on the whims of “Mr. Market” for his investment return.<br />Q. As a follow up question, how do you determine intrinsic value?<br /><br /><br />A. The textbook definition of Intrinsic Value is the present value of the future cash flows discounted at a rate that realistically reflects the time value of money, risk and volatility of the cash flows.<br /><br />The problem is that it is difficult to:<br /><br />1. determine the future free cash flows<br /><br />2. determine the discount rate<br /><br />3. determine the terminal value<br /><br />There are very few companies, i.e. those that are franchises earning well over their cost of capital and growing whose intrinsic value can be calculated using the Dcf approach. Ben Graham’s method of bargain identification is useful in other cases.<br /><br />You don’t have to calculate intrinsic value with precision (especially where it is not possible) to know whether a stock is cheap in seldom to its value or not.<br /><br />Q. Do you invest in foreign companies? If so, do you evaluate foreign companies different than those based in India and how do you hedge currency exposure(s)?<br /><br /><br />A. I have not invested in foreign companies as of yet. Sitting in India, I would have to invest in the large cap stocks in foreign markets, and have not as yet found large caps in USA to be cheap in relation to my investing universe in India. Whilst markets may change, valuation principles are universal-they are the same whether it’s the USA or India.<br /><br />Q. How many stocks do you typically hold in your portfolio?<br /><br />A. In my family portfolio, given the time horizon and tax considerations, there is a heavy concentration on a few stocks that have franchise value and entry barriers. There are smaller positions, but the bulk of the portfolio is in a handful of stocks.<br /><br /><br />In the managed accounts, price in relation to value is of paramount importance and many of the businesses are clearly not franchises. The portfolio thus in the managed accounts tends to be more diversified with roughly around 18-25 positions. Cash is carried at all times in the managed portfolios, the level directly correlated with the valuation of the broad market.<br /><br /><br /><br />Q. Do you invest in any fixed income? If so, tell us about the role of fixed income investments in your portfolio.<br /><br />A. I do not normally invest in fixed income securities. Cash is usually a default position and varies directly with the level of the market. The cash is usually kept in the bank or in money market funds. I do not like to take a credit risk with money that I know will eventually be opportunistically deployed in the stock markets. The key is to be able to sit on your low-yielding cash without losing your patience.<br /><br /><br />Q. . How do you judge a company’s management?<br /><br />A. There are three ways of looking at management:<br /><br /><br />1. their integrity<br /><br />2. their competence – both operational and in capital allocation<br /><br />3. their corporate governance<br /><br />In the end you want to deal with people who do not make your stomach churn. Integrity and competence are both necessary in top management. Finally there is the factor of the passion to improve the game by never becoming complacent.<br /><br />Sometimes a good price can cover a multitude of sins, including poor management. But if I had to hold a non-franchise investment for any length of time, management would certainly be an important factor. In many cases, it is the jockey, not the horse that one should bet on.<br /><br />Q. What makes you sell an investment?<br /><br />A. I sell when:<br /><br />My original thesis was wrong<br />Price is reached<br />A better option comes along<br />Ben Graham’s criteria should be kept in mind. Switch for:<br /><br />1. Increased security<br /><br />2. Larger yield<br /><br />3. Greater chance for profit<br /><br />4. Better marketability<br /><br />Q. How do you look at risk?<br /><br />A. Risk is very subjective. Academic theory has one definition of risk namely standard deviation which is wrong. Actually, if one had to use statistical distributions to measure risk, then there are three dimensions, Variance, Skewness & Kurtosis.<br /><br />I do not think however that risk can only be captured by statistical measures. To me, risk is simply the chance of permanent loss of capital and an investors’ job is to eliminate that risk. He may not be able to do so for individual securities, even with a margin of safety, but he has to do it in a portfolio context.<br /><br />Q. What’s your take on leverage?<br /><br />A. Leverage is one of the two things that can cause a permanent loss of capital to a value investor. Avoid it, unless you are willing to take a risk of a permanent loss to your capital. The other thing that can cause a permanent loss of capital is holding on to overvalued stocks, but I assume that a value investor would not do that.<br /><br />I always carry cash for optionality, rather than borrow against my holdings should the opportunity arise.<br /><br /><br />Q. Do you invest in commodities, gold, real estate, etc? If so what has been your experience with these classes?<br /><br />A. I have legacy investments in real estate. I view it as an inflation hedge and a different asset class in the portfolio.<br /><br />Currently I have investments in gold as a hedge against a highly likely decline in the value of the dollar and a meltdown in financial assets. The economic problems in US are severe and the wrong treatment is being given. When fiscal and monetary insanity prevails, gold always reigns supreme. I’m not making a directional bet on gold prices – it is only a hedge against my financial investments.<br /><br />Q. Tell us a little more about your involvement with special situations?<br /><br />A. It depends on the definition of “special situations”. If special situations means a value stock with identifiable catalysts like change in management, operational and financing restructuring, buybacks, mergers and acquisitions etc, then we certainly do invest in special situations. We have investments in spin offs and in open offers as a result of takeovers.<br /><br /><br />Q. Have you ever taken the role as an activist investor, would you ever do so?<br /><br />A. I’ve never wanted to take a confrontational attitude with management although sometimes I’m forced to. If I’m not happy with their policies, I sell - but my aim is to influence management through logic and rationality, not through financial blackmail.<br /><br />There is a grey area however. I’ve been connected with the press through my columns in various newspapers and magazines and I’ve written about instances of corporate misgovernance there. But I’ve never threatened management.<br /><br />I do not have the temperament to fight management or for that matter, anybody. I believe in exiting relationships where there is no mutual respect, rather than slugging it out for dominance.<br /><br /><br />Q. We understand that you are very focused on bottom up value investing-what has the financial crisis taught you?<br /><br />A. I wrote this piece awhile ago and it would be related to the question above.<br /><br />It may be interesting to use a cross-disciplinary approach to the problems and mistakes made by banks in the sub-prime market.<br /><br />The power of rewards that leads to repeated actions and the flawed compensation structure that led to misaligned incentives could be one mental model. As Raghuram Rajan pointed out in Financial Times (Jan 9, 2008), the compensation practices in the financial sector are deeply flawed. The compensation is based on the so-called ‘alpha’ that a manager of financial asset generates. There are three sources of ‘alpha’:<br /><br />1) Truly special abilities in identifying undervalued assets (eg. Warren Buffett)<br /><br />2) Activism – using financial resources to create, or obtain control over, real assets and to use the control to change the payout obtained on the financial investment.<br /><br />3) Financial engineering – financial innovation or creating securities that appeal to particular investors.<br /><br />Many managers create ‘fake alpha’ i.e. they appear to create excess returns but are taking on ‘tail’ risks which produce a steady return most of the time as compensation for the very rare, very negative returns (‘black swans’). The AAA rated CDOs generated higher returns than similar AAA rated bonds. The ‘tail risk’, so evident in hindsight, of the CDO defaulting was not as small as perceived and so the excess return was compensation for that.<br /><br />The credit rating agencies that rated these securities as AAA because of their ‘insured’ status were themselves wrongly incentivized (compensated by the issuers of the securities). Furthermore once their peers started issuing AAA ratings, ‘social proof’ came into play and the ratings war as to who assigned the highest ratings for junk became a classic Prisoners’ Dilemma..<br /><br />This is proving to be a game of chicken between the regulators and the players (banks and monoline insurers). In a classic game of chicken, two cars drive towards each other. The first driver who turns loses. Of course, if neither car swerves then there is a crash. The best outcome for each player results when he goes straight whilst his opponent turns. Insane players have a massive edge in a game of chicken. At this point of time, the jury is out given the level of insanity in the system.<br /><br /><br />Q. How have you evolved as an investor?<br /><br />A. I guess the process of evolution is never over. I started out knowing nothing but efficient markets and so the leap to value investing was a big one. I know I’ll never leap out of value investing, but the nuances may undergo changes, as also my ability to widen and deepen my circle of competence.<br /><br /><br />Q. What is the most interesting part of your job?<br /><br />A. It is searching for investment ideas, working out the odds and reading from a wide variety of sources.<br /><br /><br /><br />Q. Which books would you recommend?<br /><br />A. Here are a few, but they are by no means exhaustive.<br /><br />Everything by Jared Diamond<br />Everything by Garett Hardin<br />“The Road to Serfdom” - Friedrich Hayek<br />“The Prophet of Innovation”<br />“More than your know” - Michael Mauboussin<br />“The Robot’s Rebellion”<br />“The mind of the market” - Michael Shermer<br />Try to read all of Mr. Munger’s book recommendations and also the books in Mr. Peter Bevelin’s Bibliography in “Seeking Wisdom: From Darwin to Munger”. I do not think that I’ll be able to read all the books that have been recommended in my life time but I’m going to give it a shot.<br /><br />Q. What is the biggest mistake keeping investors from reaching their goals? How have you guarded yourself against this folly?<br /><br />A. Greed, fear, sloth and envy are the four emotions that are positively inimical to becoming a better investor.<br /><br /><br />Meditation, detachment from results, but attachment to efforts, yoga, discipline in living and thinking are some of the ways for self-improvement in investing.<br /><br />One must also have an open mind to new ideas and try to become in the words of Mr. Munger “a learning machine.”<br /><br />Q. What should investors understand before investing in India?<br /><br />A. Indian markets are very volatile, so be very careful on entry prices. “Growth” is a seductive term and stories woven about growth even more seductive, but be very careful of paying too much for it. Homework matters. Liquidity can dry up, so be clear whether you can live with relatively illiquid positions.<br /><br />Closing Questions<br /><br /><br />Q. If you could do anything besides allocating capital what would you do?<br /><br /><br />A. I would teach and write more often than I do.<br /><br /><br />Q. What message/advice would you give to readers of SimoleonSense?<br /><br /><br />A. Read a lot, be disciplined, be humble about your knowledge and stay within your circle of competence.<br /><br /><br />Q. What does the future hold for you, your funds, and website? Are you going to do this forever?<br /><br /><br />A. As long as I can, mentally and physically.<br /><br /><br /><br />Miguel Barbosa: Mr. Parikh thank you for taking the time to interview with us.Dance With Mehttp://www.blogger.com/profile/11452760400913968147noreply@blogger.com10tag:blogger.com,1999:blog-3761262596373585191.post-24682896069148441952011-02-04T04:12:00.000-08:002011-02-04T04:15:48.882-08:00Walter Schloss’ Presentation at The Benjamin Graham Center for Value InvestingWalter Schloss’ Presentation at The Benjamin Graham Center for Value Investing<br />July 25th, 2010 · 1 Comment · Uncategorized<br />http://www.schloss-value-investing.com/2010/07/walter-schloss-presentation-at-the-benjamin-graham-center-for-value-investing/#more-70<br /><br />Walter Schloss conducted a recorded video / audio presentation at the Richard Ivey School of Business’ Benjamin Graham Center for Value Investing. If you would like to see the audio / video, we have it on our value investing resource page. In this post, I am going to take notes on Schloss’ speech and add some commentary later in the week. Enjoy.<br /><br />Started fund in 1955 when Graham said he was going to retire<br />Schloss was left handed (I never knew that)<br />Started out with 19 partners, each with approximately $5,000<br />Stayed in field until 2001 (or 2003…couldn’t recall). Son couldn’t find any good value stocks.<br />Started work when his father lost his job – the family had no money. Started off making $15/week. Wanted in the research department. Was denied. Was told to read “Security Analysis”<br />Question: How do you choose stocks? Answer: Stocks that are hitting new lows. Schloss fines Value Line very helpful. He doesn’t have a computer and likes to look at the numbers. He doesn’t talk to management teams.<br />Went to work for Graham in the beginning of 1946<br />Question: What process did you follow to minimize mistakes? Answer: I don’t like to lose money and therefore buy stocks that are protected on the downside and then the upside takes care of itself. Look for companies that do not have a lot of debt. By looking at the proxy statement and annual reports, can get a sense of how much stock the directors own, who owns a fair amount of stock, and the history of the company.<br />Look at companies selling at new lows. It means the company has problems. Debt exacerbates these problems.<br />Love companies with simple capital structures. Not a lot of debt. The company has to have history. Management needs to own stock.<br />Schloss admits he was never good at evaluating management character. Therefore he stuck to the numbers.<br />Value Line is helpful because you get a good sense of history on the company because they have 10-15 years of performance data.<br />Question: If stock falls, what do you do? Answer: If I like a company, I’ll buy more on the way down. Stock brokers do not like recommending stocks that are going down. The stockbrokers don’t want to look like fools. People get nervous when stocks go lower.<br />Likes to try to get 50% profit. Only long-term profits (don’t want to pay short term taxes)<br />Admits that he makes mistakes in sales. He will buy at $30, sell at $50, and see it go to $200<br />Likes stocks selling below book value. Reiterates how much he hates debt.<br />Read annual report. Figure out why the company is having problems.<br />If you get a stock selling significantly below book value, has a good history over 20 years, and little debt with lots of management holdings, probably a good purchase.<br />Margin of Safety to Schloss is if the company’s book value is substantially higher than the market price. Companies get bought out that are trading at significant discounts to book.<br />Question: Emotional mistakes? How do you control? Answer: Schloss does not get emotional about stocks. One reason he doesn’t talk to management teams is because management presents the company the way you want to see them. Schloss is not a good judge of people. Warren Buffett is. Schloss says you have to look at situations logically, not the way you WANT to look at it.<br />He wants to buy things the way there are, not the way they may be in the future. He wouldn’t buy a company with a prospect of an electric car just because of that prospect.<br />Seems to me that he uses Good to Cancel Orders<br />Question: Outstanding company at a fair price or a fair company at an outstanding price? Answer: He doesn’t want to buy good companies at what they are worth – he wants to buy these companies at a discount. Sometimes people get VERY nervous and bargains arise, but that is not too often. You want to buy stocks that you can make 50% over a couple of years.<br />He doesn’t like to lose money. So he buys companies that are having problems. He likes companies with no debt.<br />Quite often the stock market reacts emotionally. Bad news causes troubles. If you are managing money for other people you should not tell your limited partners what you own – Why? Don’t want competition. Don’t want to deal with investors emotions and don’t want to hear their complaints. If LPs are worried, don’t take them as investors.<br />Question: Three traits to be a successful value investor? Answer: Be calm and not to be emotional. Be intellectual and look at the facts. Never get emotionally involved in a stock.<br />Distinguish between temporary and permanent problems.<br />He likes companies to be a success. If you sell early, and the stock triples, who cares? Move on.<br />Question: Is the upcoming recession worse than previous ones? Answer: Schloss tries to stay away from what is going on in the overall economy. He has no idea what is going on in the economy. He buys stocks on what they are worth – and not what is going on in the macro economy.<br />Stop worrying about what is going on in the overall economy or where the market is going – buy cheap stocks – if you go into a recession, you’ll have to wait longer to make your money. Just buy cheap stocks.<br />Graham liked to compare stocks that started with the same letter of the alphabet. Intellectual exercise. Compared the stocks.<br />Compare stocks in the same field. Two liquor companies for instance. What are their trading levels?<br />Question: Has market become more efficient? Answer: As an analyst, your job is to determine why one stock is selling lower than another. If an industry is having a problem, take a look. A lot more competition but that being said, “value analysts” are still not happy buying stocks that are going down.<br />Harder to determine when to sell versus when to buy.<br />Question: Personal view on diversification? Answer: Stay away from industries that are outside of your circle of competence. More comfortable with very old industries. More comfortable in stocks than bonds because inflation eats up return. Very few people become millionaires buying bonds. Bonds are for old people.<br />Seems to me this guy is incredibly humble. Jives with what I have read in the past.<br />Question: Raising capital in the 50s as a young fund manager? Answer: Not an aggressive man in going around to raise capital. Get your feet wet with family money. Very difficult to start a fund. You don’t want to lose money. If you like math, if you like investing, you can do it as long as you control your emotions.<br />Question: Biggest mistake? Answer: ”I forget my mistakes.” Awesome. Schloss didn’t lose money often. Never put a great amount of money in any one stock. Held over 100 stocks at any one time.<br />Compared value of a company versus its working capital…i.e the company was trading at 2 dollars a share but had 7 dollars of working capital per share.<br />Didn’t like getting involved in legal actions<br />Never focused on mistakes – including selling too early<br />Question: China? Answer: Schloss does not buy foreign companies. It is not easy to judge foreign companies. Insiders have too much advantage overseas.<br />Question: When to sell / mechanics of sales? “I don’t know when to sell” Schloss will sell at 100% profit. At Graham Newman will scale their sales. Will usually hold stocks for 3 years. Schloss likes profit, but he has no formula for when to sell.<br />If a stock gets high enough, it becomes a lot more vulnerable.<br />Schloss quotes from Ben Graham from the 3rd edition of Security Analysis: McDonald’s was selling at $14, down from $35. Graham’s arbitrage formula for return per year.<br />Question: Max you would allocate to a stock in a portfolio? If you really like, individually, you might put 20% in one stock for yourself. In a partnership, you may put only 10% in.<br />Shorted stocks in the tech bubble. Historically never did it before. It made him feel uncomfortable.<br />Question: Research – just Value Line and Annual? Answer: Less than book value, not much debt. Then you look at company itself – company might suck, but it may have a lot of book value.<br />Question: How do you become comfortable with an industry? He likes simple manufacturing companies. Companies might have lots of growth, but stockholders might do poorly. Simply capitalized companies. Look at the last 20 years. And then get an annual report.<br />Buys stocks where the outlook is not good.<br />Value Line: Look where stock was ten years ago.<br />The point is: You do not want to lose money. Buy stocks that are depressed, that aren’t going broke.<br />Warren Buffett – very brilliant guy – but some people were reluctant to invest because there was no income.<br />Question: What is the most important thing in investing and in life that you have learned in the past 50 or so years? Answer: Honesty is the best thing you could have.<br />Stay tuned over the next week as we analyze this Walter Schloss’ speech on value investing.<br /><br />----------------------------<br />Value Investing Resources<br />http://www.schloss-value-investing.com/value-investing-resources/<br /><br />Here I am in the process of compiling literally everything I can find on the web as it relates to Walter Schloss, Irving Kahn, and other members of the Graham – Newman Partnership. This list will continually be updated as I stumble upon more items – that being said, if you have something to share, please shoot me an email at hunter [at] distressed-debt-investing.com<br /><br />Walter Schloss Resources<br /><br />Schloss honoring Janet Lowe<br /><br />Profiles in Investing Walter and Edwin Schloss<br /><br />Schloss on Graham from Lowe’s Biography<br /><br />Walter Schloss on Liquidations<br /><br />Walter Schloss List of Stocks<br /><br />In Defense of Stock Dividends<br /><br />Intrinsic Value is Key Factor<br /><br />Walter J. Schloss_Searching for Value<br /><br />Schloss Seminar at CBS ’93<br /><br />The Over-Valuation of Some Blue Chip Stocks<br /><br />Profiles in Investing Walter and Edwin Schloss<br /><br />Who is Walter Schloss – Barrons Article<br /><br />The Hippocratic Method in Security Analysis<br /><br />Making Money Out of Junk<br /><br />Walter J. Schloss: Searching for Value<br /><br />Factors needed to make money in the stock market<br /><br />Walter Schloss on Liquidations<br /><br />Schloss at Grant’s Interest Rate Observer Conference<br /><br />Schloss: “Why We Invest the Way We Do”<br /><br />Why Schloss is Such a Great Investor<br /><br />Schloss on the DJIA<br /><br />Walter Schloss: 1985 Barrons Article<br /><br />Benjamin Graham and Security Analysis: A Reminiscence<br />------------------------<br /><br />Walter Schloss and Value Investing – Barron’s Article from 1985<br />August 23rd, 2010 · No Comments · Uncategorized<br /><br />One of the reasons I started a value investing blog on Walter Schloss, Irving Kahn, early Warren Buffett and other members of the Graham-Newman Corporation was my fascination on how rare their early investment style is still applied today. I think we can all agree that finding 2/3 net/nets as Ben Graham prescribed is difficult. That being said, far too often we hear about GARP or EV/EBITDA versus as asset based approach so effectively employed by Walter Schloss.<br /><br />In 1985, Barron’s ran a story entitled “The Right Stuff: Why Walter Schloss is Such a Great Investor.” You can find a link to the piece in our value investing resources page. In this post, like one of our earlier Walter Schloss posts on the blog, I will be using bullet points to document my notes.<br /><br />Interesting point about how Barron’s had not heard of Walter Schloss until Warren Buffett blew his cover in the ever famous “The Superinvestors of Graham-And-Doddsville”<br />Walter recounts how he got into the business. It is interesting to note that in this interview, he says “Graham was writing his book on the stock market, and I remember helping him with one chapter.” I never knew that part of the story – this is all before Schloss had enlisted.<br />Very heartily recommends The Intelligent Investor<br />Compares Ben Graham to an undervalued security: “It’s a funny thing about Graham. I think he was like an undervalued security, if you want to know. People said, ‘Oh, Ben Graham, he’s very smart.’ But then they’d go off and do their own little thing with computers, or whatever the popular thing was at the moment. They kind of forgot. They’d say ‘Oh, we like undervalued stocks,’ but then they wouldn’t buy them.” He then goes on to point out that Graham’s ideas made perfect sense to him.<br />Ben Graham’s philosophy on buying a diversified pool of stocks stems from the pain he experienced during the Great Depression.<br />At Graham Newman they followed “the idea of buying companies selling below working capital – at two thirds of working capital – then, when the stocks’ prices went up to match working capital per share, we’d have made 50% on our money. And the firm averaged about 20% a year on that basis.” Schloss, like I noted above, then goes on to note that during the fifties, those stocks started disappearing.<br />Why did these stocks trade at these levels previously? “They were mostly secondary companies; they were never the top grade companies. And they tended to be ignored by the public because they didn’t have any sex appeal, there wasn’t any growth – there was always trouble with them. You were buying trouble when you bought these companies, but you were buying them cheap. Of course, when you got them too cheap, they maybe ended up going down the tubes. So you try to be a little careful. But people don’t like to buy things that are going down.”<br />Philosophy: “Graham liked the idea of protection on the downside and basically, that’s what I do. I try not to lose money.”<br />When asked what he think the market will do, his response: “I’ve got no idea; your guess is as good as mine.”<br />Schloss on timing: “Timing is a very – everybody tries to do it, so I stay away from the game that everyone’s trying to do. If you buy value – and you may buy it too soon, as undoubtedly I do – then if it goes lower; you buy more. You have to have confidence in what you are doing.”<br />Again using five years as a yardstick. But notes their average holding period is 4 years.<br />Liked to stay under the radar.<br />On his investing style: “I am a passive investor. There are people who try to be very aggressive; they try to buy companies [Editor Note: Remember this is during the LBO Boom of the mid to late 80s]. We just buy the stock, and if it goes to what we think is a reasonable price, we sell it and move on to something else. Graham made the point in his book where he said, ‘You buy stocks like you buy groceries, not like you buy perfume.’ You’re looking for value.”<br />No ticker tape machine in his office – he tries to stay away from the emotions of the market. The market appeals to fear and greed – He doesn’t want to be a part of that.<br />Blames Warren Buffett for the uprise in value investing and how hard it is to buy cheap stocks.<br />Gives an anecdote about a stock that Schloss purchased for the fund and then the company was bought out shortly thereafter: “But the point is, if it hadn’t worked out that way, Stauffer was a really good company, and in a few years it would have worked out satisfactory. It happened to work out quicker, that’ all.”<br />Doesn’t like short term gains.<br />On the insert lists the rationale’s for a number of his stock picks:<br />“The downside is limited…so you buy it”<br />It isn’t exactly cheap. But it’s a good value.”<br />“Basically a good company and there will be another deal”<br />“It does have problems. I can’t say that enough.”<br />“The timber is worth a lot more than the market price.”<br />“You couldn’t replace it for what it sells for.” (On Texaco)<br />“A good value stock. They had a terrible break.”<br />“There’s no particular point selling it. I have a big profit.”<br />“It’s got a lot of cash flow”<br />Note that he was managing $45M in 1987<br />Notes that Graham returned a substantial amount of his limited partners capital when he couldn’t find cheap stocks in 53′.<br />On portfolio management: “The thing is, we don’t put the same amount in each stock. If you like something like Northwest Industries, you put a lot of money in it. But we may buy a little bit of stock, to get our feet wet, and get a feeling for it. Sometimes if you don’t own a stock, you don’t pay enough attention. Then also, we sell stock on scale. Sometimes we sell some, and then stock poops out on us, and then we’re stuck.”<br />Continuing: “Sometimes we get into situations where we really don’t sell at all. So we have more securities than I’d like to have, and yet, I feel comfortable owning them. Then, of course, you get a situation where you buy the stock, and it seems a good value, and it goes up a fair amount, and you like it better. You become a little more attached to it, and then you see some pluses that you may not have realized before.”<br />The quote above confuses me: Does he mean you like the stock because it has gone up or because you’ve done more work on it and got lucky with the price action?<br />Adjusted Working Capital = Current Assets – Current Liabilities – Debt<br />Again notes about management holding stock – seems to be very import to Walter Schloss<br />Talk about analyzing the balance sheet: “And of course a lot of companies have lots of assets tied up in plant and equipment. Well is it an old plant, or is it a new plant?<br />“You don’t have to just look at book value. You can look at what you think companies are worth, if sold. Are you getting a fair stake for your money?”<br />Talks about a “good company” and dubs it a “not a book value stock.” (For reference, the company was selling at 10x earnings, 5.5% dividend yield, 1.5x book, 15% ROE)<br />Here is a very interesting quote (probably my favorite in this article): When asked why “park money” in a stock: “If the market was very low, I’d say ‘Well, CPC probably isn’t a great stock to own. If the market is so cheap, you want something with a little more zip in it, or potential.’ In a market like ours, which is not very cheap – I wouldn’t say its way overpriced, because it isn’t; it’s in a more reasonable area-there’s more risk on the downside. CPC probably doesn’t have that much downside risk, and therefore I feel comfortable with it. If the market should collapse, we, then maybe we’d sell it, assuming we’d be getting that price, and buy something that’d gone down a lot.”<br />Notes how he doesn’t get involved in looking at earnings potential.<br />Why difficult to sell? Upward price movements feed on themselves …<br />On holding cash: “We’ve never really done that. We’ve always been fully invested. Which may be good, and may not be good – it’s psychological. I find I’m more comfortable being fully invested than I am sitting with cash.” …very different from a number of Value Investing Legends…<br />Note he doesn’t play in options, doesn’t write covered calls, doesn’t short stocks<br />Noted that Graham thought when there were no working capital stocks, the market was overvalued…Schloss does not that theory does not really apply anymore.<br />Schloss on the market: “I simply say, if there are not too many value stocks that I can find, the market isn’t all that cheap.”<br />Simply incredible. Stay tuned later in the week when we explore more value investing articles on Walter Schloss and start digging into some securities.<br />---------------------------------------<br />Investment Nuggets<br /> <br />WALTER SCHLOSS<br />Walter Schloss is considered one of the investment greats, a value investor in the same league as the Oracle of Omaha, Warren Buffet. Like Buffett, Walter Schloss was also trained under the legendary Benjamin Graham. For a brief while in the 1950s, Schloss and Buffet even shared the same office.<br /><br />For sheer uninterrupted performance record, few investors can match Walter Schloss. For 45 years from 1955 to 2000, he managed the investment partnership, Walter J. Schloss Associates and delivered an astounding compound annual return of more than 15 per cent per year compared to a gain of S&P 500 of just over 10 per cent.<br /><br />And this is what Buffet had to say about Walter Schloss: "He knows how to identify securities that sell at considerably less than their value to a private owner: And that's all he does. He owns many more stocks that I do and is far less interested in the underlying nature of the business; I don't seem to have very much influence on Walter. That is one of his strengths; no one has much influence on him."<br /><br />"One of the things we've done is hold over a hundred companies in our portfolio. Now Warren (Buffet) has said to me that, that is a defence against stupidity. And my argument was, and I made it to Warren, we can't project the earnings of these companies, they are secondary companies, but somewhere along the line some of them will work. Now I cannot tell you which ones, so I buy a hundred of them. Of course, it does not mean you own the same amount of each stock."<br /><br />"I'm not very good at judging people. So I found that it was much better to look at figures rather than people. I didn't go to many meetings unless they were relatively nearby. I like the idea of company-paid dividends, because I think it makes management a little more aware of stockholders, but we did not really talk about it, because we were small. I think if you were big, if you were a Fidelity, you wanted to go out and talk to management. They would listen to you. I think it is really easy to use numbers when you're small."<br /><br />"Timidity prompted by past failures causes investors to miss the most important bull markets."<br /><br />"We did not get involved in many companies that turned crooked. I know there were a few people that had poor reputations and their stocks were low, and when we did buy some of those we were sorry afterwards because they figured out a way of taking advantage of you, and you were always worried that they'd do something that didn't like."<br /><br />"When companies have problems they often like to have their annual meetings in cities and states where there are not too many stockholders."<br /><br />-------------------------------Dance With Mehttp://www.blogger.com/profile/11452760400913968147noreply@blogger.com16tag:blogger.com,1999:blog-3761262596373585191.post-8147093382766390492011-01-30T07:45:00.000-08:002011-01-30T07:46:57.773-08:00Lou Simpson on investingLou Simpson, has long managed the investment $4 billion portfolio of GEICO, the insurance company Berkshire Hathaway owns. He is also the only man other than Warren Buffett who has managed stock investments in Berkshire’s portfolio. Like Warren Buffett, he has a general distaste for technology stocks. He favors intensive research to find attractive companies to invest in and a willingness to bet on just a handful of stocks. In 2004, the only time that Berkshire ever stated Geico’s performance separately, Mr. Simpson over 24 years had posted a 20 percent average annual gain, surpassing the Standard & Poor’s 500-stock index by 6.8 percentage points. Mr. Simpson is known for eschewing publicity so it is a unique opportunity to learn more about him. <br /><br />On many occasions when the media announces that Berkshire Hathaway has taken a sizable stake in a publicly-traded business, it is actually a position initiated by Mr. Simpson for the GEICO portfolio. You can learn a lot by reading about one of his rare interviews, given in 1987 with the Washington Post. Lou Simpson said:<br /><br />Think independently - We try to be skeptical of conventional wisdom, he says, and try to avoid the waves of irrational behavior and emotion that periodically engulf Wall Street. We don’t ignore unpopular companies. On the contrary, such situations often present the greatest opportunities.<br /><br />Invest in high-return businesses that are run for the shareholders - Over the long run, he explains, appreciation in share prices is most directly related to the return the company earns on its shareholders’ investment. Cash Flow, which is more difficult to manipulate than reported earnings, is a useful additional yardstick. We ask the following questions in evaluating management: Does management have a substantial stake in the stock of the company? Is management straightforward in dealings with the owners? Is management willing to divest unprofitable operations? Does management use excess cash to repurchase shares? The last may be the most important. Managers who run a profitable business often use excess cash to expand into less profitable endeavors. Repurchase of shares is in many cases a much more advantageous use of surplus resources.<br /><br />Pay only a reasonable price, even for an excellent business - We try to be disciplined in the price we pay for ownership even in a demonstrably superior business. Even the world’s greatest business is not a good investment, he concludes, if the price is too high. The ratio of price to earnings and its inverse, the earnings yield, are useful gauges in valuing a company, as is the ratio of price to free cash flow. A helpful comparison is the earnings yield of a company versus the return on a risk-free long-term United States Government obligation.<br /><br />Invest for the long term - Attempting to guess short-term swings in individual stocks, the stock market, or the economy, he argues, is not likely to produce consistently good results. Short-term developments are too unpredictable. On the other hand, shares of quality companies run for the shareholders stand an excellent chance of providing above-average returns to investors over the long term. Furthermore, moving in and out of stocks frequently has two major disadvantages that will substantially diminish results: transaction costs and taxes. Capital will grow more rapidly if earnings compound with as few interruptions for commissions and tax bites as possible.<br /><br />Do not diversify excessively - An investor is not likely to obtain superior results by buying a broad cross-section of the market, he believes. The more diversification, the more performance is likely to be average, at best. We concentrate our holdings in a few companies that meet our investment criteria. Good investment ideas--that is, companies that meet our criteria--are difficult to find. When we think we have found one, we make a large commitment. The five largest holdings at GEICO account for more than 50 percent of the stock portfolio.Dance With Mehttp://www.blogger.com/profile/11452760400913968147noreply@blogger.com0tag:blogger.com,1999:blog-3761262596373585191.post-89296156795551244962011-01-30T07:44:00.000-08:002011-01-30T07:45:14.346-08:0016 golden rules from Walter ScholosHere are 16 golden rules for investing from Walter Scholoss. This came from a 1994 lecture he gave. Thanks to Todd Sullivan for the finding:<br /><br /><br />1. Price is the most important factor to use in relation to value <br /><br />2. Try to establish the value of the company. Remember that a share of stock represents a part of a business and is not just a piece of paper. <br /><br />3. Use book value as a starting point to try and establish the value of the enterprise. Be sure that debt does not equal 100% of the equity. (Capital and surplus for the common stock). <br /><br />4. Have patience. Stocks don’t go up immediately. <br /><br />5. Don’t buy on tips or for a quick move. Let the professionals do that, if they can. Don’t sell on bad news. <br /><br />6. Don’t be afraid to be a loner but be sure that you are correct in your judgment. You can’t be 100% certain but try to look for the weaknesses in your thinking. Buy on a scale down and sell on a scale up. <br /><br />7. Have the courage of your convictions once you have made a decision. <br /><br />8. Have a philosophy of investment and try to follow it. The above is a way that I’ve found successful. <br /><br />9. Don’t be in too much of a hurry to see. If the stock reaches a price that you think is a fair one, then you can sell but often because a stock goes up say 50%, people say sell it and button up your profit. Before selling try to reevaluate the company again and see where the stock sells in relation to its book value. Be aware of the level of the stock market. Are yields low and P-E rations high. If the stock market historically high. Are people very optimistic etc? <br /><br />10. When buying a stock, I find it heldful to buy near the low of the past few years. A stock may go as high as 125 and then decline to 60 and you think it attractive. 3 yeas before the stock sold at 20 which shows that there is some vulnerability in it. <br /><br />11. Try to buy assets at a discount than to buy earnings. Earning can change dramatically in a short time. Usually assets change slowly. One has to know much more about a company if one buys earnings. <br /><br />12. Listen to suggestions from people you respect. This doesn’t mean you have to accept them. Remember it’s your money and generally it is harder to keep money than to make it. Once you lose a lot of money, it is hard to make it back. <br /><br />13. Try not to let your emotions affect your judgment. Fear and greed are probably the worst emotions to have inconnection with purchase and sale of stocks. <br /><br />14. Remember the work compounding. For example, if you can make 12% a year and reinvest the money back, you will double your money in 6 yrs, taxes excluded. Remember the rule of 72. Your rate of return into 72 will tell you the number of years to double your money. <br /><br />15. Prefer stock over bonds. Bonds will limit your gains and inflation will reduce your purchasing power. <br /><br />16. Be careful of leverage. It can go against you.Dance With Mehttp://www.blogger.com/profile/11452760400913968147noreply@blogger.com0tag:blogger.com,1999:blog-3761262596373585191.post-80601899778857869772011-01-30T06:40:00.000-08:002011-01-30T07:57:12.494-08:00Walter Schloss - buy less than book value, no debtExperience<br />http://www.forbes.com/forbes/2008/0211/048_print.html<br /><br />Bernard Condon 02.11.08, 12:00 AM ET<br />At 91, the man Warren Buffett famously dubbed a "superinvestor" is still picking unloved stocks.<br /><br />Walter Schloss has lived through 17 recessions, starting with one when Woodrow Wilson was President. This old-school value investor has made money through many of them. What's ahead for the economy? He doesn't worry about it.<br /><br />A onetime employee of the grand panjandrum of value, Benjamin Graham, and a man his pal Warren Buffett calls a "superinvestor," Schloss at 91 would rather talk about individual bargains he has spotted. Like the struggling car-wheel maker or the moneylosing furniture supplier.<br /><br />Bushy-eyebrowed and avuncular, Schloss has a laid-back approach that fast-money traders couldn't comprehend. He has never owned a computer and gets his prices from the morning newspaper. A lot of his financial data come from company reports delivered to him by mail, or from hand-me-down copies of Value Line, the stock information service.<br /><br />He loves the game. Although he stopped running others' money in 2003--by his account, he averaged a 16% total return after fees during five decades as a stand-alone investment manager, versus 10% for the S&P 500--Schloss today oversees his own multimillion-dollar portfolio with the zeal of a guy a third his age. In a day of computer models that purport to quantify that hideous and mysterious force called risk, listening to Schloss talk of his simple, homespun investing methods is a tonic.<br /><br />"Well, look at that," he says brightly, while scanning the paper. "A list of worst- performing stocks."<br /><br />During his time as a solo manager after leaving Graham's shop, he was a de facto hedge fund. He charged no management fee but took 25% of profits. He ran his business with no research assistants, not even a secretary. He and his son, Edwin (who joined him in 1973), worked in a single room, poring over Value Line charts and tables.<br /><br />In a famous 1984 speech titled the "The Superinvestor of Graham-and-Doddsville," Buffett said Schloss was a flesh-and-blood refutation of the Efficient Market Theory. This hypothesis holds that no stock bargains exist, or at least ones mere mortals can pick out consistently. Asked whether he considers himself a superinvestor, Schloss demurs: "Well, I don't like to lose money."<br /><br />He has a Depression-era thriftiness that benefited clients well. His wife, Anna, jokes that he trails her around their home turning off lights to save money. If prodded, he'll detail for visitors his technique for removing uncanceled stamps from envelopes. Those beloved Value Line sheets are from his son, 58, who has a subscription. "Why should I pay?" Schloss says.<br /><br />Featured in Adam Smith's classic book Supermoney (1972), Schloss amazed the author by touting "cigar butt" stocks like Jeddo Highland Coal and New York Trap Rock. Schloss, as quoted by Smith, was the soul of self-effacement, saying, "I'm not very bright." He didn't go to college and started out as a Wall Street runner in the 1930s. Today he sits in his Manhattan apartment minding his own capital and enjoying simple pleasures. "Look at that hawk!" he erupts at the sight of one winging over Central Park.<br /><br />One company he's keen on now shows the Schloss method. That's the wheelmaker. Superior Industries International gets three-quarters of sales from ailing General Motors and Ford. Earnings have been falling for five years. Schloss picks up a Value Line booklet from his living room table and runs his index finger across a line of numbers, spitting out the ones he likes: stock trading at 80% of book value, a 3% dividend yield, no debt. "Most people say, 'What is it going to earn next year?' I focus on assets. If you don't have a lot of debt, it's worth something."<br /><br /><br />Schloss screens for companies ideally trading at discounts to book value, with no or low debt, and managements that own enough company stock to make them want to do the right thing by shareholders. If he likes what he sees, he buys a little and calls the company for financial statements and proxies. He reads these documents, paying special attention to footnotes. One question he tries to answer from the numbers: Is management honest (meaning not overly greedy)? That matters to him more than smarts. The folks running Hollinger International were smart but greedy--not good for investors.<br /><br />Schloss doesn't profess to understand a company's operations intimately and almost never talks to management. He doesn't think much about timing--am I buying at the low? selling at the high?--or momentum. He doesn't think about the economy. Typical work hours when he was running his fund: 9:30 a.m. to 4:30 p.m., only a half hour after the New York Stock Exchange's closing bell.<br /><br />Schloss owns a prized 1934 edition of Graham's Security Analysis he still thumbs through. Its binding is held together by three strips of Scotch tape. In the small room he invests from now, across the hall from his apartment, one wall contains a half-dozen gag pictures of Buffett (the Omaha sage with buxom cheerleaders or with a towering stack of Berkshire Hathaway tax returns). Each has a joke scribbled at the bottom and a salutation using Schloss' nickname from the old days, Big Walt.<br /><br />Schloss first met that more famous value hunter at the annual meeting of wholesaler Marshall Wells. The future billionaire was drawn there for the reason Schloss had come: The stock was trading at a discount to net working capital (cash, inventory and receivables minus current liabilities). That number was a favorite measure of value at Graham-Newman, the investment firm Schloss joined after serving in World War II. Buffett came to the firm after the Marshall Wells meeting, sharing an office with Schloss at New York City's Chanin Building on East 42nd Street.<br /><br />Schloss left the Graham firm in 1955 and with $100,000 from 19 investors began buying "working capital stocks" on his own, like mattressmaker Burton-Dixie and liquor wholesaler Schenley Industries. Success drew in investors, eventually rising to 92. But Schloss never marketed his fund or opened a second one, and he kept money he had to invest to a manageable size by handing his investors all realized gains at year-end, unless they told him to reinvest.<br /><br />In 1960 the S&P was up half a percentage point, with dividends. Schloss returned 7% after fees. One winner: Fownes Brothers & Co., a glovemaker picked up for $2, nicely below working capital per share, and sold at $15. In the 1980s and 1990s he also saw big winners. By then, since inventory and receivables had become less important, he had shifted to stocks trading at below book value. But the tempo of trading had picked up. He often found himself buying while stocks still had a long way to fall and selling too early. He bought Lehman Brothers below book shortly after it went public in 1994 and made 75% on it in a few months. Then Lehman went on to triple in price.<br /><br />Still, many of his calls were spot-on. He shorted Yahoo and Amazon before the markets tanked in 2000, and cleaned up. After that, unable to find many cheap stocks, he and Edwin liquidated, handing back investors $130 million. The Schlosses went out with flair: up 28% and 12% in 2000 and 2001 versus the S&P's --9% and --12%.<br /><br />The S&P now is off 15% from its peak, yet Schloss says he still doesn't see many bargains. He's 30% in cash. A recession, if it comes, may not change much. "There're too many people with money running around who have read Graham," he says.<br /><br />Nevertheless, he has found a smattering of cheap stocks he thinks are likely to rise at some point. High on his watch list (see table) is CNA Financial, trading at 10% less than book; its shares have fallen 18% in a year. The insurer has little debt, and 89% of the voting stock is owned by Loews Corp., controlled by the billionaire Tisch family. He says buy if it gets cheaper. "I can't say people will get rich on it, but I would rather be safe than sorry," he says. "If it falls more, I won't worry about it. Let the Tisches worry about it."<br /><br />Schloss flips through Value Line again and stops at page 885: Bassett Furniture, battered by a lousy housing market. The chair- and tablemaker is trading at a 40% discount to book and sports an 80-cent dividend, a fat 7% yield. Schloss mutters something about how book value hasn't risen for years and how the dividend may be under threat.<br /><br />His call: Consider buying when the company cuts its dividend. Then Bassett will be even cheaper and it eventually will recover.<br /><br />If only he had waited a bit to buy wheelmaker Superior, too. It's been two years since he bought in, and the stock is down a third. But the superinvestor, who has seen countless such drops, is philosophical and confident this one is worth book at least. "How much can you lose?" he asks.<br />--------------------------------------------------<br />Walter Schloss-1995<br />What makes these successful investors particularly interesting is that their good fortune is not uniformly attributable to extraordinary brilliance–though they are certainly smart–but more to the principles of value investing, which anyone with a solid grasp of high school mathematics can learn. Value investors don’t try to predict the growth prospects of the latest high-tech darling. Instead they focus on stocks that are cheap by basic measures such as market value to book value or earnings to price.<br />Take a closer look at the record of Walter Schloss, a walking, talking refutation of just about every major tenet of the EMT and probably the purest example of a traditional value investor. Schloss, 78, has been beating the S&P 500 since before there was an S&P 500. (Although data for the index now go back to 1926, S&P didn’t create the 500 until 1957. Schloss began his market-beating run in 1955, and the following year outpaced what would become the S&P 500.)<br />Over the 39 years that Schloss has been managing money on his own, the firm has averaged an annual rate of return of slightly over 20%, while his limited partners have made 15.5% a year on their money, reflecting the 25% cut of profits Schloss collects for his services. Over the same period, the S&P 500 averaged a 10% return.<br />The high returns that Schloss has earned are possible in a world governed by the EMT, but only if you take on much more risk than the market as a whole entails. Schloss, however, has taken less risk. Consider: Since the Brooklyn Dodgers beat the Yankees in the 1955 World Series, the S&P 500 has finished in the red nine times. Schloss lost money in only six years, and eased the pain for his clients in those periods by forgoing<br />management fees. Says he: “I don’t think I should get paid if I do a lousy job.”<br />Described by someone who knows him well as “a man of modest talent and light work habits,” Schloss practices investing in a way that any ordinary investor can. Dressed in a well-worn trader’s smock, he works entirely from public documents and a few publications like Value Line in one cramped, little office squirrelly with annual reports, 10-Ks, pictures of Babe Ruth, Lou Gehrig, and Schloss’s children and grandchildren. The<br />one window looks out onto an air shaft. The total value of the fixed assets in that office? Three thousand dollars. He has never had a computer or a fax machine, and he still pecks away on an old Olympus manual typewriter to correspond with clients.<br /><br />Schloss doesn’t speak to the managements of the companies he invests in, because he says he doesn’t want to get attached to them. And he doesn’t attend the companies’ annual meetings unless they are within a 20-block radius of his office. The simple truth here is that Schloss holds no advantage over other investors. And he agrees: He claims to have no special ability at analyzing businesses–a modest assertion with which his friends generally agree. Other investors may fly around the country searching for investment ideas; Schloss is far more likely to spend the entire day chatting with his son Edwin, the only other member of the firm, about the theater or the latest Updike novel, while their one telephone sits, un- ringing, on Schloss’s desk. What Schloss does have, however, says Chris Browne, of the old-line investment firm Tweedy Browne, which has provided Schloss with office space for many years, “is the ability to think for himself. Walter leans into the wind until the wind changes.”<br />Although Schloss says that he is flexible, he favors buying cheap companies as measured by market to book value. He prefers looking at asset values rather than earnings because he feels that accounting rules leave too much wiggle room to manipulate profits. Generally he prefers to buy stocks that are selling for one-half to two-thirds of book value. But they aren’t easy to find–only about 15 members of the 1,600-stock Value Line<br />universe meet that criteria. So he will go up to 100% of book or even slightly over. He gets in cheap, and when the stock price rises to what he thinks is fair, he gets out. Like many other dyed-in-the-wool value investors, Schloss doesn’t put a time limit on stocks he buys. As long as the reasons for buying remain valid, he’s willing to wait years for the payoff.<br />Not all of Schloss’s picks work out, but by maintaining a portfolio of about 75 to 100 stocks, which he turns over once every four years, he limits the damage from bad decisions. And he has had a few of those, including Intertan, an electronics retailer that Schloss bought in 1992, when the shares were $12. After Schloss invested, the stock suffered a big drop as its earnings dried up. He sold last year at $8 a share. Says Schloss:<br />“We bought it at about half book value, but it just got worse.” Even great value investors occasionally have to admit they were wrong.<br />Schloss keeps his risk low in other ways: Because he gets in when prices are already low and the market has low expectations for the company, he runs less chance of disappointment than if he owned fast-growth stocks, where investor expectations run high. Proof of Schloss’s low-risk style came in a dramatic way in 1987. Going into that fateful October, Schloss was up 53% for the first nine months, vs. 42% for the market.<br />But he finished the year up 26%, vs. the market’s 5%.<br />There are no secrets to the way that Schloss invests. The value investing he practices can be learned by anyone who takes the time. Just ask Schloss’s landlord and fellow outperformer, Tweedy Browne, which has passed on its successful value investing strategy from one generation to the next like Grandma’s recipe for pfefferneusen.Dance With Mehttp://www.blogger.com/profile/11452760400913968147noreply@blogger.com34tag:blogger.com,1999:blog-3761262596373585191.post-24279043908456942882011-01-28T22:27:00.000-08:002011-01-28T22:29:07.226-08:00Mohnish started building an investment checklisthttp://www.gurufocus.com/news.php?id=109358<br />I am lucky enough to be attending the Value Investing Congress. I took extensive notes on every speech and hope to post each one on GuruFocus over the next few days, in addition I will be posting a couple of interviews I plan on conducting. To follow my live updates from the Congress sign up for my Twitter alerts<br /><br />http://twitter.com/valuewalk<br /><br />Mohnish Pabrai spoke on the second day of the conference.<br /><br />Mohnish Pabrai, is Managing Partner of Pabrai Investment Funds, a group of focused value funds. Since inception in 1999 with $1 million, Pabrai Funds has grown to over $500 million in assets under management. Pabrai is the author of two books on value investing,Mosaic andThe Dhandho Investor.<br /><br />Mohnish Pabrai’s talk centers on checklists for investing. Mohnish “highly, highly recommends reading Dr. Atul’s book,The Checklist Manifesto: How to Get Things Right.”<br /><br />In 1935 when the US was looking for next bomber, Boeing invented the B-17 bomber widely exceeded everything the army had previously put out, however they had a test run and two pilots died.<br /><br />Boeing went back to look at what happened. And they realized that this was too complex. So Boeing engineers came up with a checklist. Afterwards the plan had a flawless bomber.<br /><br />Today the aviation check list has become very organized, and the pilots are trained to live and die by that checklist.<br /><br />The list is highly practical and easy to understand. The checklist is extensively researched and is stimulated by flight simulators to see if anything should be added or subtracted.<br /><br />In America there are five million lines inserted into America in ICUs. About 80% of these line insertions led to infection, of which 20-25% of which were fatal.<br /><br />A doctor in John Hopkins had nurses stand by the doctors before line insertions.<br /><br />He listed five points in his check list which are all pretty basic thinks like washing hands with soaps before line insertions.<br /><br />Nurses noticed that a lot of these rules were missed, so he had the nurses make sure the doctor kept to the five rules. After this happened the amount of infections went down to zero. He took this approach to other hospitals. And nowadays this procedure has become standard in US hospitals.<br /><br />The FAA is actually one of the most successful agencies.<br /><br />The FAA has very little to do with actual flights, they only go into action when an accident occurs. The FAA gets down of what happened. Bird hits happen to be a major problem for airplanes. When the Hudson crash occurred due to the Canadian geese, the FAA made sure to keep better track of Canadian Geese.<br /><br />Flying is very cheap and safe. However, the nuclear industry took a different approach which was not pragmatic and could not tolerate a single human life. And we are praying the price 20 years later.<br /><br />Mohnish found that the FAA approach could be used in investing. He compares a crash to a loss of capital.<br /><br />Mohnish started building an investment checklist. He looked at mistakes Warren Buffett and Charlie Munger made and mistakes by other great value investors.<br /><br />Mohnish compiled a list of 70 items two years ago. Since then Mohnish has achieved a zero error rate. However, Mohnish warns there are bound to be errors in the future.<br /><br />Mohnish looked at many the great fund’s 13Fs from 2004 to see approximately what their buy price and look at their sell price. He analyzed twelve investors and came up with a list of 320 companies that these investors lost money in totaling $20 billion. He looked at why they might have bought and sold these securities.<br /><br />He picked 26 of the 320 companies and looked in depth at them. He only looked at three financial companies to diversify across industries. Now Mohnish is up to 97 points in his checklist.<br /><br />Mohnish quotes Jack Welsh as stating that GE will only be in an industry where they are number one or two.<br /><br />HP and Lexmark had a duopoly in printers. Oakmark and Davis Funds lost a lot of money in Lexmark.<br /><br />However, if you looked at checklist you likely would have avoided this investment. Lexmark was more similar to Schick than to Gillette.<br /><br />One are with the largest area of mistakes has to do with moats. The question that must be asked is if the moat is sinking. LongLeaf lost $550 million in Sun Micro systems.<br /><br />There was a huge decrease in computer prices over the past few years, plus a shift from desktops to laptops this affected Dell a lot. LongLeaf, and Fairfax had some pain in that company.<br /><br />LongLeaf bought GM thinking that GM owned the truck business. When gas went to $4, GM was decimated. One of the checklist items is to look at what other factors can affect a moat in this case being commodity prices.<br /><br />There are give categories in the check list:<br /><br />Personal biases are a small part.<br /><br />Leverage, Management, Moat and valuation are the main four items of the checklists.<br /><br />The checklist highlights the possible main failure points. But there will never be an investment that will fit all 97 items.<br /><br />Mohnish is currently building a cheap Japanese basket of cheap stocks. Mohnish believes there is a great opportunity in that market. Despite the fact that it is hard to invest in the low cap and micro cap Japanese stocks.<br /><br />Mohnish does not currently have a checklist for selling.<br /><br />Disclosure: No PositionsDance With Mehttp://www.blogger.com/profile/11452760400913968147noreply@blogger.com0tag:blogger.com,1999:blog-3761262596373585191.post-22130643152477170562011-01-28T08:09:00.000-08:002011-01-28T08:10:04.944-08:00比亞迪 系統極限已被觸及比亞迪股份有限公司(下稱比亞迪)董事局主席兼總裁王傳福“不按常理出牌”的經營策略成就了比亞迪汽車昨天的奇跡,也為今天的突然“宕機”埋下了伏筆。隨著經銷商退網等一系列矛盾的總爆發,比亞迪汽車在第三季度面臨空前危機,原有組織運營的系統極限已被觸及。<br /><br /> 目前,業界普遍預測今年全年汽車將接近1800萬輛,增幅超過30%。而從11月份的汽車銷售數據顯示,比亞迪汽車銷售有限公司(下次比亞迪汽車)銷量為41714輛,同比下降17.6%,環比增長2.8%。前11個月比亞迪汽車累計銷量為46.85萬輛,完成全年銷量目標60萬輛的78.1%。若按12月銷量比11月增長10%估算,比亞迪汽車全年銷量增幅很可能低於20%,這也是比亞迪汽車銷量增幅首次低於20%。<br /><br /> 中國汽車市場一路高歌猛進,從銷量上來看已經是全球第一大市場,比亞迪汽車卻為何在此時遇到了麻煩?雖然今年本土汽車品牌的增幅普遍不高,甚至很有可能僅吉利一家能完成年初預定的目標,但是對於近幾年飛躍式增長的比亞迪汽車,這一切對比顯得過於鮮明。不過在業內人士看來,今年比亞迪汽車銷量和增幅的下滑,包括經銷商渠道大規模的負面新聞不過是比亞迪汽車內在問題的一次集中爆發。<br /><br /> “人海戰術”變陣<br /><br /> 11月中旬,加入比亞迪汽車銷售有限公司(下稱比亞迪汽車)尚不滿一年的李彤(化名)黯然離職。這個去年剛畢業的大學生,曾堅信自己一定會在比亞迪的舞臺上大展拳腳,因為就李彤了解,哪怕一個普通的本科畢業生,只要肯幹就很快能有獨當一面的機會,而且收入相當可觀。但是10月以來,比亞迪各“戰區”(即銷售大區)實施的大裁軍擊碎了他的夢想。<br /><br /> 雖然比亞迪汽車從來沒有辭退員工的傳統,但是對於一個本科畢業生來說,被轉調入製造部門當普通工人,李彤一時難以接受,只好選擇離開。<br /><br /> 李彤只是比亞迪汽車此次內部調整的一個無足輕重的小角色。比亞迪汽車似乎經歷了2009年的一撥高潮突然跌進一個波谷,加上內部部門的調整多少瀰漫著一絲不安的氣息。這對於老員工來說並不新鮮,不進則退就是遊戲規則,對於新進的員工而言似乎顯得格外殘酷,這裡有魔鬼和天使共存的一面。<br /><br /> 比亞迪從一家做手機代工和電池的公司半路出家做汽車,憑藉製造領域的垂直整合及銷售領域的人海店海戰術,比亞迪汽車銷量實現了每年翻番的幾何級數增長奇跡。如果按照這樣的速度,比亞迪股份董事長王傳福“2015中國第一,2025年全球第一”的夢想似乎指日可待。<br /><br /> 王傳福曾在公開場合表示,不要過度相信傳統行業裏的觀念,不要過於強調專業化分工。因此,比亞迪整車除了東安動力三菱4G18發動機和變速箱以外,多數零部件都實現了自給自足。有自己的模具廠,甚至連各種安全電子系統也有自己開發製造。與比亞迪汽車不同的是,傳統汽車公司都企圖努力把最關鍵的發動機掌控在自己手裏,而把技術含量不是很高的配件分配給供應商。<br /><br /> 至於人工成本更是比亞迪創業的絕招,王傳福走了一條“半自動”的中間路線——用大量的勞動力和必要的機器替代全自動生產線。擴大汽車產能時,比亞迪盡可能的使用大量夾具和人工以節省設備的巨大投資。就連生產線上的生產設備甚至也是比亞迪自己製造。據稱比亞迪汽車部門專門負責製造工廠的隊伍達上千人。<br /><br /> 在銷售渠道上,比亞迪汽車複製家電和快銷業的“人海店海”銷售模式,曾被視為其市場快速擴張的源動力。與其他汽車品牌寥寥的區域管理人員主要負責統籌協調不同,比亞迪的上千名區域經理下沉到經銷店,直接監督、指導甚至參與經銷商的日常經營。<br /><br /> 在比亞迪汽車早年間,很多剛畢業的大學生就被推上區域總監或者經理的職位,薪水轉眼就可以過萬,但是隨著高效的擴張,比亞迪汽車在今年年初的時候設置了運營經理一職,責任是協助區域經理銷售,區域管理的基層編制也隨之增加了一倍。此前,區域經理每壓經銷商一款車就可以得到48元的提成,協助經銷商賣掉一款車又可以得到48元的提成,而現在區域經理負責壓庫,運營經理負責協助銷售,提成只能是兩人分。<br /><br /> 今年第三季度以來,比亞迪汽車似乎突然觸及系統極限,出現了的“宕機”跡象:在經銷商退網風潮席捲全國的同時,比亞迪(01211.HK)第三季凈利潤度同比2009年同期下降99%。10月26日,比亞迪公佈三季度業績報告數據顯示公司第三季度凈利僅為1134萬元,僅相當於去年同期11.6億元凈利的1%。<br /><br /> 對於突如其來的波谷,王傳福解釋了三個原因,其一,因為比亞迪去年的高增長,取得了很大的成功。其二,在第三季度,為了消化庫存,比亞迪削減了新車的出廠量。其三,比亞迪加大了銷售力度,這也導致一些利潤損失。<br /><br /> 王傳福分析,低排放汽車在中國的銷售腳步已經放慢,特別是1.6升以下車型。今年,這一市場的份額將從56%下降到46%,這正好是比亞迪的主要產品之一,但比亞迪汽車沒有能夠意識到這一點。<br /><br /> 今年比亞迪汽車經銷商大範圍反水事件以後,比亞迪汽車總經理夏治冰當眾表達了對經銷商的維權訴求也表現出了積極應對、壓縮今年銷售目標、收縮批發量、成立比亞迪汽車金融公司、加快提供新產品等“行銷新政”。<br /><br /> 由此,便出現了前面李彤離開比亞迪的一幕。從10月開始,比亞迪銷售公司開始召回大量的銷售人員,下放工廠,去掉了區域運營經理的職位。此前比亞迪汽車銷售分三大戰區,每個戰區有一號總經理和二號總經理,現在比亞迪撤銷掉其中一個戰區總經理,並且每個戰區同時負責4張網(比亞迪汽車銷售渠道分成A1、A2、A3、A4四個銷售網路,每個網都有自己的標準車型和盈利的重量級車型,比如A1網的F3、F6,A2網的F0、 L3,A3網的G3,A4網的M6、I6。)的銷售。此外,比亞迪汽車還計劃把A4網路併入A3網,大幅放慢網路擴張的腳步。<br /><br /> “比亞迪模式”神話終結<br /><br /> 2005年比亞迪F3選擇了分城市上市,其中一站選擇了山東,和當時動則全球同步上市的合資品牌完全沒有可比性。就在這樣一個小型的媒體活動上,有幾位當地嘉賓領導在念稿的時候沒有任何一個人把“比亞迪”三個字念對,有人念“比迪汽車”,有人念“比迪亞汽車”。<br /><br /> 當時,比亞迪在汽車業務上甚至無法和中興汽車,吉奧汽車,江南汽車相比。但是5年過去了,比亞迪汽車已經躋身百萬輛汽車陣營,並且建立了獨特的比亞迪汽車的增長模式。這一點不得不讓同行業的人對這個後來居上的“外行”保持警惕,並不斷回頭審視這個膽大妄為不懂汽車的同行。<br /><br /> 一位經銷商這樣概括“比亞迪模式”的核心:把普通人的力量激發到極致,把供應鏈的成本壓縮倒極致,把經銷商的潛力逼到極致。<br /><br /> 比亞迪銷售公司招募了大量大學剛畢業的年輕人,也就是比亞迪汽車銷售公司總經理夏治冰口裏的“愣頭青”們,一齣道就被架上了慘烈的競爭,收入、前途和其所負責網路銷量密切掛鉤,與此同時,大規模密集建比亞迪汽車銷售店,讓各個經銷商之間的內耗大於外部競爭,利潤攤薄。<br /><br /> 王傳福一直認為,自主創新就是要敢於挑戰傳統製造業的觀點,要有膽略而不是迷信權威。所以比亞迪除了在生產環節高度垂直化,開創了目前國內本土汽車品牌的先河,極大的降低了生產成本。比亞迪在銷售渠道上也用全新的分網模式,分成A1、A2、A3、A4四張網,每張網裏賣的車型都不一樣,這樣一來,降低了經銷商的準入門檻,輕鬆增加銷售網路。<br /><br /> 王傳福分網的思路是,比亞迪品牌號召力還不夠強,但是為了實現銷量目標必須增加銷售網路,只有更多的網路才能有更多的銷量。而增加網路是很困難的。比如,在深圳A1網有5個店,你要把它擴到10個店,現有經銷商肯定不幹。比亞迪的做法就是把F3改一下,看得見的地方都不一樣,看不見的地方都一樣,變成G3或L3了,用A2或A3網銷售,這樣比亞迪就可以很輕易地擴大網路,因為車型不一樣,大家相安無事。這樣,比亞迪的店數就很輕鬆地從200家擴到1000家。<br /><br /> 就在所有汽車企業都在強調“4S”的專業化服務時,比亞迪反其道而行之,利用它的分網模式大建“2S”店、城市社區店、量販店將自此開始進入加速發展的時代。降低了經銷商的準入門檻,及其注重銷售數據,消費者滿意度卻不被列為考察範疇。這種方式讓比亞迪可以迅速的鋪開市場,在二三線城市也很容易買到比亞迪汽車,讓比亞迪汽車在很短的時間內做大規模,攤薄工業化生產研發的成本。這讓比亞迪汽車在短期內實現超100%的增長速度。但問題是,同樣是比亞迪品牌,消費者卻不能買到大部分的比亞迪汽車,比如你在A1網買不到F0,必須要跑到A2網裏才能買到。另外,比亞迪經銷商內部競爭加劇。這樣的模式並不被所有人看好,儘管A1和A2網的日漸成熟,以及每個網都有一款擔當萬級銷量的車型使得比亞迪銷量有了一定的保障。<br /><br /> 對於這樣的銷售網路設置,卻讓很多比亞迪經銷商不滿,事實上比亞迪經銷商反水並非今年發生的問題,只是在今年集中爆發。有經銷商分析,目前比亞迪的產品品種並不足以支撐這樣的銷售網路,網路的細分使全國建立了1000多家比亞迪經銷商,加上對銷售網路的建設缺少規則,佈局出現混亂。比如網路佈局缺乏科學、合理的論證;再比如在同一個城市兩個銷售網點之間的半徑應是多少公里等。網點越來越多,銷售政策苛刻,經銷商之間的競爭主要就是價格戰。同時,商家還會屢屢遭受廠家不顧死活的壓庫和承諾不兌現等欺詐。這種種行為令經銷商抱怨不斷。<br /><br /> 與此同時,比亞迪銷售網路的內耗也在加劇。A1、A2、A3、A4的銷售網路出現了相互挖角,區域經理之間相互競爭,區域經理和運營經理之間相互競爭。<br /><br /> 而由於區域經理考核基本僅與提車數量掛鉤,比亞迪的區域管理人員時常無視價格體系維護,甚至慫恿經銷商降價衝量。<br /><br /> 就在09年比亞迪汽車銷量超出預期達到40萬輛的時候,業內已經有人士預測,比亞迪的瓶頸和天花板將在年銷50萬輛的時候出現。同時由於這樣的瀰漫性發展的“千店計劃”難以顧全經銷商利益,會給銷售系統埋下重大的隱患,也給做品牌提升的廠商留下了市場空間。<br /><br /> 果然今年第二第三季度,紛紛出現了大規模經銷商激烈的退網反水現象。王傳福坦言:“今年年初我們定下的80萬輛的銷售目標,是一個很大的錯誤。由於我們在制定銷售計劃時,錯誤地高估了市場而造成了惡果。現在,我們付出了代價。”比亞迪認識到錯誤,並調整了預期。現在我們要減少庫存,並使之保持在一個合理的水準上,這是我們要去解決的首要問題。<br /><br /> 由於高庫存,比亞迪只好下調價格銷售,王表示:“降價會影響我們的品牌,由於汽車行業的週期波動很大,非常不穩定,如果沒有適當的規劃,公司將蒙受巨大損失。”<br /><br /> 作為一種顛覆性的銷售策略,比亞迪在“遊擊戰爭”中摸索出來的打法值得重視和研究。同時,比亞迪在已經完成的從10萬輛→20萬輛→40萬輛產能提升過程中的保供、物流、生產組織方面的策略同樣值得尊重和仔細研究。但是很明顯這樣一個網路系統卻超出了比亞迪公司的承載能力,經銷商反水對於比亞迪汽車並不是今年才發生的事情,只是在9月份所有的矛盾更加激化,顯現的尤為嚴重。<br /><br /> 下一個“F3”在哪?<br /><br /> 問及比亞迪汽車突出重圍,戰果纍纍的原因,比亞迪汽車的人一定會告訴你比亞迪垂直整合的優勢,把製造做透的能力。正如比亞迪汽車銷售公司副總經理王建均所說:“比亞迪就是把簡單的事情做到極致然後成了絕招。”<br /><br /> 但是今年比亞迪的系統“當機”反應的不僅僅是汽車銷售的問題,每個關心比亞迪汽車的人心裏都會有一個疑問,比亞迪F3的換代車型在哪?F3是比亞迪汽車生產銷售的第一款車,由於和豐田花冠相似的外表,精準佔領了7、8萬這樣一個當時本土品牌和合資品牌的空白市場,在業界有“黑馬”之稱。這款車型從第一輛車到第10萬輛,大概用14個月的時間,到第20萬輛的時候,只用了12個月的時間。今年上半月,全國單車型前十名的銷量中比亞迪佔了兩席,1-6月比亞迪F3銷量高達15.4萬台。<br /><br /> 比亞迪汽車山寨模倣的過程中有沒有升級自己的汽車研發體系?5年過去了,比亞迪汽車除了生產出一系列在F3平臺上開發出來的衍生車型外,沒有再升級換代F3。F3的售價從05的7、8萬賣到了現在的4、5萬。如果說,比亞迪垂直整合的能力成就了它低成本,高效的擴張模式,但同時意味著,一旦你的車型升級,你所有的垂直化的系統都要升級,這將是一個越來越難以做的選擇。<br /><br /> 如果僅僅押寶在新能源車上,這個未來是不是有著太多不確定因素?在王傳福看來,汽車工業發動機時代含金量很高的裝置,也許有一天都會被軟體所替代掉。對於一直缺乏相關部件核心技術的中國汽車企業而言,電動車時代實在是全面超越的最好時機。<br /><br /> 數據顯示,比亞迪F3DM雙模電動車自2008年12月上市以來僅銷售了300多輛。比亞迪E6純電動車的銷量也乏善可陳,目前僅有50輛E6作為計程車在深圳試運行。目前,比亞迪F3DM低碳版在深圳的零售價格是16.98萬元,經過各種補貼後價格已經達到8.98萬元,深圳市在新能源配套方面已經走在全國前列,但這些因素依然沒有促進F3DM的銷量。<br /><br /> 其他汽車品牌推出的面向私人銷售的新能源車型也銷量慘澹。11月王建均在接受媒體採訪時表示:“比亞迪電動汽車的重點市場已經從個人消費轉向了面向公共交通等在內的公用事業。”雖然比亞迪汽車已經推動了中國電動車的進程,但是業內普遍認為電動車市場化之路仍然有很長的路要走。而比亞迪電動車重點從個人消費轉向公共交通似乎也印證了私人消費電動車的市場困境。<br /><br /> 從汽車工業發展歷史來看,王傳福開創的商業模式在通用、福特都有過先河。通用、福特、豐田都在生產環節採用過縱向一體化模式,但隨著企業規模的擴大,一家企業將難以承擔鉅額的研發費用,難以適應市場對整車品種多樣化的需求,從而在技術創新上產生滯後效應。所以現在許多汽車跨國公司已經將這一模式紛紛摒棄,代之以平臺戰略和全球採購的模式。<br /><br /> 然而,王傳福堅信:“要想突圍必須要走差異化的路線,通常的做法只有死路一條,1%的希望總比100%的失敗要好,所以戰略上一定要與眾不同。”在他看來,只要戰略上不出問題,抓好銷售和研發,企業就不會出大亂子。<br /><br /> 但是很多業內人士看來,比亞迪汽車是違背汽車行業規律,過於注重結果急功近利,忽略了研發體系的打造,太偏重於新能源車。只是對於比亞迪這麼一個民營企業而言,也許每一天都是生死關,它狂躁激進的擴張似乎是一種恐懼的本能。Dance With Mehttp://www.blogger.com/profile/11452760400913968147noreply@blogger.com0tag:blogger.com,1999:blog-3761262596373585191.post-60377605069862412732011-01-07T20:05:00.000-08:002011-01-07T20:08:37.154-08:00discipline, hardwork, practicecharlie munger<br />Becoming a good investor<br />"If you're going to be an investor, you're going to make some investments where you don't have all the experience you need. But if you keep trying to get a little better over time, you'll start to make investments that are virtually certain to have a good outcome. The keys are discipline, hard work, and practice. It's like playing golf -- you have to work on it."<br /><br />Investing mental models<br />"You need a different checklist and different mental models for different companies. I can never make it easy by saying, 'Here are three things.' You have to derive it yourself to ingrain it in your head for the rest of your life."<br /><br />Views on Ben Graham's ideas<br />While Munger largely rejects Ben Graham's cigar-butt style of investing, he embraces the core principles: "The idea of a margin of safety, a Graham precept, will never be obsolete. The idea of making the market your servant will never be obsolete. The idea of being objective and dispassionate will never be obsolete. So Graham had a lot of wonderful ideas."<br /><br />Stock valuations<br />Munger continues to report difficulty finding good stocks to buy: "In terms of the general climate, I think it's pretty miserable for anyone who likes easy, sure money. Common stocks may be reasonably fairly valued, but they are not overwhelming bargains."<br /><br />The importance of reading<br />"In my whole life, I have known no wise people (over a broad subject matter area) who didn't read all the time -- none, zero... You'd be amazed at how much Warren reads -- at how much I read. My children laugh at me. They think I'm a book with a couple of legs sticking out."<br /><br />How to get rich<br />A young shareholder asked Munger how to follow in his footsteps, and Munger brought down the house by saying, "We get these questions a lot from the enterprising young. It's a very intelligent question: You look at some old guy who's rich and you ask, 'How can I become like you, except faster?'"<br /><br />Munger's reply was: "Spend each day trying to be a little wiser than you were when you woke up. Discharge your duties faithfully and well. Step by step you get ahead, but not necessarily in fast spurts. But you build discipline by preparing for fast spurts... Slug it out one inch at a time, day by day, at the end of the day -- if you live long enough -- most people get what they deserve."<br /><br /><br />Circle of competence<br />"There are a lot of things we pass on. We have three baskets: in, out, and too tough...We have to have a special insight, or we'll put it in the 'too tough' basket. All of you have to look for a special area of competency and focus on that."<br /><br />Buying into stock declines<br />"Over many decades, our usual practice is that if [the stock of] something we like goes down, we buy more and more. Sometimes something happens, you realize you're wrong, and you get out. But if you develop correct confidence in your judgment, buy more and take advantage of stock prices."Dance With Mehttp://www.blogger.com/profile/11452760400913968147noreply@blogger.com19tag:blogger.com,1999:blog-3761262596373585191.post-80603064502954276352010-11-28T06:39:00.000-08:002010-11-28T06:41:19.358-08:00保险公司的内含价值 93.45元对应的内含率是:2.97倍http://www.ltkdj.com/bbs/viewthread.php?tid=39685&extra=page=1<br />“保险公司的内含价值”是内地投资者近些年才刚开始关注不久的指标,换句话说,净资产、净利润并不是保险股估值的最好指标。<br /> 王小罡指出,保险公司(主要指寿险公司)的内含价值(EV)相当于其他行业公司的净资产,保险公司的内含价值收益(即内含价值的实际增长,或EVE,EV Earning)则相当于其他行业公司的净利润。因此,保险公司的实际市净率为P/EV,实际市盈率为P/EVE,实际净资产收益率为EVE/EV。<br /> 李双武表示,市场经常只看一个公司的市盈率、市净率,而这不是判断保险股是否具有投资价值的主要因素。保险公司的特点是看其内含价值,比如说太保,按12%的折现率,意味着中国太保的净资产,每年是按12%的内含价值增速往上涨的,也就是说在内含价值以下买中国太保,内含价值每年都会有12%的增长。<br /> 以市盈率来看,国寿、平安最近分别为50倍、46倍,太保则高达138倍。王小罡指出,从内含价值的角度看,2009年平安的内含价值为20元/股,国寿和太保均在11元/股左右;而从内含价值收益角度看,国寿、平安、太保分别为1.56元/股、4.01元/股、1.51元/股。由此得出国寿、平安、太保的实际市盈率(P/EVE)分别为19.1倍、12.9倍、16.7倍。<br /> 王小罡表示,从这些数字可以看到,三大保险股的估值都比较低,特别是平安,2009年不到13倍,2010年预测值不到11倍。A股市场上平安现在每股50多块钱,对比其他两家保险公司,性价比更高、成长性也较好的平安其实已经相当便宜,很适合长期持有。<br /> 在王小罡看来,三大保险股H股股价高于A股的现象在2010年还会持续,而且将来会持续多长时间,并不好判断。<br /> 李双武表示,投资者在A股还是在H股投资保险股其实差别并不大,不过从目前来看,A股更便宜些。如果是一个长期投资者的话,当保险股的股价在内含价值以下时,应该买入,如果某一时间,保险股被炒作,价格远远超过内含价值,就应该卖掉,这是保险市场特有的。<br /> 在三只保险股中,大多数分析师更看好估值相对较低的平安。海通证券(9.67,-0.12,-1.23%)特别看好平安,认为A股估值水平显著低于H股,具备较好安全边际;申银万国也建议投资保险股,应首选配置中国平安。<br />09年平安内含价值是21.1元<br />10年中平安内含价值是24.1元<br />预计10年平安内含价值:26.5元<br />按50元市价,10年市盈率才:50/(26.5-21)=9.1<br />太记住以后买保险股,价格在内含价值2、3倍,可以买进。4倍内含价值可以忍受,但5、6倍时考虑卖出。<br />低估了<br />港股的00945,宏利金融。2000年3月80元,到2006年5月是580元,还不计分红。宏利金融只是加拿大保险股,人口老化啊。<br />港股调整主要是AIA保险招股,最多1600亿港元,国外投资者配置保险股会调仓。但股价最终还是跟内含价值和新业务价值走,看好平安2019年股价在500-1200元,极端到2000元/股<br />三季净资产14.52<br />三季净资产增长14.52-13.75+0.45=1.22,不算太差,但也没超预期<br />分析一下正常经营净资产增长情况:09年11.57,10年1季:12.21,10年2季:13.75(扣换股增发实际12.6),10年3季:14.52<br />一季度增长:0.64<br />二季度增长:0.39<br />三季度增长:1.22<br />上面数字没考虑换股增发增厚,但考虑分红影响<br />再看内含价值增长:<br />正常经营:上半年内含价值增长:24.1-21.1-1.15=1.85元,其中净资产增长1.03,业务价值增长1.85-1.03=0.82,假设下半年也是0.82元。<br />假设四季度净资产也增长1.22元,刚全年内含价值增长:24.1+1.22*2+0.82=27.36。<br />留待以假设今年上证收在3000点,四季增长和三季差不多,粗算净资产4季也增加1.22元<br />正常经营全年净资产0.64+0.39+1.22+1.22-0.45=3.47,<br />年报净资产:11.57+3.47+1.15=16.17<br />内含价值:27.36<br />留待年报验证<br />后验证<br />09年净资产是11.57 10年16.17,增加39.7%<br />09年内含价值21.1 10年27.36,增加29.6%<br />净资产和内含价值有收购深发展增厚的1.15元,这不是可持续性的。所以年报净资产和内含价值增加超预期<br />当然我也估算平安2010年合理价格<br />数据:2009年内含价值21.1,寿险内含价值:13.71,一年新业务价值:1.61<br />2010年中报内含价值24.1,寿险内含价值:14.91,一年新业务价值:1.19<br />因保险业上半年保费比下半年高,但股市下半年比下半年好,假设寿险内含价值增长同上半年一样,一年新业务价值全年增长36%<br />则2010年报:内含价值27.36,寿险内含价值:17.30,一年新业务价值:2.19<br />1、寿险按25-35倍新业务价值,其它银行、财险、集团按15元/股,股价在87.05-108.95<br />2、按内含价值2.7-3.5倍:股价在73.87-95.76<br />平安稳含的利好:房地产投资价值重估,PE投资项目和深发展交叉销售贡献,但都要5-10较长时间体现。其中房产和PE靠以前累积的项目,大幅领先同行,相信过几年后,投行再给平安估值时,会提到上面,然后再给平安比同行更高的溢价8月末,A股市场的三大保险业巨头相继交出半年期成绩,在当前低迷的资本市场面前,保险股消费属性的重要性进一步凸显。三大保险公司在衡量新业务发展方面的重要指标一年期新业务价值的表现上迥然不同。 新业务价值是衡量保险公司业务长期可持续性增长的一个重要指标,是指在报告期间销售的新保单在签单时的价值。包括新业务预期续保和预期合同变动的价值。计算新业务价值时,应当考虑持有要求资本的成本。银河证券分析师许力平指出,保单缴费方式、缴费期限以及销售渠道都会影响保险公司新业务价值,期缴产品比趸缴产品对新业务价值贡献更大,营销渠道要比银保渠道销售的保单新业务价值更高,保单缴费期限延长也会增加新业务价值。 A 平安 迅猛增长44% 平安的新业务表现相当抢眼,一串漂亮的数字超出不少机构预期,使得多家分析机构对平安的前景看好。首年保费增长52.1%,一年新业务价值增速高达44%,华泰证券分析,平安证券全年的一年新业务价值至少要达到30%的增速。快速增长的新业务促成平安上半年规模保费收入达到931.25亿元,同比增长25.98%。银河证券分析师许力平认为,“平安在最近几年扩张速度非常快,主要压力还是来源于过去积累的一些高利率保单,必须依赖新保单收入来消化。”除此之外,寿险市场第二梯队泰康、新华的步步追赶也促使平安发力增加保费收入。 平安一年新业务价值增速远远超过规模保费增速说明平安新业务的开拓是“质”“量”双优。质的提高来自于业务结构的优化。从渠道看,利润率较高的个人业务渠道占比提高5.8%,占比达到78.8%。个险规模保费增长35.9%,催化一年新业务价值迅速增长。从缴费期限看,去年以趸缴保费贡献为主,而今年上半年期缴业务占比有了明显上升。从产品结构上,分红险取代万能险成为主打险种。除了结构上的优化以外,平安的销售能力提高也是促成新业务价值增长的重要因素,最显著的表现是件均保费提高,人均产能提高。 B 太保 稳步提升18% 中国太保继续稳步提升的趋势,一年新业务价值增长18%,表现也不俗。在新业务的推动下,上半年太保寿险总保费收入同比增长超过50%。尤其是分红险,增长速度最快,同比增速达到73%。不过也有市场相关分析人士认为,相对于新保保费53%的增速,太保一年新业务价值的增速差强人意。对此,许力平认为,“主要原因是依赖银保业务,银行业务中很多是趸缴产品,趸缴产品在为公司创造长期性的业务收入方面表现逊色很多。”据记者资料统计,上半年太保银保渠道增速高达92%,营销渠道的增速只有19%。营销渠道业务占比从2009年的将近五成下降到今年上半年的38%。除了渠道结构不合理外,缴费期限也呈现短期化趋势,缴费10年及以上的传统和分红型新保业务收入相比上年下降18.4%,中短期趸缴分红产品的比重上升。 C 国寿 调整中增长10.9% 中国人寿的一年期新业务价值增长较为缓慢,同比增长仅10.9%,低于行业平均水平。首年保费收入增长仅9.4%,这也导致中国人寿的市场份额出现一定下滑。 虽然中小保险公司尤其是寿险市场第二梯队的崛起给寿险巨头带来了冲击,但是银河证券分析师许力平指出,“中国人寿新业务价值增长缓慢主要还是受业务结构调整的影响。2008年以来保监会要求调整保险公司的业务结构,注重长期可持续性发展,中国人寿的调整力度是最大的。但是中国人寿的调整节奏有些缓慢,导致新业务保费收入增长缓慢。” 在资本市场表现糟糕的情况下,新业务带来的利润就成为挽救公司净资产下降的救命稻草,在如此缓慢的保费增长状况下,国寿上半年归属于股东的每股净资产比2009年年末下降了9.2%。 尽管中国人寿业务结构调整比较缓慢,但也取得一定成绩,突出的表现就是新业务价值增长速度超过首年保费增速。国寿的业务结构也的确朝更均衡、合理的方向发展:保单期限延长,10年期及以上首年期缴保费的比重达到27%,期缴率提高,首年期缴保费占新保保费的比重有所上升。 不过, 许力平指出,只有在公司经营持续稳定的情况下,新业务价值预期未来才可以为保险公司带来利润,但在短期内,新业务价值越高,并不意味着公司利润越高。平安2010年报预测和估值<br />先看内含价值增长:<br />正常经营:上半年内含价值增长:24.1-21.1-1.15=1.85元,其中净资产增长1.03,业务价值增长1.85-1.03=0.82,假设下半年也是0.82元。<br />假设四季度净资产也增长1.22元,刚全年内含价值增长:24.1+1.22*2+0.82=27.36。<br />再看净资产增长<br />假设今年上证收在3000点,四季增长和三季差不多,粗算净资产4季也增加1.22元<br />正常经营全年净资产0.64+0.39+1.22+1.22-0.45=3.47,<br />年报净资产:11.57+3.47+1.15=16.17<br />09年净资产是11.57 10年16.17,增加39.7%<br />09年内含价值21.1 10年27.36,增加29.6%<br />当然净资产和内含价值有收购深发展增厚的1.15元,这不是可持续性的。所以年报净资产和内含价值增加超预期<br />我也估算平安2010年合理价格<br />数据:2009年内含价值21.1,寿险内含价值:13.71,一年新业务价值:1.61<br />2010年中报内含价值24.1,寿险内含价值:14.91,一年新业务价值:1.19<br />因保险业上半年保费比下半年高,但股市下半年比下半年好,假设寿险内含价值增长同上半年一样,一年新业务价值全年增长36%<br />则2010年报:内含价值27.36,寿险内含价值:17.30,一年新业务价值:2.19<br />1、寿险按25-35倍新业务价值,其它银行、财险、集团按15元/股,股价在87.05-108.95<br />2、按内含价值2.7-3.5倍:股价在73.87-95.76<br />25-35倍是新业价值倍数,不是PE,这是保险业一种估值参数,这个参数定的很复杂,但一种最方便是新业务价值增长数相当倍数<br />正常经营全年净资产0.64+0.39+1.22+1.22-0.45=3.47,<br />年报净资产:11.57+3.47+1.15=16.17<br />原来这里算错,应该是<br />正常经营全年净资产0.64+0.39+1.22+1.22-0.45=3.02<br />年报净资产:11.57+3.02+1.15=15.74<br />09年净资产是11.57 10年15.74,增加36.0%<br />09年内含价值21.1 10年27.36,增加29.6%<br />07、08年内含价值估算在20-22,没有42这么高,当时股价是内含价值的5倍以上,确实可以考虑卖出<br />还是那句话,保险股,价格在内含价值2、3倍,可以买进。4倍内含价值可以忍受,但5、6倍时考虑卖出<br />合理估值=每股内含价值+每股一年新业务价值*新业务倍数。<br />这个是寿险的估值,平安还有财险、银行、投资、集团业务<br />寿险内含价值:17.30,一年新业务价值:2.19<br />按25-35倍新业务价值,其它银行、财险、集团按15元/股,股价在87.05-108.95<br />但这新业务倍数太难选,低时10倍,高时50倍都有,但按平安这两年都在35%增长,取25倍算保守,有人说增长多少就是多少倍<br />寿险按10、15、20、25、30、35、40、45、50倍新业务价值,其它银行、财险、集团按15元/股<br />股价分别为:54.2、65.15、76.1、87.05、98.0、108.95、119.9、141.8<br />我估计2010年很难见到10倍新业务倍数估值,既54.2元很难见到<br />寿险按10、15、20、25、30、35、40、45、50倍新业务价值,其它银行、财险、集团按15元/股<br />股价分别为:65.73、80.28、109.38、123.93、138.48、153.03、167.58、182.13<br />H股还在80以上。保险股的魅力在于,指数几年不动,保险公司可以靠内含价值的增长提高估值,明年平安再见到60以下有点难度,不然那新业务价值倍数在10倍以下了。发达国家保费增长才几个点,平均都在10多倍新业务价值倍数。<br />庄就是净资产、内含价值、新业务价值的增长速度。连业绩都不算2011.11.3 保险业:AIA与国内保险公司经营比较<br />AIA上市受追捧,首大涨17%投资者看好AIA亚太业务,中国溢价和低估值促使AIA受追捧。<br /> 亚太地区保险业务发展潜力2009年亚太地区保险收入3580亿美元,占全球保险市场的15.4%,但亚太地区保险市场体现出不均衡状态,表现在高保费增长与较低的保险深度和密度,人口高增长与缺失的医疗体制,高经济增长与高储蓄率,人口老龄化与落后的养老金市场。这些都为商业保险提供了巨大的机会。<br /> AIA在中国大陆经营情况AIA目前只在广东江苏上海北京四地开展业务,但市场份额却占到第8位,从业务结构看,AIA主要业务来自于盈利较高的个人寿险。AIA、中国平安(60.44,-0.05,-0.08%)、中国人寿(25.63,-0.07,-0.27%)、中国太保(26.00,-0.01,-0.04%)年化后银保保费在年化总保费(年化保费=趸交保费*10%+新单期交保费)中占比分别为8%、9.6%、31%、52.5%。从业务经营和新业务价值情况看,中国平安与AIA最为接近。<br /> AH股风格比较A股注重市值较小成长较大的股票,而H股更多看中某类地区和行业具有垄断地位公司,因此两地上市的金融企业,H股溢价存在就不言而喻。<br /> 投资建议和风险提示从AIA上市表现看,备受H股投资者追捧,我们继续维持现有行业买入评级。<br /> 资本但平安这两年内含价值和新业务价值增长速度在26.5%和36%,假设以后都增长25%、30%,到2020年内含价值和新业务价值分别是:245元和28.7元。关键是平安以后十年能不能保持这个速度<br />友邦高速发展时股价是内含价值的3-5倍,或新业务价值20-35倍加一倍内含价值<br />市场波动提高内含价值还有一方法:并购,汇丰就是这样发展的会影响公司业绩。<br />每年下半后,评级机构都会说到平安保费放缓,有时不知道评级机构真不知,还是没做好功课。我一直在跟踪平保保费,看下表<br />平安保费每年一直是前高后低,特别是个险、期交的比例很高。期交意味着下一年最少还要交同样保费(没新单和退保情况下),<br />从表中,轻易判断平安10-12月保费收入,还要继续放缓(除非这三个月平保改变策,大量增加低价值的银保业务),明年1、2月保费又是同比、环比大增,其实都在预期之内<br />预计<br />1-10月总保费1890 <br />1-11月总保费2040<br />1-12月总保费22502011.11.1<br />港股平安不一样的90元<br />2007年9月平安H股上到90元,今天港股平安H收报93.45.<br />07年港币兑换人民币:100:97<br />今天港币兑换人民币:100:86<br />07年平安内含价值是20RMB<br />今天平安内含价值是27RMB<br />07年平安H股在93.45元对应的内含率是:4.53倍,A股在93.45元对应的内含率是:4.67倍<br />今天平安H股在93.45元对应的内含率是:2.97倍,A股在62.49元对应的内含率是:2.31倍<br /><br /><br /> 鉴别点 大顶特征 大底特征<br /> 估值面 2次大牛市顶部都发生在市场平均PE60之上,一次在50PE上,因此60PE是绝对的高危区 2次大底部都在市场平均PE15左右,大量的股票破发行价、增发价,破净资产。企业开始陆续出现回购,增持股票等行为。因此PE15左右是低估区。<br /> 技术面 大顶的日线基本是双头;月线特别注意第一不可跌破5月线(特别是下月依然无法收回),从此指数被5月线一路压制;第二是配合第一的指标同时,月MACD高位死叉迹象+KDJ高位死叉迹象;日线上30日线成为强压,历次反弹都难以连续站稳几天。市场演绎的是经典的盘久必跌轮回。 以月K线突破5月线为标志,且KDJ低位20左右金叉成功,此后一路依托5月线上行不得跌破确认;同时配合周线5金叉10,依托5上行,周KDJ20金叉;日线突破长期下沉趋势线压制,市场持续放量,底部盘整没有再次盘久必跌,反而是越盘越缩量并几根大阳线突破,之后每次盘整低点逐步抬高;放量突破30日线,特别是30日线开始有上拐倾向时<br /> 政策面 从对市场的支持到模糊,再到不断的提示风险,再到实质上的频频出手干预政策(如印花税提高),打压股市的态度越来越强烈和露骨 从对下跌的默许,到言论开始明确挺市,到开始局限于市场本身的干预(调印花税红利税等),到频频呼唤信心并动用资金手段(降息,发基金,停IPO等),最后到实质性的产业政策刺激(投资或者对多行业的长期利好或者股票市场的大改革等)<br /> 资金面 连续的加息、基金窗口指导、暂停新基金发行、基金仓位几乎都处于极高位、大盘股不断上市或者大额度融资 连续的降息,加大基金发行力度,力压IPO冻结,否决所有大额的融资计划,基金仓位几乎都处于合同约定的最低位<br /> 心理面 市场不断的找寻泡沫支持的理由,几乎没有机构看熊市场,一致性的看好市场的持续走好,基金和股票开户数连创新高,特别是周围从不关心股市的人开始纷纷入市 市场一开始绝不会相信牛市已经结束,其中的几次反弹都会带来新的憧憬,到开始绝望不顾一切的抛售,再到对任何利好都漠不关心且不看好,对经济前景极度绝望和恐惧<br /> 其它 <br /> 配合技术面,出现前景不明的重大隐患事件,比如金融危机、严重的通胀迹象、某热点经济泡沫崩溃迹象等<br />另一个值得注意的,则是强周期类股票的全面溃败。<br /> 配合技术面,出现大热点板块,开始有讲故事的基础。同样,强周期类股票特别是有色等股票的反弹猛烈,也往往是市场底部形成的迹象。Dance With Mehttp://www.blogger.com/profile/11452760400913968147noreply@blogger.com0tag:blogger.com,1999:blog-3761262596373585191.post-66884671538439675562010-11-27T02:53:00.000-08:002010-11-27T03:47:16.494-08:00Mohnish Pabrai - 2Interview With Value Investor Mohnish Pabrai<br />Bookmark and Share<br />It is my privilege to bring you the following interview I recently conducted with value investing superstar Mohnish Pabrai. Mohnish is my favorite investor who doesn't have the initials W.B. His stock selection style is similar to mine, except that he's more successful at it. Much, much more successful.<br /><br />I'll let the numbers speak for themselves: A $100,000 investment in Pabrai Funds at inception (on July 1, 1999) was worth $722,200 on March 31, 2007. That works out to an annualized return of 29.1%, and that's after all fees and expenses. Assets under management are over $500 million, up from $1 million at inception. Although a person probably can't get into the investing hall of fame with eight years of outperformance (even if they crush the indices), Pabrai is already mentioned in most articles about the search for the next Warren Buffett, and justifiably so.<br /><br />Equally importantly, he genuinely wants to help others become better investors, and in that spirit has just published his second book, The Dhandho Investor. The book is both illuminating and easy to read, and it deserves to be on every investor's bookshelf next to Benjamin Graham's The Intelligent Investor. This is why I felt extremely fortunate when he recently agreed to answer some questions about his investment strategy in this exclusive interview, conducted by email. I hope you find it useful, and I hope it inspires you to pick up a copy of his book if you haven't already.<br /><br />Happy Investing,<br /><br />Tom Murcko<br />CEO, InvestorGuide.com<br /><br />InvestorGuide: You have compared Pabrai Funds to the original Buffett parternships, and there are obvious similarities: investing only in companies within your circle of competence that have solid management and a competitive moat; knowing the intrinsic value now and having a confident estimate of it over the next few years, and being confident that both of these numbers are at least double the current price; and placing a very small number of very large bets where there is minimal downside risk. Are there any ways in which your approach differs from that of the early Buffett partnerships (or Benjamin Graham's approach), either because you have found ways to improve upon that strategy or because the investing world has changed since then?<br /><br />Mohnish Pabrai: The similarity between Pabrai Funds and the Buffett Partnerships that I refer to is related to the structure of the partnerships. I copied Mr. Buffett's structure as much as I could since it made so much sense. The fact that it created a very enduring and deep moat wasn't bad either. These structural similarities are the fees (no management fees and 1/4 of the returns over 6% annually with high water marks), the investor base (initially mostly close friends and virtually no institutional participation), minimal discussion of portfolio holdings, annual redemptions and the promotion of looking at long term results etc. Of course, there is similarity in investment style, but as Charlie Munger says, "All intelligent investing is value investing."<br /><br />My thoughts on this front are covered in more detail in Chapter 14 of The Dhandho Investor.<br /><br />Regarding the investment style, Mr. Buffett is forced today to mostly be a buy and hold forever investor today due to size and corporate structure. Buying at 50 cents and selling at a dollar is likely to generate better returns than buy and hold forever. I believe both Mr. Munger and he would follow this modus operandi if they were working with a much smaller pool of capital. In his personal portfolio, even today, Mr. Buffett is not a buy and hold forever investor.<br /><br />In the early days Mr. Buffett (and Benjamin Graham) focused on buying a fair business at a cheap price. Later, with Mr. Munger's influence, he changed to buying good businesses at a fair price. At Pabrai Funds, the ideal scenario is to buy a good business at a cheap price. That's very hard to always do. If we can't find enough of those, we go to buying fair businesses at cheap prices. So it has more similarity to the Buffett of the 1960s than the Buffett of 1990s. BTW, even the present day Buffett buys fair businesses at cheap prices for his personal portfolio.<br /><br />Value investing is pretty straight-forward - you try to get $1 worth of assets for much less than $1. There is no way to improve on that basic truth. It's timeless.<br /><br />InvestorGuide: Another possible difference between your style and Buffett's relates to the importance of moats. Your book does emphasize investing in companies that have strategic advantages which will enable them to achieve long-term profitability in the face of competition. But are moats less important if you're only expecting to hold a position for a couple years? Can you see the future clearly enough that you can identify a company whose moat may be under attack in 5 or 10 years, but be confident that that "Mr. Market" will not perceive that threat within the next few years? And how much do moats matter when you're investing in special situations? Would you pass on a special situation if it met all the other criteria on your checklist but didn't have a moat?<br /><br />Pabrai: Moats are critically important. They are usually critical to the ability to generate future cash flows. Even if one invests with a time horizon of 2-3 years, the moat is quite important. The value of the business after 2-3 years is a function of the future cash it is expected to generate beyond that point. All I'm trying to do is buy a business for 1/2 (or less) than its intrinsic value 2-3 years out. In some cases intrinsic value grows dramatically over time. That's ideal. But even if intrinsic value does not change much over time, if you buy at 50 cents and sell at 90 cents in 2-3 years, the return on invested capital is very acceptable.<br /><br />If you're buying and holding forever, you need very durable moats (American Express, Coca Cola, Washington Post etc.). In that case you must have increasing intrinsic values over time. Regardless of your initial intrinsic value discount, eventually your return will mirror the annualized increase/decrease in intrinsic value.<br /><br />At Pabrai Funds, I've focused on 50+% discounts to intrinsic value. If I can get this in an American Express type business, that is ideal and amazing. But even if I invest in businesses where the moat is not as durable (Tesoro Petroleum, Level 3, Universal Stainless), the results are very acceptable. The key in these cases is large discounts to intrinsic value and not to think of them as buy and hold forever investments.<br /><br />InvestorGuide: For that part of our readership which isn't able to invest in Pabrai Funds due to the net worth and minimum investment requirements, to what extent could they utilize your investing strategy themselves? Your approach seems feasible for retail investors, which is why I have been recommending your book to friends, colleagues, and random people I pass on the street. For example, your research primarily relies on freely available information, you aren't meeting with the company's management, and you don't have a team of analysts crunching numbers. To what extent do you think that a person with above-average intelligence who is willing to devote the necessary time would be able to use your approach to outperform the market long-term?<br /><br />Pabrai: Investing is a peculiar business. The larger one gets, the worse one is likely to do. So this is a field where the individual investor has a huge leg up on the professionals and large investors. So, not only can The Dhandho Investor approach be applied by small investors, they are likely to get much better results from its application than I can get or multi-billion dollar funds can get. Temperament and passion are the key.<br /><br />InvestorGuide: You founded, ran, and sold a very successful business prior to starting Pabrai Funds. Has that experience contributed to your investment success? Since that company was in the tech sector but you rarely buy tech stocks (apparently due to the rarity of moats in that sector), the benefits you may have derived seemingly aren't related to an expansion of your circle of competence. But has learning what it takes to run one specific business helped you become a better investor in all kinds of businesses, and if so, how? And have you learned anything as an investor that would make you a better CEO if you ever decide to start another company?<br /><br />Pabrai: Buffett has a quote that goes something like: "Can you really explain to a fish what it's like to walk on land? One day on land is worth a thousand years of talking about it, and one day running a business has exactly the same kind of value." And of course he's said many times that he's a better investor because he's a businessman and he's a better businessman because he is an investor. My experience as an entrepreneur has been very fundamental to being any good at investing.<br /><br />My dad was a quintessential entrepreneur. Over a 40-year period, he had started, grown, sold and liquidated a number of diverse businesses - everything from making a motion picture, setting up a radio station, manufacturing high end speakers, jewelry manufacturing, interior design, handyman services, real estate brokerage, insurance agency, selling magic kits by mail - the list is endless. The common theme across all his ventures was that they were all started with virtually no capital. Some got up to over 100 employees. His downfall was that he was very aggressive with growth plans and the businesses were severely undercapitalized and over-leveraged.<br /><br />After my brother and I became teenagers, we served as his de facto board of directors. I remember many a meeting with him where we'd try to figure out how to juggle the very tight cash to keep the business going. And once I was 16, I'd go on sales calls with him or we'd run the business while he was traveling. I feel like I got my Harvard MBA even before I finished high school. I did not realize it then, but the experience of watching these businesses with a front-row seat during my teen years was extremely educational. It gave me the confidence to start my first business. And if I have an ability to get to the essence of a subset of businesses today, it is because of that experience.<br /><br />TransTech was an IT Services/System Integration business. We provided consulting services, but did not develop any products etc. So it wasn't a tech-heavy business. While having a Computer Engineering degree and experience was useful, it wasn't critical. TransTech taught me a lot about business and that experience is invaluable in running Pabrai Funds. Investing in technology is easy to pass on because it is a Buffett edict not to invest in rapidly changing industries. Change is the enemy of the investor.<br /><br />Being an investor is vastly easier than being a CEO. I've made the no-brainer decision to take the easy road! I do run a business even today. There are operating business elements of running a fund that resemble running a small business. But if I were to go back to running a business with dozens of employees, I think I'd be better at it than I was before the investing experience. Both investing and running a business are two sides of the same coin. They are joined at the hip and having experience doing both is fundamental to being a good investor. There are many successful investors who have never run a business before. My hat's off to them. - For me, without the business experiences as a teenager and the experience running TransTech, I think I'd have been a below average investor. I don't fully understand how they do it.<br /><br />InvestorGuide: Is your investment strategy the best one for you, or the best one for many/most/all investors? Who should or shouldn't consider using your approach, and what does that decision depend on (time commitment, natural talent, analytical ability, business savvy, personality, etc)?<br /><br />Pabrai: As I mentioned earlier, Charlie Munger says all intelligent investing is value investing. The term value investing is redundant. There is just one way to invest - buy assets for less than they are worth and sell them at full price. It is not "my approach." I lifted it from Graham, Munger and Buffett. Beyond that, one should stick to one's circle competence, read a lot and be very patient.<br /><br />InvestorGuide: Some investment strategies stop working as soon as they become sufficiently popular. Do you think this would happen if everyone who reads The Dhandho Investor starts following your strategy? As I've monitored successful value investors I have noticed the same stocks appearing in their various portfolios surprisingly often. (As just one example, you beat Buffett to the convertible bonds of Level 3 Communications back in 2002, which I don't think was merely a coincidence.) If thousands of people start following your approach (using the same types of screens to identify promising candidates and then using the same types of filters to whittle down the list), might they end up with just slightly different subsets of the same couple dozen stocks? If so, that could quickly drive up the prices of those companies (especially on small caps, which seem to be your sweet spot) and eliminate the opportunities almost as soon as they arise. Looked at another way, your portfolio typically has about ten companies, which presumably you consider the ten best investments; if you weren't able to invest in those companies, are there another 10 (or 20, or 50) that you like almost as much?<br /><br />Pabrai: As long as humans vacillate between fear and greed, there will be mispriced assets. Some will be priced too low and some will be priced too high. Mr. Buffett has been talking up the virtues of value investing for 50+ years and it has made very few folks adopt that approach. So if the #2 guy on the Forbes 400 has openly shared his secret sauce of how he got there for all these decades and his approach is still the exception in the industry, I don't believe I'll have any effect whatsoever.<br /><br />Take the example of Petrochina. The stock went up some 8% after Buffett's stake was disclosed. One could have easily bought boat loads of Petrochina stock at that 8% premium to Buffett's last known buys. Well, since then Petrochina is up some eight-fold - excluding some very significant dividends. The entire planet could have done that trade. Yet very very few did. I read a study a few years back where some university professor had documented returns one would have made owning what Buffett did - buying and selling right after his trades were public knowledge. One would have trounced the S&P 500 just doing that. I don't know of any investors who religiously follow that compelling approach.<br /><br />So, I'm not too concerned about value investing suddenly becoming hard to practice because there is one more book on a subject where scores of excellent books have already been written.<br /><br />InvestorGuide: You have said that investors in Pabrai Funds shouldn't expect that your future performance will approach your past performance, and that it's more likely that you'll outperform the indices by a much smaller margin. Do you say this out of humility and a desire to underpromise and overdeliver, or is it based on market conditions (e.g. thinking that stocks in general are expensive now or that the market is more efficient now and there are fewer screaming bargains)? To argue the other side, I can think of at least two factors that might give your investors reason for optimism rather than pessimism: first, your growing circle of competence, which presumably is making you a better investor with each passing year; and second, your growing network of CEOs and entrepreneurs who can quickly give you firsthand information about the real state of a specific industry.<br /><br />Pabrai: Future performance of Pabrai Funds is a function of future investments. I have no idea what these future investment ideas would be and thus one has to be cognizant of this reality. It would be foolhardy to set expectations based on the past. We do need to set some benchmarks and goals to be measured against. If a fund beats the Dow, S&P and Nasdaq by a small percentage over the long-haul they are likely to be in the very top echelons of money managers. So, while they may appear modest relative to the past, they are not easy goals for active managers to achieve.<br /><br />The goals are independent of market conditions today versus the past. While circle of competence and knowledge does (hopefully) grow over time, it is hard to quantify that benefit in the context of our performance goals.<br /><br />InvestorGuide: Finally, what advice do you have for anyone just getting started in investing, who dreams of replicating your performance? What should be on their "to do" list?<br /><br />Pabrai: I started with studying Buffett. Then I added Munger, Templeton, Ruane, Whitman, Cates/Hawkins, Berkowitz etc. Best to study the philosophy of the various master value investors and their various specific investments. Then apply that approach with your own money and investment ideas and go from there.<br /><br />------------------------<br />Buffett Succeeds at Nothing<br /><br />http://www.fool.com/portfolios/rulemaker/2002/rulemaker021030.htm<br /><br />By Mohnish Pabrai<br />10/30/2002<br /><br />Editor's Note: Occasionally, we like to feature articles from readers in this space. Mohnish Pabrai, the managing partner of Pabrai Investment Funds and mpabrai on the Fool discussion boards, offers his view on the difficulty investors have -- professional and individual alike -- in just sitting still.<br /><br />Seventeenth century French scientist Blaise Pascal is perhaps best remembered for his contributions to the field of pure geometry. In the 39 years that he lived, he found time to invent such modern day fundamentals as the syringe, the hydraulic press, and the first digital calculator. And, if that weren't enough, he was also a profound philosopher. One of my favorite Pascal quotes is: "All man's miseries derive from not being able to sit quietly in a room alone."<br /><br />I've often thought that Pascal's words, slightly adapted, might apply well to a relatively new subset of humanity: "All portfolio managers' miseries derive from not being able to sit quietly in a room alone."<br /><br />Why should portfolio managers sit and do nothing? And why would that be good for them? Well, let's start with the story of D.E. Shaw & Co. Founded in 1988, Shaw was staffed by some of the brightest mathematicians, computer scientists, and bond trading experts on the planet. Jeff Bezos worked at Shaw before embarking on his Amazon.com(Nasdaq: AMZN) journey. These folks found that there was a lot of money to be made with risk-free arbitrage in the bond markets with some highly sophisticated bond arbitrage trading algorithms.<br /><br />Shaw was able to capitalize on minuscule short-term inefficiencies in the bond markets with highly leveraged capital. The annualized returns were nothing short of spectacular -- and all of it risk-free! The bright folks at Shaw put their trading on autopilot, with minimal human tweaking required. They came to work and mostly played pool or video games or just goofed off. Shaw's profit per employee was astronomical, and everyone was happy with this Utopian arrangement.<br /><br />Eventually, the nerds got fidgety -- they wanted to do something. They felt that they had only scratched the surface and, if they only dug deeper, there would be more gold to be mined. And so they fiddled with the system to try to juice returns.<br /><br />What followed was a similar path taken by Long-Term Capital Management (LTCM), a fund once considered so big and so smart on Wall Street that it simply could not fail. And yet, when economic events that did not conform to its historical model took place in rapid succession, it nearly did just that. There was a gradual movement from pure risk-free arbitrage to playing the risky arbitrage game in the equity markets. A lot more capital could be deployed, and the returns looked appealing. With no guaranteed short-term convergence and highly leveraged positions, the eventual result was a blow-up that nearly wiped out the firm.<br /><br />Compared to nearly any other discipline, I find that fund management is, in many respects, a bizarre field --where hard work and intellect don't necessarily lead to satisfactory results. As Warren Buffett succinctly put it during the 1998 Berkshire Hathaway(NYSE: BRK.A) annual meeting: "We don't get paid for activity, just for being right. As to how long we'll wait, we'll wait indefinitely!"<br /><br />Buffett and his business partner Charlie Munger are easily among the smartest folks I've come across. But, as we've seen with Shaw and LTCM, a high I.Q. may not lead to stellar investing results. After all, LTCM's founders had among them Nobel Prize-winning economists. In the long-run, it didn't do them much good. In fact, they outsmarted themselves. In a 1999 interview with BusinessWeek, Buffett stated:<br /><br /> Success in investing doesn't correlate with IQ -- once you're above the level of 25. Once you have ordinary intelligence, what you need is the temperament to control the urges that get other people into trouble in investing. <br /><br />Events at Shaw and LTCM show that high-IQ folks have a hard time sitting around contemplating their navels. The problem is that once you engage in these intellectually stimulating problems, you're almost guaranteed to find what you think are the correct answers and act upon them -- usually leading to bad results for investors.<br /><br />Having observed Buffett and Munger closely over the years, and gotten into their psyche through their speeches and writings, it is clear to me that, like the folks at Shaw and LTCM, both men need enormous doses of intellectual stimulation as part of their daily diet. How do they satisfy this intellectual hunger without the accompanying actions that get investors into trouble?<br /><br />Consider the following:<br /><br />While Buffett plays bridge (typically 10-20 hours per week), Munger spends his time mostly on expanding his worldly wisdom and constantly improving his latticework of mental models. He is a voracious reader of intellectually engaging books on a variety of subjects, ranging from the various Ice Ages to The Wealth and Poverty of Nations. He spends considerable time in applying perspectives gained from one field of study into other disciplines -- especially capital allocation.<br /><br />At the Wesco(AMEX: WSC) annual meeting this year, Munger acknowledged that the first few hundred million dollars at Berkshire came from "running a Geiger counter over everything," but the subsequent tens of billions have come from simply "waiting for the no-brainers" or, as Buffett puts it, "waiting for the phone to ring."<br /><br />Buffett still has a tendency to run his Geiger counter over lots of stuff. It's just too enticing intellectually not to. How does he avoid getting into trouble? I believe there are three reasons:<br /><br />1. Running the Geiger counter can work very well if one knows when to run it. Reflect on the following two quotes:<br /><br />In 1970, showing his dismay at elevated stock prices, Buffett said: "I feel like a sex-starved man on a deserted island."<br /><br />In 1974, expressing his glee at the low levels to which the market had fallen, he said: "I feel like a sex-starved man in a harem filled with beautiful women!"<br /><br />By 1970, he had terminated his partnership and made virtually no public market investments until 1974. The P/E ratio for the S&P 500 dropped from 20 to 7 in those four years. By 1974, he had acknowledged selling "stocks he'd bought recently at 3 times earnings to buy stocks selling at 2 times earnings."<br /><br />Then, from 1984-1987, Buffett did not buy a single new equity position for the Berkshire portfolio. Berkshire Hathaway was sitting on a mountain of cash, and still he did nothing. In the latter half of 1987, Berkshire used that cash pile to buy over a billion dollars' worth of Coca-Cola(NYSE: KO), over 5% of the company. He invested 25% of Berkshire Hathaway's book value in a single company that they did not control!<br /><br />What were Buffett and Munger doing from 1970-1973 and 1984-1987? Both men realize that successful investing requires the patience and discipline to make big bets during the relatively infrequent intervals when the markets are undervalued, and to do "something else" during the long periods when markets are fully priced or overpriced. I'm willing to bet that Buffett was playing far more bridge in 1972 than he was in 1974.<br /><br />2. The Geiger counter approach works better in smaller, under-followed companies and a host of special situations. Given their typical smaller size, investing in these companies would do nothing for Berkshire Hathaway today. So Buffett usually makes these investments for his personal portfolio. A good example is his recent investment in mortgage REIT Laser Mortgage Management (LMM), where there was a decent spread between the liquidation value and quoted stock price. These LMM-type investments are significant for Buffett's personal portfolio and, more importantly, soak up intellectual horsepower that might lead to not-so-good results at Berkshire Hathaway.<br /><br />Being versatile, he moves his Geiger counter away from the equity markets to other bastions of inefficiency whenever the public markets get overheated. These include high-yield bonds (Berkshire bought over $1 billion worth of Finova bonds at deep discounts in 2001), REITs (bought First Industrial Realty in 2000 for his own portfolio at a time when REIT yields were spectacular), or his recent investing adventures in silver.<br /><br />3. The Munger/Buffett relationship is an unusual one. Both men are fiercely independent thinkers, and both prefer working alone. When Buffett has an investment idea, after it makes it through his filter, he usually runs it past Munger. Munger then applies his broad latticework of mental models to find faults with Buffett's ideas, and shoots most of them down. It is the rare idea that makes it past Buffett, and it has to be a total no-brainer to make it past both of them.<br /><br />The Buffett/Munger approach of multi-year periods of inactivity contrasts starkly with the frenzied activity that takes place daily at the major exchanges. Which brings me back to the fundamental question: Why have we set up portfolio managers as full-time professionals with the expectation that they "do something smart" every day? The fund management industry needs to reflect on Pascal's potent words and how Warren Buffett and Charlie Munger have figured out how to sit quietly alone in a room, indefinitely.<br /><br />Guest writer Mohnish Pabrai is the managing partner of Pabrai Investment Funds, an Illinois-based value-centric group of investment funds. He owns shares of Berkshire Hathaway. You can email him at mpabrai@pabraifunds.com, or find him on the Rule Maker discussion boards. To read his other writings, visitwww.pabraifunds.com. The Motley Fool is investors writing for investors.<br />--------------------------------<br />Mohnish Pabrai’s portfolio is not perfect because of what is inside, but rather because of how the fund is assembled. Pabrai is the managing partner of the Pabrai Investment Funds, a partnership with $500 million under management. Besides the 29% returned annually to partners, Pabrai has designed brilliant portfolio concepts.<br /><br />Incalculable amounts of time are spent studying which investments to buy, but very little time is spent thinking about how much. The decision is usually left up to the investor’s confidence in the investment, something that has been shown to be unstable. The truth is, deciding how much to buy can have a large impact on a portfolio, occasionally just as much as what is bought. There are copious amounts of information on what to buy, but very little on how much.<br /><br />To combat his untrustworthy feelings of self-confidence, Pabrai developed a new “portfolio theory.” I will call it the ten by ten portfolio. Ten investments that each make up ten percent of the portfolio. Pabrai holds between seven and fifteen different investments, but appears to stay close to the ten by ten benchmark. The fund is difficult to proportion perfectly, because a stock can run up before a full lot has been purchased or because a previous position has already advanced.<br /><br />The proportioned ten by ten portfolio has other, less obvious effects. The benchmark percentage ensures the investor is confident enough to place 10% of their holdings in the investment. If they aren’t, then they should not invest at all. Simply put, the portfolio attempts to ensure only the best ideas get in.<br /><br />As Buffett says repeatedly:<br />“ When making investments, pretend in life you have a punch-card with only 20 boxes, and every time you make an investment you punch a slot. It will discipline you to only make investments you have extreme confidence in.”<br /><br />Additionally, a portfolio with ten stocks is focused enough to be able to beat the market, but not so focused that one wrong pick means the death of the whole fund. Pabrai admits he knows he is not as good a judge as Warren Buffett, who put nearly his entire wealth into GEICO stock at a young age. Therefore, if Pabrai is wrong, his fund can still do quite well. He has been wrong in the past ten years, while still returning nearly thirty percent per year after expenses.<br /><br />Pabrai gave the following portfolio as an example at his 2005 annual meeting. He provided the following information to demonstrate how the ten by ten portfolio will do well even with some bad investment decisions.<br /><br /> <br /> <br /><br />Invested<br /> <br /><br />Returned<br /><br />Holding 1<br /> <br /><br />$100<br /> <br /><br />$10<br /><br />Holding 2<br /> <br /><br />$100<br /> <br /><br />$50<br /><br />Holding 3<br /> <br /><br />$100<br /> <br /><br />$100<br /><br />Holding 4<br /> <br /><br />$100<br /> <br /><br />$100<br /><br />Holding 5<br /> <br /><br />$100<br /> <br /><br />$180<br /><br />Holding 6<br /> <br /><br />$100<br /> <br /><br />$180<br /><br />Holding 7<br /> <br /><br />$100<br /> <br /><br />$180<br /><br />Holding 8<br /> <br /><br />$100<br /> <br /><br />$200<br /><br />Holding 9<br /> <br /><br />$100<br /> <br /><br />$200<br /><br />Holding 10<br /> <br /><br />$100<br /> <br /><br />$300<br /><br /> <br /> <br /><br />$1,000<br /> <br /><br />$1,500<br /><br /> <br /><br />He went on to explain that if the above returns took three years to achieve; the fund would have an annual return of 14.5%. If the returns took two years to achieve, the fund would have returned 22.5% per year and if only one year passed, the return would be 50%.<br /><br />Another Pabrai concept is the “placeholder.” He contends that money sitting in the bank is actually risky because of the potentially declining dollar. Economically speaking, this is true. To combat the risk, Pabrai believes one should invest the cash in something safe, yielding enough return value. Currently, he is using Berkshire Hathaway as a placeholder until he finds other cheaper investments. Putting the money in the hands of the world’s greatest investor seems like a better idea than leaving dollars in the bank.<br /><br />A past placeholder returned an annualized rate of about 116%. In mid October of 2004, Pabrai began buying Canadian Oil Sands, a company that owns 35% of Syncrude, when oil was forty dollars a barrel. The stock price was still undervalued by over 25% in comparison to the price of oil at the time, and appeared to value the company as if oil was never going to rise. In essence, Pabrai decided to take his cash and buy crude oil reserves at thirty dollars instead. He believed this to be a “productive commodity hedge against a declining dollar.”<br /><br />He began buying the stock at forty-eight dollars and eighty one cents. Over an average of fourteen months, Pabrai had realized a gain of 145%.<br /><br />His rational was stunningly simple. If oil prices did not rise, Pabrai did well from the dividend he was collecting. If prices rose to forty or fifty dollars a barrel, then he won big. Oil as it turned out climbed around sixty dollars and Pabrai began selling. He had invested in a stock that appeared to have little risk, was already selling at a decent discount, and had a catalyst to rise a great deal in the future.<br /><br />Pabrai knows the dollar over time will likely decrease in value, and he has developed a concept to protect his portfolio from the risk. He has chosen to buy commodities or other safe companies that will be a better steward of his cash.<br /><br />The last part to Pabrai’s portfolio is actually the first concept he addresses when researching an investment and is unique to the Pabrai Investment Funds.<br /><br />In an article published on February ninth, 2004, Pabrai explains what he calls the “Yellowstone Factor”. He explained that Yellowstone national park is actually one large volcano that statistically speaking erupts every six hundred thousand years, with enough force to kill everyone within 700 miles. An eruption has not occurred in six hundred and thirty thousand years.<br /><br />Therefore Pabrai explains, no matter how small the probability an event might occur, the risk must be taken into consideration. He goes on to point out that no business on earth is totally risk free. There is always a Yellowstone.<br /><br />Before Pabrai makes any investment, he will “first fixate on what factors can cause the investment to result in a significant permanent loss of capital”. He believes simple estimations or “back of the envelope accounting” is all that is required. Similar probabilities can be assigned to other kinds of risk such as accounting fraud.<br /><br />While the analogy of Yellowstone erupting is interesting, the message is paramount. Consider all possible risks of loss and ascribe a probability of the event occurring.<br /><br />To reduce risk as much as possible, Pabrai ensures his holdings have little overlap. For instance, he will usually only hold one investment in the oil industry. He can minimize industry specific risk effectively by isolating his holdings.<br /><br />Pabrai has simplified portfolio design with straightforward concepts. He has whittled Buffett’s ideas into easily followed rules. By limiting holdings, hedging against the declining dollar, and estimating risk, Pabrai has developed a portfolio that will certainly improve any investor’s performance. <br />-----------------------------<br />Mohnish Pabrai, is Managing Partner of Pabrai Investment Funds, a group of focused value funds. Since inception in 1999 with $1 million, Pabrai Funds has grown to over $500 million in assets under management. Pabrai is the author of two books on value investing,Mosaic andThe Dhandho Investor.<br /><br />Mohnish Pabrai’s talk centers on checklists for investing. Mohnish “highly, highly recommends reading Dr. Atul’s book,The Checklist Manifesto: How to Get Things Right.”<br /><br />In 1935 when the US was looking for next bomber, Boeing invented the B-17 bomber widely exceeded everything the army had previously put out, however they had a test run and two pilots died.<br /><br />Boeing went back to look at what happened. And they realized that this was too complex. So Boeing engineers came up with a checklist. Afterwards the plan had a flawless bomber.<br /><br />Today the aviation check list has become very organized, and the pilots are trained to live and die by that checklist.<br /><br />The list is highly practical and easy to understand. The checklist is extensively researched and is stimulated by flight simulators to see if anything should be added or subtracted.<br /><br />In America there are five million lines inserted into America in ICUs. About 80% of these line insertions led to infection, of which 20-25% of which were fatal.<br /><br />A doctor in John Hopkins had nurses stand by the doctors before line insertions.<br /><br />He listed five points in his check list which are all pretty basic thinks like washing hands with soaps before line insertions.<br /><br />Nurses noticed that a lot of these rules were missed, so he had the nurses make sure the doctor kept to the five rules. After this happened the amount of infections went down to zero. He took this approach to other hospitals. And nowadays this procedure has become standard in US hospitals.<br /><br />The FAA is actually one of the most successful agencies.<br /><br />The FAA has very little to do with actual flights, they only go into action when an accident occurs. The FAA gets down of what happened. Bird hits happen to be a major problem for airplanes. When the Hudson crash occurred due to the Canadian geese, the FAA made sure to keep better track of Canadian Geese.<br /><br />Flying is very cheap and safe. However, the nuclear industry took a different approach which was not pragmatic and could not tolerate a single human life. And we are praying the price 20 years later.<br /><br />Mohnish found that the FAA approach could be used in investing. He compares a crash to a loss of capital.<br /><br />Mohnish started building an investment checklist. He looked at mistakes Warren Buffett and Charlie Munger made and mistakes by other great value investors.<br /><br />Mohnish compiled a list of 70 items two years ago. Since then Mohnish has achieved a zero error rate. However, Mohnish warns there are bound to be errors in the future.<br /><br />Mohnish looked at many the great fund’s 13Fs from 2004 to see approximately what their buy price and look at their sell price. He analyzed twelve investors and came up with a list of 320 companies that these investors lost money in totaling $20 billion. He looked at why they might have bought and sold these securities.<br /><br />He picked 26 of the 320 companies and looked in depth at them. He only looked at three financial companies to diversify across industries. Now Mohnish is up to 97 points in his checklist.<br /><br />Mohnish quotes Jack Welsh as stating that GE will only be in an industry where they are number one or two.<br /><br />HP and Lexmark had a duopoly in printers. Oakmark and Davis Funds lost a lot of money in Lexmark.<br /><br />However, if you looked at checklist you likely would have avoided this investment. Lexmark was more similar to Schick than to Gillette.<br /><br />One are with the largest area of mistakes has to do with moats. The question that must be asked is if the moat is sinking. LongLeaf lost $550 million in Sun Micro systems.<br /><br />There was a huge decrease in computer prices over the past few years, plus a shift from desktops to laptops this affected Dell a lot. LongLeaf, and Fairfax had some pain in that company.<br /><br />LongLeaf bought GM thinking that GM owned the truck business. When gas went to $4, GM was decimated. One of the checklist items is to look at what other factors can affect a moat in this case being commodity prices.<br /><br />There are give categories in the check list:<br /><br />Personal biases are a small part.<br /><br />Leverage, Management, Moat and valuation are the main four items of the checklists.<br /><br />The checklist highlights the possible main failure points. But there will never be an investment that will fit all 97 items.<br /><br />Mohnish is currently building a cheap Japanese basket of cheap stocks. Mohnish believes there is a great opportunity in that market. Despite the fact that it is hard to invest in the low cap and micro cap Japanese stocks.<br /><br />Mohnish does not currently have a checklist for selling.<br />-------------------------------<br /><br />Forbes.com<br /><br /><br />Intelligent Investing Transcript<br />Transcript: Mohnish Pabrai<br />Steve Forbes, 04.12.10, 6:00 AM ET<br /><br />Lessons From Buffett<br /><br />Steve Forbes: Mohnish, thank you very much for joining us today.<br /><br />Mohnish Pabrai: You're most welcome.<br /><br />Forbes: You are one of the noted value investors, one of those who is an admirer of Warren Buffett. What did you take from Warren Buffett? And what do you do differently from Warren Buffett? You're not a clone.<br /><br />Pabrai: Well, you know, we will never have another Warren. I think Warren is a very unique person. And also, I think that his investing prowess is so strong that many of his other attributes and, I would say, his other qualities get ignored. I believe the best things about Warren have nothing to do with investing. But they have everything to do with leading a great life. So many of the things, I think, most of the great things I've taken from Warren have more to do with life than investing.<br /><br />Forbes: Such as?<br /><br />Pabrai: Well, such as, you know, how to raise a family, interaction with friends, the importance of keeping your ego in check. You know, humility. Just a whole bunch of different attributes. The importance of candor, the importance of integrity. Just all these, the soft skills that are very important in life.<br /><br />Forbes: They do interconnect. Now, in terms of how you approach an investment, you, I think, probably pay more attention to intangibles than perhaps Warren Buffett or Ben Graham might have done.<br /><br />Pabrai: Well, Warren pays attention to intangibles, but Ben Graham was very much a tangible guy. And yeah, so we're looking at the qualitative as well as the quantitative. And yeah, so I would say that one way to look at that is to consider what Charlie Munger would call his latticework of mental models. So when you look at a business, look at it in a broader context of how it fits into the world. And sometimes, if you can see it in a light that the world is not seeing it in, that can give you an edge.<br /><br />Forbes: Munger also said, "You have three choices: yes, no, or too difficult." You subscribe to that too.<br /><br />Pabrai: That's right. And 98% is too difficult.<br /><br />Find Deep Moats<br /><br />Forbes: So that gets to knowing your areas of competency. You share Warren Buffett's antipathy to technology. Not that you dislike it, but you just don't feel you're going to bring value added there.<br /><br />Pabrai: Yeah, you know, my degrees are in computer engineering. I spent a lot of time in the tech industry. And I like to say that I don't invest in tech because I spent time in it. And I saw firsthand that the durability of technology moats is many times an oxymoron.<br /><br />Forbes: Now quickly define moats, in terms of a business that keeps the competition away.<br /><br />Pabrai: Well, you know, if you talk to Michael Porter, he would give you five books on what is meant by, you know, strategy and competitive advantage and durable competitive advantage. And if you talk to Warren and Charlie, they would just say it's a moat. And they'd break it down to one word. But basically it's the ability of a business to have some type of an enduring competitive advantage that allows it to earn a better-than-average rate of return over an extended period of time. And so some businesses have narrow moats. Some have broad moats. Some have moats that are deep but get filled up pretty quickly. So what you want is a business that has a deep moat with lots of piranha in it and that's getting deeper by the day. That's a great business.<br /><br />Invest Leisurely<br /><br />Forbes: So summing up in terms of what do you think do you bring to value investing that others perhaps don't, that give you a unique edge?<br /><br />Pabrai: I think the biggest edge would be attitude. So you know, Charlie Munger likes to say that you don't make money when you buy stocks. And you don't make money when you sell stocks. You make money by waiting. And so the biggest, the single biggest advantage a value investor has is not IQ; it's patience and waiting. Waiting for the right pitch and waiting for many years for the right pitch.<br /><br />Forbes: So what's that saying of Pascal that you like about just sitting in a room?<br /><br />Pabrai: Yeah. "All man's miseries stem from his inability to sit in a room alone and do nothing." And all I'd like to do to adapt Pascal is, "All investment managers' miseries stem from the inability to sit alone in a room and do nothing."<br /><br />Forbes: So you don't feel the need to pick 10 stocks a quarter or one stock a quarter, just what turns up?<br /><br />Pabrai: You know, actually, I think that the way the investment business is set up, it's actually set up the wrong way. The correct way to set it up is to have gentlemen of leisure, who go about their leisurely tasks, and when the world is severely fearful is when they put their leisurely task aside and go to work. That would be the ideal way to set up the investment business.<br /><br />Forbes: Does this tie into your ideas and other value investors' ideas of low risk, high uncertainty?<br /><br />Pabrai: That's right. I mean, I think the low risk, high uncertainty is really something I borrowed from entrepreneurs, and you know, the Patels in India or the Richard Bransons of the world. Basically if you study entrepreneurs, there is a misnomer: People think that entrepreneurs take risk, and they get rewarded because they take risk. In reality entrepreneurs do everything they can to minimize risk. They are not interested in taking risk. They want free lunches and they go after free lunches. And so if you study any number of entrepreneurs, from Ray Kroc to, you know, Herb Schultz at Starbucks and to even Buffett and Munger and so on, what you'll find is that they have repeatedly made bets which are low-risk bets, which have high-return possibilities. So they're not going high risk, high return. They're going low risk, high return.<br /><br />And even with Bill Gates, for example. The total amount of capital that ever went into Microsoft was less than $50,000, between the time it started and today. That's the total amount of capital that went into the company. So Microsoft you cannot say was a high-risk venture because there was no capital deployed. But it had high uncertainty. Bill Gates could have gone bankrupt. Or Bill Gates could have ended up the wealthiest person on the Forbes 400. And he ended up at the extreme end of the bell curve, and that's fine. But he did not take risk to get there. He was comfortable with uncertainty. So entrepreneurs are great at dealing with uncertainty and also very good at minimizing risk. That's the classic great entrepreneur.<br /><br />Low Risk, Low Capital<br /><br />Forbes: This is your almost third career. And this idea you have on uncertainty and risk. You started a company. It worked. You sold it. You started another company. It did not work. What did you learn from that that gave you insights on investing that, those that had not been in the trenches, don't bring?<br /><br />Pabrai: Well the first company took no capital and generated an enormous amount of capital for me. Then I got fat, dumb and happy and my second company, I put in a lot of capital.<br /><br />Forbes: You thought you knew what you were doing.<br /><br />Pabrai: And I violated the low risk, high uncertainty principle. I got my head handed to me. And I got that seared heavily in my psyche. And now the third business, if you call Pabrai Funds a business--I call it a "gentleman of leisure" activity--but Pabrai Funds is, again, low risk, high uncertainty in the sense that there is no downside. It never took capital. So it's a great business.<br /><br />Forbes: So as a gentleman of leisure, is that why you take a nap each day at 4 p.m.?<br /><br />Pabrai: There's nothing better. Do you have a nap room?<br /><br />Forbes: I wish.<br /><br />Pabrai: You know, when I went to Warren's Berkshire headquarters last year, my friend Guy asked Warren, he said, "Warren, Mohnish has a nap room in his office. Do you have a nap room?" And Warren's answer was, "Yes." OK, so I was surprised. So I said, "Warren, you're telling me in Kiewit Plaza, there's a nap room for you." He says, "Yes." He says, "Not every day, but every once in a while, I need to go to sleep in the afternoon."<br /><br />Forbes: Well there's something to that. My father called it having a conference.<br /><br />Pabrai: That's right. No, it does wonders. I have a hard time getting past the day without the nap, so the nap is a must.<br /><br />Forbes: So having those two experiences--no capital, then as you say, fat and happy and then you got your head handed to you--when you look at an equity, when you look at a possibility, what are those experiences, give what insight do you get from those experiences.<br /><br />Pabrai: Well, the insight is the same, in the sense that I think that, you know, Warren says that I'm a better investor because I'm a businessman, and I'm a better businessman because I'm an investor. So the thing is that my experiences as a businessman have very direct, long-term positive impacts on me as an investor, because when I'm looking at an investment, I now look at it like the way I looked at my first business, which is, the first thing I'm looking at is, how can I lose money on this? And can I absolutely minimize my downside?<br /><br />The upsides will take care of themselves. It's the downsides that one needs to worry about, which is why even the checklist becomes important. But so the important thing that value investors focus on is downside protection. And that's exactly what entrepreneurs focus on--what is my downside? So that is the, I would say, the crossover between entrepreneurship in investing, and value investing especially, is protecting your downside.<br /><br />Pabrai's Fees<br /><br />Forbes: Now you're a hedge fund manager, but you're unusual. First, your fee structure. Explain that.<br /><br />Pabrai: Well you know, my fee structure, one of my attributes about a great investor is be a copycat. Do not be an innovator.<br /><br />Forbes: What's it, pioneers take the arrows?<br /><br />Pabrai: Yeah. When I started Pabrai Funds, I actually didn't know anything about the investing business. And the only, if you can call it a hedge fund, that I was familiar with was the Buffett partnerships. And when I looked at the Buffett partnerships, I found that Warren Buffett charged no management fees. He took 25% of the profits, after a 6% hurdle. And all of that made all the sense in the world to me, because I felt it aligned my interests completely with my investors. So I said, "Why mess with perfection? Let's just mirror it." And that's what I did. And what I didn't realize at the time--it took me a few years to realize it--is that that mirroring created an enormous moat for Pabrai Funds. Because the investors who joined me will never leave, because it's the first question they ask any other money manager they go to work for or they want to put money with is, "What is your fee structure?"<br /><br />When they hear the fee structure, they say, "I'm just going to stay where I am." And so first of all, it creates a moat where the existing investors do not want to leave. And the new ones who join the church are happy to join.<br /><br />Forbes: You're also unusual in another way. You don't seem to go out of your way to woo institutional investors.<br /><br />Pabrai: Yeah, I mean, I think I'm looking for people who want to invest their family assets for a long period of time. I really don't want investors who are looking at putting things into style buckets or going to look at allocations every quarter or might need to redeem in a year and those sorts of things. So their frameworks are very different. So in general--<br /><br />Forbes: So someone who comes with you is a minimum of, what, two years, three years, what, before you allow them an exit?<br /><br />Pabrai: Our exits are annual. So people can get out once a year. But what we suggest to them is to not invest if they don't have at least a five-year horizon. But we don't impose any, because people can have hardships. They can have all kinds of things happen.<br /><br />Forbes: Now, low cost, one of the things that apparently institutional investors are flummoxed by is, it's you.<br /><br />Pabrai: Our total expenses for running the funds, which the investors get charged for, is between 10 and 15 basis points a year. That's what they pay for, for all the accounting, audit, tax, administration and everything. They don't pay for my salary or my staff's salary. We take that out of the performance fees. And they only pay the performance fees after 6%. So what a deal.<br /><br />Forbes: Now, you're not big on schmoozing investors.<br /><br />Pabrai: You know, I think the thing is that every business ought to figure out who their ideal customer is.<br /><br />And at Pabrai Funds, what I've found is that investors who do their own homework find me and do the research on me on their own, without any middlemen involved, and then invest in Pabrai Funds like Amazon--which is wire the money and send the forms--tend to be the best investors. In fact the investor base we have is mostly entrepreneurs who created their wealth themselves. And they're very smart. And they're in a wide range of industries. In fact, my analyst pool is my investor base. So I have investors in all kinds of industries. And when I'm looking at investment ideas in particular industries, I can call them. And I get the best analysts at the best price with no conflict of interest. So it works out great.<br /><br />Forbes: Free. That sounds really good. They pay you.<br /><br />Pabrai: Yeah, exactly. It's great.<br /><br />Forbes: You're not even registered with the SEC?<br /><br />Pabrai: I think the hedge funds so far have not had to. I don't know if the rules will change. If the rules change, of course, we'll follow the rules. But you know, we have audits by Pricewaterhouse. We have to report 13fs to the SEC. So I think there's plenty of disclosure and transparency.<br /><br />Forbes: You also don't engage in things like short-selling.<br /><br />Pabrai: You know, why would you want to take a bet, Steve, where your maximum upside is a double and your maximum downside is bankruptcy? It never made any sense to me, so why go there?<br /><br />Forbes: You focus on a handful of individual investors, maybe institutional investors, but people who know you, are with you.<br /><br />Pabrai: Right.<br /><br />Forbes: You're not part of a formula, not spit out of a computer.<br /><br />Pabrai: That's right.<br /><br />Use Index Funds<br /><br />Forbes: What's an individual investor to do? You have some unique advice for individual investors.<br /><br />Pabrai: Well the best thing for an individual investor to do is to invest in index funds. But even before we go there, you know, Charlie Munger was asked at one of the Berkshire annual meetings by a young man, "How can I get rich?" And Munger's response was very simple. He said, "If you consistently spend less than you earn and invest it in index funds, dollar-cost average," because you're putting in money every paycheck, he said, "that in, what, 20, 30, or 40 years, you can't help but be rich. It's just bound to happen."<br /><br />And so any individual investor, if they just put away 5%, 10%, 15% of their income every month, and they just bought into the low-cost index funds, and just two or three of them, to split it amongst them--you're done. There's nothing else to be done. Now if you go to active managers, the stats are pretty clear: 80% to 90% of active managers underperform the indexes. But even the 10% or 20% who do, only one in 200 managers outperforms the index consistently by more than 3% a year. So the chances that an individual investor will find someone who beat the index by more than 3% a year is less than 1%. It's half a percent. So it's not worth playing that game.<br /><br />Forbes: And in terms of index funds, S&P 500 or--<br /><br />Pabrai: I'd say Vanguard is a great way to go. I think you could do S&P 500 index. You could do the Russell 2000. And if you wanted to, you could do an emerging-market index. But you know, I think if you just blend those three, one-third each, you're done. And if you're in your 20s and you start doing this, you don't need to even go into bonds and other things. You can just do this for a long time and you'll be fine.<br /><br />Don't Go in the Roach Motel<br /><br />Forbes: On TV when these folks make recommendations--you compare it to if you buy something that you heard somebody recommend on TV as going into the roach motel. Can you please explain?<br /><br />Pabrai: Well you know, you remember those ads that ran where the roaches check in.<br /><br />Forbes: Yup.<br /><br />Pabrai: But they never check out. So the thing is, you watch some talking head on TV. And he tells you, "Go buy whatever company, Citigroup."<br /><br />When its price gets cut in half, he's nowhere to be found. And now you're like that roach in the roach motel and you don't know what to do. You don't know whether you should hang on or sell or stay. So the only reason--<br /><br />Forbes: Or if it goes up, do I get out? Do I wait?<br /><br />Pabrai: Yeah, yeah. If it goes up 10% or 50% or 100%, what are you supposed to do? Do you want to go for long-term gain, short-term gains? Basically you have no road map. So the only way one should buy stocks is if you understand the underlying business. You stay within the circle of competence. You buy businesses you understand.<br /><br />And if you understand the business, you understand what they're worth. And that's the only reason you are to buy a stock.<br /><br />The Chinese Books<br /><br />Forbes: And looking around the world, you made mention I think in the past, if you want an index fund with the emerging markets, OK. But you have us take a skeptical eye to investing in other countries around the world. You don't preclude it, but you see some risks.<br /><br />Pabrai: Well, you know, Steve, there's plenty of great opportunities in many countries. But I would say it's probably a no-brainer to avoid Russia, Zimbabwe. And even if you look at a place like China, which I think will create incredible amount of wealth for humanity in this century, the average Chinese company has three sets of books.<br /><br />You know, one for the government, and one for the owner's wife and one for the owner's mistress. And so the problem you have is you don't know which set of books you're looking at. And so I think in Chinese companies, or even in Indian companies, there you have to add another layer, which is you have to handicap the ethos of management. And that can get very hard, especially when someone like me is sitting in Irvine with naps in the afternoon, trying to figure that out.<br /><br />Forbes: You also say you don't think you get much talking to CEOs, because they're in the business of sales.<br /><br />Pabrai: Yeah, you know, the average CEO, first of all, the average public CEO is a person you'd be happy to have your daughter marry, any five of them. But they got to those positions because they have charisma and they are great salespeople. Now you cannot lead, you cannot be a leader, without being an optimist. So CEOs are not deceitful. I think they are high-integrity people. But if you sit down with a high-charisma CEO of an oil company, and he knows everything about oil and you know nothing about oil, by the time you finish that meeting, you just want to run out and buy all the stock of his company that you can. And it's just not the right way to go about it. So you're better off not taking the meeting, but looking at what he's done over the last 10 or 15 or 20 years. So not being mesmerized by charisma will probably help you.<br /><br />Forbes: And what areas are you looking at right now? You remember back in 1968, '69, we did a story on Buffett when he was fairly unknown. And he was getting out of the market, height of the bull market of the '60s. Five years later after the crash of '73, '74, we went out to see him again, to see what he was saying after the market had gone down 50%, 60%. And he politically incorrectly said that he felt like a sex maniac in a harem because of all the bargains around.<br /><br />Pabrai: Right.<br /><br />Forbes: You've probably had the same feeling a year ago. What do you see? How does the harem look now?<br /><br />Pabrai: That's right. In 1969 Warren told you "I feel like a sex-starved man on a deserted island." And in '74, that deserted island had become a harem. Well nowadays, we're twiddling our thumbs. It's good that I enjoy playing racquetball and bridge and so on. So there's a lot of bridge. There's a lot of racquetball. And you know, I have an eye out on the markets, but there's just not a whole lot of value presently. But value can show up tomorrow, for example. So we're not in a hurry. Happy to have a leisurely lifestyle and wait for the game to come to us.<br /><br />Make Checklists<br /><br />Forbes: So in the first quarter of 2010, did you add any positions?<br /><br />Pabrai: Yeah, actually, we did. We did find. In fact, there's one I'm buying right now. But I found two businesses, but they're anomalies. They were just, you know, businesses that had distress in them because of specific factors. And I think we'll do very well on both of them. They'll go nameless here. But no, I think, for example, in the fourth quarter of 2008 or the first quarter of 2009, you could have just thrown darts and done well. And that is definitely not the case today.<br /><br />Forbes: And finally, telling you about mistakes, one of the things I guess an investor has to realize, they cannot control the universe. Delta Financial: You had done the homework, you fell and then events took it away from you.<br /><br />Pabrai: Well Delta Financial was a full loss for the firm, for the fund. We lost 100% of our investment. It was a company that went bankrupt. And we've learned a lot of lessons from Delta. And one of the lessons was that Delta was, in many ways, a very highly levered company and they were very dependent on a functioning securitization market. And when that market shut down, they were pretty much out of business. And they were caught flat-footed. And so there's a number of lessons I've obviously learned from Delta.<br /><br />It's easier to learn the lessons when you don't take the hits in your own portfolio. But when you take the hits in your own portfolio, those lessons stay with you for a long time.<br /><br />Forbes: So that gets to, you're a great fan of The Checklist Manifesto. And you now have checklists. You said one of the key things is mistakes, in terms of a checklist, so you don't let your emotions get in the way of analyzing. What are some of the mistakes on your checklist now that you go through systematically, even if your gut says, "This is great. I want to do it."<br /><br />Pabrai: Yeah, so the checklist I have currently has about 80 items on it. And even though 80 sounds like a lot, it doesn't take a long time.<br /><br />It takes about 30 minutes to go through the checklist. What I do is when I'm starting a business, I go through my normal process of analyzing the business. When I'm fully done and I'm ready to pull the trigger, that's when I take the business to the checklist. And I run it against the 80 items. And what happens the first time when I run it, there might be seven or eight questions that I don't know the answer to, which is great, which what that means is, "Listen dummy, go find out the answer to these eight questions first." Which means I have more work to do. So I go off again to find those answers. When I have those answers, I come back and run the checklist again. And any business that I look at is going to have some items on which the checklist raises red flags. But the good news is that you're looking in front of you with all your facilities at the range of things that could possibly cause a problem.<br /><br />And when you look at that list, you can also compare it to how those factors correlate with the rest of your portfolio. And at that point, kind of, you have a go, no-go point, where you can say, "I'm comfortable with these risk factors here. I'm comfortable with probabilities. And I'll go ahead with it." Or you can say, "I'm just going to take a pass."<br /><br />And one of the things that came out of running the checklist was I used to run a 10x10 portfolio, which is when I'd make a bet, it was typically 10% of assets. And after I incorporated the checklist and I started to see all the red flags, I changed my allocation. So the typical allocation now at Pabrai Funds is 5%. And we'll go as low as 2%, if we are doing a basket bet.<br /><br />And once in a blue moon, we'll go up to 10%. In fact I haven't done a 10% investment in a long time. And so the portfolio has become more names than it used to have. But since we started running the checklists, which is about 18 months ago, so far it's a zero error rate. And in the last 18 months, it's probably been the most prolific period of making investments for Pabrai Funds. We made a huge number of investments, more than any other period, any other 18-month period in our history. So with more activity so far, and it's a very short period, we have a much lower error rate.<br /><br />I know in the future we will make errors. But I know those errors, the rate of errors will be much lower. And this is key. The thing is that Warren says, "Rule No. 1: Don't lose money. Rule No. 2: Don't forget rule No. 1." OK, so the key to investing is downside protection. The upsides will take care of themselves. But you have to make sure that your losers are few and far between. And the checklist is very central to that.<br /><br />Forbes: Can you give a couple of the things that are on your 80 [item] checklist?<br /><br />Pabrai: Oh yeah, sure. The checklist was created, looking at my mistakes and other investors' mistakes. So for example, there's questions like, you know, "Can this business be decimated by low-cost competition from China or other low-cost countries?" That's a checklist question. Another question is, "Is this a win-win business for the entire ecosystem?" So for example, if there's some company doing, you know, high-interest credit cards and they make a lot of money, that's not exactly, you know, helping society. So you might pass on that. Also, a liquor company or tobacco company, those can be great businesses, but in my book, I would just pass on those. Or a gambling business, and so on.<br /><br />So the checklist will kind of focus you more toward playing center court rather than going to the edge of the court. And there's a whole set of questions on leverage. For example, you know, how much leverage? What are the covenants? Is it recourse or non-recourse? There's a whole bunch of questions on management, on management comp, on the interests of management. You know, just a whole--on their historical track records and so on. So there's questions on unions, on collective bargaining.<br /><br />So you know, and all of these questions are not questions I created out of the blue. What I did is I looked at businesses where people had lost money. I looked at Dexter Shoes, where Warren Buffett lost money. And he lost it to low-cost Chinese competition. So that led to the question. And I looked at CORT Furniture, which was a Charlie Munger investment. And that was an investment made at the peak of the dot-com boom, where they were doing a lot of office furniture rentals. And the question was, "Are you looking at normalized earnings or are you looking at boom earnings?" And so that question came from there. So the checklist questions, I think, are very robust, because they're based on real-world arrows people have taken in the back.<br /><br />Forbes: Terrific. Mohnish, thank you.<br /><br />Pabrai: Well thank you, Steve.<br />-----------------------------<br />Los Angeles hedge fund manager Mohnish Pabrai, 39, seems to have some talent as a stock picker. Since he started Pabrai Investment Funds in 1999, he has delivered a 35.3% compound annual return (after fees), to the 14.2% a year you would have made owning Berkshire shares. <br />There are two reasons the $116 million portfolio has done better than the competition in Omaha. One, says Pabrai, is that he doesn't try to emulate Berkshire's holdings in wholly owned subsidiaries. That has kept him out of property/casualty insurance, which accounts for a big part of Berkshire's revenue and had suffered some setbacks (such as claims from Sept. 11). The other is that he hews a little more closely to the kind of value investing espoused by Buffett's mentor, Benjamin Graham. Graham liked to buy companies for less than net current assets, meaning cash, inventory and receivables minus all obligations. Buffett has pushed the definition of intrinsic value in new directions. He is willing to pay for intangibles, like a consumer brand name or a newspaper monopoly, provided those assets throw off "owner's profits"--cash that can be extracted from a business after necessary capital outlays are paid for.<br /><br />Like Buffett, Pabrai keeps his distance from Wall Street. He buys no research and has no hired help. If he can't understand a company, he doesn't buy the stock. Further, Pabrai won't meet with a company's executives; if he socializes with one, he'll never invest in the stock. "Chief executives are salesmen, as Graham says," Pabrai intones. "That's how they get their jobs."<br /><br />Pabrai last year bought the Norwegian oil tanker firm Frontline when shipping rates fell to $5,000 a day. To remain profitable, the company needs rates of at least $18,000 a day on its 70 double-hulled oil tankers. Investors fled the stock, and it fell to $3. Frontline wasn't a classic Graham value play since it didn't have much in the way of net current assets. But it did have hard assets--those tankers.<br /><br />After noticing the stock on a new lows list, Pabrai looked into the oil shipping business and discovered that small Greek shippers with near-obsolete single-hulled tankers were being hurt more than Frontline and were selling their ships for scrap. So he knew that when oil demand next surged, Frontline would be better able to command premium rates. Near the end of 2003 Frontline was charging $50,000 a day per tanker. Pabrai is long gone, but the stock, at $29 a share, trades at a cheap five times trailing earnings.<br /><br />In 2002 he beat Buffett to the convertible bonds of Level 3 Communications. Like his hero, Pabrai saw value in telecom's distress. <br /><br />C. Douglas Davenport, manager of the $52 million Wisdom Fund in Atlanta, is Buffett's shadow. If Buffett does something, Davenport will, too--going so far as to buy proxy stocks for companies that Berkshire acquires. Davenport keeps the identical proportion of cash that Berkshire does, a sizable 22% of his portfolio.<br /><br />Davenport's fund, with backing from Sir John Templeton's family, started in early 1999 as the Berkshire Fund but changed its name after the real Berkshire complained. Davenport, 53, follows Berkshire's public filings and news reports to see what Buffett has been up to. "Buffett is quite well followed. It's amazing how much you can find out about the man on the Internet," he says. Thus Davenport has 8% of his assets in Coca-Cola, and 4% in American Express, just like Berkshire.<br /><br />When Berkshire acquired carpetmaker Shaw Industries in 2001, Davenport went after competitor Mohawk Industries, waiting two weeks for its share price to settle down. Last year Berkshire bought Clayton Homes, a builder of prefab homes, and Davenport bought into similar Champion Enterprises. To roughly match Berkshire's huge stakes in auto insurance and reinsurance, Davenport has American International Group.<br /><br />Since inception just over five years ago Wisdom is up an annual 5.2%, after its 1.5% expense ratio, matching Berkshire's showing.Dance With Mehttp://www.blogger.com/profile/11452760400913968147noreply@blogger.com0tag:blogger.com,1999:blog-3761262596373585191.post-34487145070517400902010-11-21T03:52:00.001-08:002010-11-21T03:52:06.664-08:00Mohnish Pabrai<h3>We will never see another Warren Buffett</h3><a href="http://files.arunbansal.com/pdf/Interview_With_Mohnish_Pabrai.pdf">http://files.arunbansal.com/pdf/Interview_With_Mohnish_Pabrai.pdf</a><br><a href="http://www.aboveaverageodds.com/resources/">http://www.aboveaverageodds.com/resources/</a><br> <a href="http://twitter.com/AboveAvgOdds">http://twitter.com/AboveAvgOdds</a><br><a href="http://www.gurufocus.com/news.php?author=Valuehuntr">http://www.gurufocus.com/news.php?author=Valuehuntr</a><br><br><br> <div style="height: 15px; margin-top: 10px;"> <span style="font-size: 12px; text-align: left;">DNA / Vivek Kaul / Wednesday, October 21, 2009 2:02 IST</span> </div> <div style="font-size: 12px; line-height: 150%;"> <p>Mohnish Pabrai currently manages Pabrai Investment Funds, which he founded in 1999. The fund has around half a billion dollars in assets under management. Pabrai went to the US in 1982 to do his undergrad in computer engineering. After that, he worked with Tellabs in Chicago. In 1990, he started his own company TransTech, an IT services/system integration business and ran that for around ten years, before starting Pabrai Investment Funds. He has written a book on investing, The Dhandho Investor: The Low-Risk Value Method to High Returns. Excerpts from an interview:</p><p><strong>How did you get into investing business from information technology?</strong> <br>Around 1994 I heard about Warren Buffett for the first time accidentally. The first couple of biographies about him had just been published a year or two before that. I read those books and I was quite blown away by some data points that were coming out about him and the industry and so on. I didn't have any experience or even education in the investment business. But I was very intrigued by it.</p><p>I started to invest in the public equity markets using Buffett's model in 1994 and basically did extremely well, north of 70% a year, till about 1999. I was getting more and more interested in investment research and securities analysis and made a decision to leave my company. I brought in an outside CEO and decided that I would spend more time on investing and at the same time some friends of mine wanted me to manage their money for them. It started as a hobby in 1999 with about a million dollars from eight people. About a year later the business (TransTech) actually got sold, I wasn't running it anyway, but I was completely cashed out. And then I thought that let's make my hobby a real business, try to scale it up and get investors. We now manage about $500 million — ten years later.</p><p><strong>How did you narrow down on Warren Bufett and value investing?<br></strong>Basically in 1994, when I read about Buffett, there were two things that stood out. One was that he had compounded money at a very high rate. If you are compounding at a high rate, even if you have a small amount of money — let's say a million dollars — in thirty years you could have a billion dollars. So the idea of compounding at a rate above the market rate is an extremely fine notion because it can lead to enormous wealth creation. That was the first thing.</p><p>The second thing was that the way Buffett was compounding money at a rate higher than the market was based on a core wisdom which he stood for. If you are physicist, whether you believe in gravity or not, it will always impact you. Just like there are laws of physics, laws of gravity, there are laws of investing.</p><p>I noticed in 1994 that the mutual fund business had two things: one, they did not follow the laws of investing, and two, their results were affected by the fact that they did not follow the laws of investing.</p><p>For example, a basic law of investing is that you make very few bets, you don't buy a hundred companies because you are not going to have an understanding of business. But if you look at mutual funds, that is not the way they operate.</p><p><strong>So essentially, what you are saying is that investors should make fewer bets?</strong><br>So you make few bets, you make big bets, infrequent bets and you only make bets when the odds are heavily in your favour. What I found very funny was that here is a guy (Buffett) who is telling you very much the approach to investing he follows, and this is like Newton telling you the laws of physics. The second thing is that the investment industry does not care about these laws, and their results reflect it.</p><p>The third conclusion I came to is, I said, OK, if what I am saying is right, what it means is that a person like myself, who has no experience in this industry, could come in and apply Buffett's rules and do better than all these managers running all these funds. So I said, well, that hypothesis means nothing until you test it out. I had an asset sale take place of a part of my business in 1994, and I had about million dollars in cash, sitting with me for which I did not have any need for.</p><p>I decided I am going to take this million and put this on a twenty or thirty-year compounding engine. I was about 30 years old, I wanted to see if by the age of sixty I had my billion dollars. I started playing this thirty-year game in 1994, and basically I found that first of all, it was very enjoyable and second, that it's been fifteen years now and the original hypothesis I had is absolutely correct — which is that the industry doesn't get it, they still haven't changed their ways, and there results reflect that.</p><p><strong>What are the factors you look at before deciding to invest in a company? Can you give us an example?<br></strong>The first thing you got to look at is, "I am not buying a stock, but I am buying a business." And you only buy the business if you were willing to buy the entire business if you had money for it. So, for example, if Reliance Industries has a market cap of $100 billion and you had a $300 billion, the question you would ask yourself is, would I buy the entire business for a $100 billion?</p><p>The first thing is that you are not buying pieces of paper, but you are buying an entire business. The second is that you ask yourself, do I understand the business? Do I truly understand how it will work, how it makes money, how will it do in the future?<br>Then the third thing is, if Reliance produces$3 billion a year cash flow and it trades for $100 billion, I have no intention of buying it at 33 times cash flow. It is like I have no interest in putting money in an account that pays 3% interest.</p><p>So I love Reliance, maybe, if the fair value of business is 15 times cash flow, which is $45 billion. And since I am cheapskate, I don't want to buy it for more than half its fair value, so I just say to myself, that if it goes below $20 billion in value — or one-fifth the current price — then I will look at it again. In fact, that is the way to look at the Indian Sensex. You take all the Reliances, the Wipros and Infosyses of the world, chop their price by four, and that's your entry price.</p><p><strong>What has been your most successful stockpick till date?</strong> <br>You know that's a very funny question. The most successful company I ever invested in is Satyam. I invested in 1995, and I was completely out by 2000. When I invested the stock was at Rs 40, and Satyam's earnings at that time were about at Rs 12 a share, so you were buying a business for three-and-a-half times earnings. And the more interesting thing for me was that property the company had in Hyderabad exceeded the market capitalisation as it was carried at a value that was bought a long time ago.</p><p>The only reason I knew about Satyam was because I was in the IT services space. These guys had actually visited us to see if they could do business together. And I had been pretty impressed by the way the business operated and the people I had met.</p><p>I looked at it from my investment point of view after was amazed that such a business could trade at such a price. So I invested in Satyam. In 2000, it was trading at Rs 7,000, that is about a 150 times the price I bought it at. This was in the days before demat, and actually when I bought the stock with an account through Kotak that I had in Mumbai, I was given physical delivery of these shares that looked like tattered pieces of paper that were falling apart.</p><p>Satyam from less than a PE of 3 to more than PE of 100. I just said I am out of it because now I owned a bubble stock even though I did not buy it at bubble price. I sold my entire position within 5% of the peak. Within six months it had dropped from Rs 7,000 to Rs 1,000, and continued on the sidelines for a while. That was the best deal that I ever made.</p><p><strong>I also happened to read somewhere that you wear shorts to work and do not as a matter of habit short stocks?</strong><br>Well, I am wearing shorts right now … the math for for shorting is really bad. When you are long on a stock, as it goes down in price, the position is going against you and it becomes a smaller portion of your portfolio. In shorting, it is the other way around: if the short goes against you, it is going to become a larger position of your portfolio. When you short a stock, your loss potential is infinite; the maximum you can gain is double your value. So why will you take a bet where the maximum upside is a double and the maximum downside bankruptcy?</p><p>Also, any time you short a stock, you are hooked to a (stock price) quote machine for life support because you have to watch what is happening all the time. Many a times, when I am travelling in India, it could be several days when I don't have a quote for any positions that I hold. So I don't want to be a in a situation where I have an umbilical cord linked to some quote machine … and blood pressure going up and down.</p><p><strong>Do you have investments in emerging markets like India and China or do you stick to the stocks in the US market?</strong><br>I would say that most times a very large portion of our portfolio has a lot of exposure to the global market. I have (shares in) several companies in Canada. I own (shares in) one Chinese company and an Egyptian company, I don't own any Indian companies right now, but I use to own Satyam. Also Pabrai Funds use to own Dr Reddy's.</p><p><strong>You have said in the past that investment ideas come to you by reading a lot…</strong> <br>An investor should think of himself as a gentleman of leisure. Don't think that you are in some profession. You just think that you are a person who is focused on enjoying and living life well. If you focus on yourself as a gentleman of leisure what is going to happen is that you do not feel any compelling reason to act. It has been several months since I have bought any new stock. And that is not a problem because we went through a period in December when we bought ten stocks. The first thing is that we are in a profession were you don't pay for activity, you get paid for being right. So there should be no compelling reason to act. Basically, the thing you do is you take out the reason to act.<br>The second thing you do is you focus on acquiring worldly wisdom. I read an enormous amount of stuff and relate to what different investment managers who I respect are saying. So, at times, things become no-brainers.</p><p>In the fourth quarter of last year, when everything was going to hell, one part of the market that went to extreme hell was commodity-related stocks. Commodity-related stocks absolutely got crushed. 95% down. 90% down. And if you simply keep in mind that you look at the growth rates of India and China, you can get an insight.</p><p>Through our foundation Dakshina I spend a good amount of time in rural India. I can see nuances about India, that most people would not see. You can see that the pressure on the few commodities in the earth's crust is tremendous.</p><p>China has severe problems with fresh water and you really have big problems with agriculture with those type of water issues. When you have growth rates of 7-8%, people will want to eat the best. Generally it is proven that protein consumption climbs very high when economies do well. It is absolutely a given that 10 years from now the amount of agriculture and protein needed will be much higher from today. And getting there will not be easy.</p><p>So the thing is there are certain businesses that serve as toll bridges in that space. For example, one toll bridge is if you look at Latin America. It has a lot of land and it is flooded with fresh water rivers. South America can basically take that land and convert it into producing corn and soybean or whatever and export the hell out of it to China. And that is exactly what will end up happening. Latin American agricultural companies with large land holdings today are not excessively priced, they are very cheap. But there is absolutely no way for India and China to satisfy the consumption demand that is coming without going to Latin America. So we will just own the toll bridges and wait.</p><p><strong>How much of Warren Buffett's success can be attributed to his investment prowess and how much to the fact that he is Warren Bufett?</strong><br>Well the thing is you could have invested even after Buffett had invested and you could have made six times the money out of it. </p><p>In fact there are a couple of professors in Ohio, who studied any stock that Warren Buffett bought, if you bought on the last day of the month, when it was public that he owned that stock, and you sold it after it was public that he had started selling it, you would have generated north of 20% annual rate of return.</p><p>I would say that we will never see another Warren Buffett. Just like we will never see any Albert Einstein or another Mahatma Gandhi. Buffett is a very unique individual. His skillsets outside of investment are phenomenal but they get dwarfed by his investing skills. The main thing that makes Warren Buffett Warren Buffett is that he is a learning machine who has worked really hard for, let's us say seventy years, and is continuously learning every day. </p><p>So the thing is if you want to be like Buffett, there is no short cut. First of all, you have to be deeply interested in investing and you have to be very willing spending tens of hours, hundreds of hours, reading the minutiae. There is a very famous value investor called Seth Klarman. He is into horse racing. And his famous horse is called Read the Footnotes.</p> </div> <div style="margin: 15px 0pt;"><b>URL of the article:</b> <a href="http://www.dnaindia.com/money/interview_we-will-never-see-another-warren-buffett_1301088-all">http://www.dnaindia.com/money/interview_we-will-never-see-another-warren-buffett_1301088-all</a><br> <br><h1 class="xlHeader">Pabrai's Perspectives on Investing</h1> <p class="articleMeta"> <span class="vcard byline">By Emil Lee | <a class="qsAdd qs-source-iapsitlnk0000003" href="http://www.fool.com/author/1522/index.aspx?source=iapsitlnk0000003">More Articles</a> </span><br> <span class="dateline">February 22, 2007</span> | <span class="comments"><a href="http://www.fool.com/investing/value/2007/02/22/pabrais-perspectives-on-investing.aspx#commentsBoxAnchor">Comments (0) </a></span> </p> <p>Warren Buffett made billions buying shares of <strong>Coca-Cola</strong> <span class="ticker">(NYSE: <a href="http://caps.fool.com/Ticker/KO.aspx?source=isssitthv0000001" class="qsAdd qs-source-isssitthv0000001">KO</a>)</span>, <strong>Wells Fargo</strong> <span class="ticker">(NYSE: <a href="http://caps.fool.com/Ticker/WFC.aspx?source=isssitthv0000001" class="qsAdd qs-source-isssitthv0000001">WFC</a>)</span>, and Gillette (now a part of <strong>Procter & Gamble</strong> <span class="ticker">(NYSE: <a href="http://caps.fool.com/Ticker/PG.aspx?source=isssitthv0000001" class="qsAdd qs-source-isssitthv0000001">PG</a>)</span>) in the 1980s and 1990s. But before that, he was actually posting better returns investing in some companies you've never heard of, like Sanborn Maps, and some you have, like <strong>American Express</strong> <span class="ticker">(NYSE: <a href="http://caps.fool.com/Ticker/AXP.aspx?source=isssitthv0000001" class="qsAdd qs-source-isssitthv0000001">AXP</a>)</span>.</p> <p>In those early days, Buffett's <a href="http://www.fool.com/investing/value/2006/09/20/the-best-investment-strategy.aspx">investing strategies</a> were geared more toward special situations -- workouts, <a class="wikiTerm qsAdd qs-source-ihlsitlnk0000001" href="http://wiki.fool.com/Arbitrage?source=ihlsitlnk0000001" title="Get the definition on The Motley Fool Investing Wiki">arbitrage</a>, and liquidations. (Many people, based on comments Buffett has made, believe he makes more than 50% a year in his personal portfolio from special-situation investing.) From 1957 to 1968, Buffett's investment <a class="wikiTerm qsAdd qs-source-ihlsitlnk0000001" href="http://wiki.fool.com/Partnership?source=ihlsitlnk0000001" title="Get the definition on The Motley Fool Investing Wiki">partnership</a> posted 31.6% gross and 25.3% net annualized returns, respectively, in comparison with the Dow's 9.1% annual return.</p> <p>Mohnish Pabrai, who was profiled in James Altucher's must-read <em>Trade Like Warren Buffett</em>, is an ardent Buffett follower, and his investment partnership likewise has a stellar track record. Pabrai's first book, <em>Perspectives on Investing, </em> was brilliant in its simplicity and ability to convey the principles of intelligent investing. Pabrai also has a new book, <em>The Dhandho Investor,</em> coming out soon. I thought Fools (myself included) would be very well-served to read up on some of Pabrai's thoughts, and the following is the first half of a two-part interview conducted with Pabrai via email.</p> <p> <strong>Emil Lee:</strong> You've modeled your partnership after the Buffett Partnership -- do you mind providing any detail on how that's going? Are you on track in terms of performance, assets under management, etc.?</p> <p> <strong>Mohnish Pabrai:</strong> It has gone far better than I would have forecasted. Mr. Buffett deserves all the credit. I am just a shameless cloner. A $100,000 investment in Pabrai Funds at inception (on July 1, 1999) was worth $659,700 on Dec. 31, 2006. That's seven and a half years. The annualized return is 28.6% -- after my outrageous fees and all expenses. Assets under management are over $400 million -- up from $1 million at inception. On all fronts, Pabrai Funds has done vastly better than my best-case expectations.</p> <p>Going forward, I expect we'll continue to beat the major indices, but with just a small average annualized outperformance.</p> <p> <strong>Lee:</strong> You clearly believe in having a broad latticework of knowledge from different educational disciplines from which to draw upon when judging <a href="http://www.fool.com/personal-finance/retirement/2005/02/18/superior-investment-ideas-for-you.aspx">investment ideas</a>. Can you describe how you spend your day? Do you devote a general percentage of your time to reading "non-investment" material versus 10-Ks, etc.?</p> <p> <strong>Pabrai:</strong> My calendar is mostly empty. I try to have no more than one meeting a week. Beyond that, the way the day is spent is quite open. If I'm in the midst of drilling down on a stock, I might spend a few days just focused on reading documents related to that one business. Other times, I'm usually in the midst of some book, and part of the day goes to keeping up with correspondence -- mostly email.</p> <p>I take a nap nearly every afternoon. There is a separate room with a bed in our offices. And I usually stay up late. So some reading, etc., is at night.</p> <p> <strong>Lee:</strong> In <em>Trade Like Warren Buffett</em>, you mention that you let investment ideas come to you by reading a lot, and also monitoring familiar names on the NYSE. Can you describe your process of generating investment ideas -- is it simply just reading a lot? Do you do anything else to actively seek out ideas?</p> <p> <strong>Pabrai:</strong> The No. 1 skill that a successful investor needs is patience. You need to let the game come to you. My steady-state modus operandi is to assume that I'm just a gentleman of leisure, and that I'm not in the investment business. If something looks so compelling that it screams out at me, saying "Buy me!!," I then do a drill-down. Otherwise, I'm just reading for reading's sake. So, I scan a few sources and usually can find something scream out at me a few times a year. These sources (in no particular order) are:</p> <p>1. 52-Week Lows on the NYSE (published daily in <em>The Wall Street Journal </em> and weekly in <em>Barron's</em>)<br>2. <em>Value Line </em> (look at their various "bottoms lists" weekly)<br>3. <em>Outstanding Investor Digest </em> (<a rel="nofollow" href="http://www.oid.com/">www.oid.com</a>)<br> 4. <em><a href="http://www.fool.com/investing/value/index.aspx">Value Investor</a> Insight </em> (<a rel="nofollow" href="http://www.valueinvestorinsight.com/">www.valueinvestorinsight.com</a>)<br>5. <em>Portfolio Reports </em> (from the folks who put out OID)<br> 6.<em> The Wall Street Journal<br></em>7.<em> Financial Times<br></em>8. <em>Barron's<br></em>9. <em>Forbes<br></em>10.<em> Fortune<br></em>11. <em>BusinessWeek<br></em>12. The Sunday <em>New York Times<br></em>13. The Value Investors' Club (<a rel="nofollow" href="http://www.valueinvestorsclub.com/">www.valueinvestorsclub.com</a>)<br> 14. Magic Formula (<a rel="nofollow" href="http://www.magicformulainvesting.com/">www.magicformulainvesting.com</a>)<br>15. Guru Focus (<a rel="nofollow" href="http://www.gurufocus.com/">www.gurufocus.com</a>)</p> <p>Between all of the above, I have historically found at least three to four good ideas every year. Sometimes I make a mistake, and a good idea turns out to be not so good.</p> <p> <strong>Lee:</strong> A big part of investing is knowing what to pay attention to and what not to [focus on]. How do you sift through the thousands of investment ideas? Often, bargains are bargains because they're unrecognizable -- how do you spot the needles in the haystack, and how do you avoid the value traps?</p> <p> <strong>Pabrai:</strong> I wait to hear the scream. "Buy me!" It needs to be really loud, as I'm a bit hard of hearing.</p> <p> <strong>Lee:</strong> Would it be fair to say you are more balance sheet-oriented, versus income/cash flow statement-oriented? If so, how do you get comfortable with the asset values (i.e., Frontline, death care)?</p> <p> <strong>Pabrai:</strong> John Burr Williams was the first to define <a class="wikiTerm qsAdd qs-source-ihlsitlnk0000001" href="http://wiki.fool.com/Intrinsic_value?source=ihlsitlnk0000001" title="Get the definition on The Motley Fool Investing Wiki">intrinsic value</a> in his <em>The Theory of Investment Value, </em> published in 1938. Per Williams, the intrinsic value of any business is determined by the cash inflows and outflows -- discounted at an appropriate interest rate -- that can be expected to occur during the remaining life of the business. The definition is painfully simple.</p> <p>So, cash can be gotten out of a business in a liquidation or by cash the business generates year after year. It is all a question of what is the likelihood of each. If future cash flows are easy to figure out and are high-probability events, then <a class="wikiTerm qsAdd qs-source-ihlsitlnk0000001" href="http://wiki.fool.com/Liquidation_value?source=ihlsitlnk0000001" title="Get the definition on The Motley Fool Investing Wiki">liquidation value</a> can be set aside. On the other hand, sometimes the only thing that is a high probability of value is liquidation value. Both work. Depends on the situation. But you first need to hear a scream ...</p> <p> <strong>A worthy successor<br></strong>Pabrai's answers have provided a great look into the thoughts and habits of an excellent value investor. In fact, he's one of a handful alive who are generally acknowledged as worthy of following in Buffett's footsteps (Pabrai was nominated as a "Buffetteer" by <em>Forbes </em> magazine). Like Buffett, Pabrai gives credence to the theory that activity shouldn't be confused with productivity, but instead tends to result in friction.</p> <p>Be sure to tune in tomorrow, when we publish the second part of the interview and find out more about how to become a better investor.</p> <p>For more interviews with other <a class="wikiTerm qsAdd qs-source-ihlsitlnk0000001" href="http://wiki.fool.com/Hedge_fund?source=ihlsitlnk0000001" title="Get the definition on The Motley Fool Investing Wiki">hedge fund</a> managers, check out:</p> <ul><li> <a href="http://www.fool.com/investing/small-cap/2006/12/18/rounding-the-second-curve.aspx">Rounding the Second Curve</a> </li><li> <a href="http://www.fool.com/investing/value/2006/12/27/rounding-the-second-curve-part-2.aspx">Rounding the Second Curve: Part 2</a> </li><li> <a href="http://www.fool.com/investing/general/2007/01/19/showdown-in-warwick-valley.aspx">Showdown in Warwick Valley</a> </li></ul><br><br><br><h1 class="xlHeader">Pabrai's Perspectives on Investing</h1> <p class="articleMeta"> <span class="vcard byline">By Emil Lee | <a class="qsAdd qs-source-iapsitlnk0000003" href="http://www.fool.com/author/1522/index.aspx?source=iapsitlnk0000003">More Articles</a> </span><br> <span class="dateline">February 22, 2007</span> | <span class="comments"><a href="http://www.fool.com/investing/value/2007/02/22/pabrais-perspectives-on-investing.aspx#commentsBoxAnchor">Comments (0) </a></span> </p> <p>Warren Buffett made billions buying shares of <strong>Coca-Cola</strong> <span class="ticker">(NYSE: <a href="http://caps.fool.com/Ticker/KO.aspx?source=isssitthv0000001" class="qsAdd qs-source-isssitthv0000001">KO</a>)</span>, <strong>Wells Fargo</strong> <span class="ticker">(NYSE: <a href="http://caps.fool.com/Ticker/WFC.aspx?source=isssitthv0000001" class="qsAdd qs-source-isssitthv0000001">WFC</a>)</span>, and Gillette (now a part of <strong>Procter & Gamble</strong> <span class="ticker">(NYSE: <a href="http://caps.fool.com/Ticker/PG.aspx?source=isssitthv0000001" class="qsAdd qs-source-isssitthv0000001">PG</a>)</span>) in the 1980s and 1990s. But before that, he was actually posting better returns investing in some companies you've never heard of, like Sanborn Maps, and some you have, like <strong>American Express</strong> <span class="ticker">(NYSE: <a href="http://caps.fool.com/Ticker/AXP.aspx?source=isssitthv0000001" class="qsAdd qs-source-isssitthv0000001">AXP</a>)</span>.</p> <p>In those early days, Buffett's <a href="http://www.fool.com/investing/value/2006/09/20/the-best-investment-strategy.aspx">investing strategies</a> were geared more toward special situations -- workouts, <a class="wikiTerm qsAdd qs-source-ihlsitlnk0000001" href="http://wiki.fool.com/Arbitrage?source=ihlsitlnk0000001" title="Get the definition on The Motley Fool Investing Wiki">arbitrage</a>, and liquidations. (Many people, based on comments Buffett has made, believe he makes more than 50% a year in his personal portfolio from special-situation investing.) From 1957 to 1968, Buffett's investment <a class="wikiTerm qsAdd qs-source-ihlsitlnk0000001" href="http://wiki.fool.com/Partnership?source=ihlsitlnk0000001" title="Get the definition on The Motley Fool Investing Wiki">partnership</a> posted 31.6% gross and 25.3% net annualized returns, respectively, in comparison with the Dow's 9.1% annual return.</p> <p>Mohnish Pabrai, who was profiled in James Altucher's must-read <em>Trade Like Warren Buffett</em>, is an ardent Buffett follower, and his investment partnership likewise has a stellar track record. Pabrai's first book, <em>Perspectives on Investing, </em> was brilliant in its simplicity and ability to convey the principles of intelligent investing. Pabrai also has a new book, <em>The Dhandho Investor,</em> coming out soon. I thought Fools (myself included) would be very well-served to read up on some of Pabrai's thoughts, and the following is the first half of a two-part interview conducted with Pabrai via email.</p> <p> <strong>Emil Lee:</strong> You've modeled your partnership after the Buffett Partnership -- do you mind providing any detail on how that's going? Are you on track in terms of performance, assets under management, etc.?</p> <p> <strong>Mohnish Pabrai:</strong> It has gone far better than I would have forecasted. Mr. Buffett deserves all the credit. I am just a shameless cloner. A $100,000 investment in Pabrai Funds at inception (on July 1, 1999) was worth $659,700 on Dec. 31, 2006. That's seven and a half years. The annualized return is 28.6% -- after my outrageous fees and all expenses. Assets under management are over $400 million -- up from $1 million at inception. On all fronts, Pabrai Funds has done vastly better than my best-case expectations.</p> <p>Going forward, I expect we'll continue to beat the major indices, but with just a small average annualized outperformance.</p> <p> <strong>Lee:</strong> You clearly believe in having a broad latticework of knowledge from different educational disciplines from which to draw upon when judging <a href="http://www.fool.com/personal-finance/retirement/2005/02/18/superior-investment-ideas-for-you.aspx">investment ideas</a>. Can you describe how you spend your day? Do you devote a general percentage of your time to reading "non-investment" material versus 10-Ks, etc.?</p> <p> <strong>Pabrai:</strong> My calendar is mostly empty. I try to have no more than one meeting a week. Beyond that, the way the day is spent is quite open. If I'm in the midst of drilling down on a stock, I might spend a few days just focused on reading documents related to that one business. Other times, I'm usually in the midst of some book, and part of the day goes to keeping up with correspondence -- mostly email.</p> <p>I take a nap nearly every afternoon. There is a separate room with a bed in our offices. And I usually stay up late. So some reading, etc., is at night.</p> <p> <strong>Lee:</strong> In <em>Trade Like Warren Buffett</em>, you mention that you let investment ideas come to you by reading a lot, and also monitoring familiar names on the NYSE. Can you describe your process of generating investment ideas -- is it simply just reading a lot? Do you do anything else to actively seek out ideas?</p> <p> <strong>Pabrai:</strong> The No. 1 skill that a successful investor needs is patience. You need to let the game come to you. My steady-state modus operandi is to assume that I'm just a gentleman of leisure, and that I'm not in the investment business. If something looks so compelling that it screams out at me, saying "Buy me!!," I then do a drill-down. Otherwise, I'm just reading for reading's sake. So, I scan a few sources and usually can find something scream out at me a few times a year. These sources (in no particular order) are:</p> <p>1. 52-Week Lows on the NYSE (published daily in <em>The Wall Street Journal </em> and weekly in <em>Barron's</em>)<br>2. <em>Value Line </em> (look at their various "bottoms lists" weekly)<br>3. <em>Outstanding Investor Digest </em> (<a rel="nofollow" href="http://www.oid.com/">www.oid.com</a>)<br> 4. <em><a href="http://www.fool.com/investing/value/index.aspx">Value Investor</a> Insight </em> (<a rel="nofollow" href="http://www.valueinvestorinsight.com/">www.valueinvestorinsight.com</a>)<br>5. <em>Portfolio Reports </em> (from the folks who put out OID)<br> 6.<em> The Wall Street Journal<br></em>7.<em> Financial Times<br></em>8. <em>Barron's<br></em>9. <em>Forbes<br></em>10.<em> Fortune<br></em>11. <em>BusinessWeek<br></em>12. The Sunday <em>New York Times<br></em>13. The Value Investors' Club (<a rel="nofollow" href="http://www.valueinvestorsclub.com/">www.valueinvestorsclub.com</a>)<br> 14. Magic Formula (<a rel="nofollow" href="http://www.magicformulainvesting.com/">www.magicformulainvesting.com</a>)<br>15. Guru Focus (<a rel="nofollow" href="http://www.gurufocus.com/">www.gurufocus.com</a>)</p> <p>Between all of the above, I have historically found at least three to four good ideas every year. Sometimes I make a mistake, and a good idea turns out to be not so good.</p> <p> <strong>Lee:</strong> A big part of investing is knowing what to pay attention to and what not to [focus on]. How do you sift through the thousands of investment ideas? Often, bargains are bargains because they're unrecognizable -- how do you spot the needles in the haystack, and how do you avoid the value traps?</p> <p> <strong>Pabrai:</strong> I wait to hear the scream. "Buy me!" It needs to be really loud, as I'm a bit hard of hearing.</p> <p> <strong>Lee:</strong> Would it be fair to say you are more balance sheet-oriented, versus income/cash flow statement-oriented? If so, how do you get comfortable with the asset values (i.e., Frontline, death care)?</p> <p> <strong>Pabrai:</strong> John Burr Williams was the first to define <a class="wikiTerm qsAdd qs-source-ihlsitlnk0000001" href="http://wiki.fool.com/Intrinsic_value?source=ihlsitlnk0000001" title="Get the definition on The Motley Fool Investing Wiki">intrinsic value</a> in his <em>The Theory of Investment Value, </em> published in 1938. Per Williams, the intrinsic value of any business is determined by the cash inflows and outflows -- discounted at an appropriate interest rate -- that can be expected to occur during the remaining life of the business. The definition is painfully simple.</p> <p>So, cash can be gotten out of a business in a liquidation or by cash the business generates year after year. It is all a question of what is the likelihood of each. If future cash flows are easy to figure out and are high-probability events, then <a class="wikiTerm qsAdd qs-source-ihlsitlnk0000001" href="http://wiki.fool.com/Liquidation_value?source=ihlsitlnk0000001" title="Get the definition on The Motley Fool Investing Wiki">liquidation value</a> can be set aside. On the other hand, sometimes the only thing that is a high probability of value is liquidation value. Both work. Depends on the situation. But you first need to hear a scream ...</p> <p> <strong>A worthy successor<br></strong>Pabrai's answers have provided a great look into the thoughts and habits of an excellent value investor. In fact, he's one of a handful alive who are generally acknowledged as worthy of following in Buffett's footsteps (Pabrai was nominated as a "Buffetteer" by <em>Forbes </em> magazine). Like Buffett, Pabrai gives credence to the theory that activity shouldn't be confused with productivity, but instead tends to result in friction.</p> <p>Be sure to tune in tomorrow, when we publish the second part of the interview and find out more about how to become a better investor.</p> <p>For more interviews with other <a class="wikiTerm qsAdd qs-source-ihlsitlnk0000001" href="http://wiki.fool.com/Hedge_fund?source=ihlsitlnk0000001" title="Get the definition on The Motley Fool Investing Wiki">hedge fund</a> managers, check out:</p> <ul><li> <a href="http://www.fool.com/investing/small-cap/2006/12/18/rounding-the-second-curve.aspx">Rounding the Second Curve</a> </li><li> <a href="http://www.fool.com/investing/value/2006/12/27/rounding-the-second-curve-part-2.aspx">Rounding the Second Curve: Part 2</a> </li><li> <a href="http://www.fool.com/investing/general/2007/01/19/showdown-in-warwick-valley.aspx">Showdown in Warwick Valley</a> </li></ul><br><div align="justify"><h1>Pabrai Investment Funds Annual Meeting Notes</h1><h5>September-28-2010</h5><br><p><font style=""> Pabrai Funds Annual Meeting<br> Chicago Illinois<br> September 25th 2010<br> <br> <strong>Prepared Comments:</strong><br> <br> The meeting started with an overview of how the fund has performed. Since the fund was started in 2001, it has returned 15.1% annually compared to -1.5% for the S&P 500.<br> <br> $100,000 invested in the fund in June of 2000 would be $408,000 today.<br> <br> Mohnish's goal is to beat the index by 3% annually.<br> <br> This past summer 3 interns worked part time on the checklist 2.0. They identified mistakes by great investors that resulted in a permanent loss of capital and analyzed why the mistakes occurred. They looked for commentary by the fund managers on these mistakes. They found that these investors almost never discussed their mistakes.<br> <br> The biggest mistake was an investment in AIG by the Davis Fund which resulted in a $2 billion loss for the fund.<br> <br> Mohnish said that the checklist is a great weapon in the Pabrai Funds arsenal.<br> <br> Mohnish then went through one winner and one loser in the portfolio.<br> <br> The worst investment during the period was Ternium which was actually sold at a small gain. <br> <br> The winner he discussed was Teck cominco. This is the best investment the fund has ever made. The Pabrai Funds made an 8x return in only 3 months. Mohnish invested because they have some of the lowest cost mines in the world. The reason they were so cheap was because of a liquidity mismatch on the balance sheet. It had a large amount of debt coming due in a year. Mohnish felt that if they weren't able to refinance the debt that they could sell assets piecemeal because of their highly diversified operations. In the worse case, the company would be worth a lot even in reorganizations because its book value was so high.<br> <br> <strong>Question and Answer:</strong><br> <br> </font></p><div><font style=""><strong>How Long did you follow Teck Cominco before buying?</strong><br> <br> Mohnish said he spent less than 5 days researching Teck because there were so many bargains at this time. Teck had a very solid moat because it was the lowest cost producer. To find Teck he looked at industry cost curves and paid attention to the lowest cost producers. The most important question to figure out was the liquidity mismatch.<br> <br> <strong>Thoughts on Fairfax?</strong><br> <br> He doesn't discuss current holdings.<br> <br> <strong>Why don't you discuss current holdings?</strong></font><div><font style=""><br> <br> If investors get in the habit of discussing their investments they may end up suffering from commitment bias. If they constantly talk about how great a company is, they may suffer from a bias that could impair their judgment.<br> <br> <strong>What are your views on position sizing?</strong><br> <br> His allocation policy changed in 2008 to reflect slightly elevated investment risks of his investment baskets and prior mistakes. If he has 10% positions it's very hard to recover from a mistake. He discussed his new allocation framework with <a href="http://www.gurufocus.com/StockBuy.php?GuruName=Charlie+Munger">Charlie Munger</a> who disagreed at first. After Mohnish explained it further, Charlie agreed that Berkshire Hathaway has achieved success with a more diversified portfolio. Mohnish talked about basket bets. When the risk is slightly elevated he will buy a basket of companies with small weightings. For example, he said he is currently researching companies in Japan. If he ends up buying companies there, he will buy a basket of companies each with small weightings in the portfolio. He said stocks there are very cheap.<br> <br> <strong>What attracts you to a business?</strong><br> <br> When he finds a company that looks interesting he starts by thinking as a skeptic. He looks for something that will prove him wrong. He looks for areas of extreme mispricing. It has to be very undervalued but he also has to be able to understand it. He thinks there may be value in Coke bottlers in Japan. The Nikkei has done nothing for 27 years.<br> <br> <strong>Has the increasing size of the fund negatively affect performance?</strong><br> <br> The performance of the fund has not been affected by size or fund inflows. He said that the fund is sitting on a lot of undervalue assets.<br> <br> <strong>Has the economic turmoil changed your model?</strong><br> <br> Mohnish said he has more of an appreciation for macro issues than he has in the past. He also said that some macro trends make sense to base investments on. But the majority of macros trends such as inflation and interest rates are very difficult to predict and he doesn't make judgments on those.<br> <br> <strong>What are your thoughts on the financial industry?</strong><br> <br> Understanding management is key. You want to look for competent and honest managers. Because of the high leverage, management cannot make any mistakes in reserving. Also, it's very difficult for outsiders to understand reserving. He couldn't understand Citibank.<br> <br> <strong>How much time do you spend on the balance sheet of companies you invest in?</strong><br> <br> Before he invested in Teck Cominco he read the last 8 years of annual reports. He spends a lot of time on the balance sheet.<br> <br> <strong>What's your philosophy on timing buying and selling?</strong><br> <br> He expects to be wrong in the future on selling. He said its fine to sell to early. If a stock goes down after he buys it that's fine as long as he is still right about intrinsic value and he has dry powder to invest.<br> <br> <strong>What did you identify with the checklist project?</strong><br> <br> The mistakes were concentrated in 08-09 and included a lot of financials. A lot of the mistakes were similar so he just picked a few. He analyzed Longleaf's investment in GM. Longleaf's management discussed the GM thesis in its reports. The mistake they made was they missed the forest from the trees. They missed the big picture. They figured that because GM did so well in the truck market that that would carry them through. They missed the fact that gas prices would rise to $3. He also said that he greatly respects these managers but that it's important to learn from them. Longleaf also made the mistake of looking at the wrong variables.<br> <br> <strong>How do you know where the edge of your circle of competence is?</strong><br> <br> If you have to ask yourself that question when looking at a company, then it's probably beyond your circle of competence. You have to be honest with yourself. In the case of the Japanese companies he is researching, he has no interest in American listed Japanese companies. He will use the basket approach to Japanese companies because of the unfamiliarity. He also said that these Japanese companies are extremely cheap.<br> <br> <strong>A business owner in the audience said after analyzing his own mistakes he noticed many of his mistakes were repeated. He asked if Mohnish had made a mistake more than once and was susceptible to reoccurring mistakes in one area?</strong><br> <br> <a href="http://www.gurufocus.com/StockBuy.php?GuruName=Chris+Davis">Chris Davis</a> wrote about a mistake he made in 2002. He ended up making the same mistake again in 2008 with AIG. Buffett made the same mistake twice as well with the original Berkshire Hathaway purchased and later on, with the Dexter Shoe purchase. Leverage is a very important factor to consider. One item on the check list is whether or not he suffers from any personal biases. The checklist forces him to take a step back.<br> <br> <strong>Do you see any bubbles today?</strong><br> <br> Bubbles are hard to spot. Real estate in certain parts of China is probably a bubble. There are many bubbles around all the time. He mentioned a book called Trendwatching.<br> <br> <strong>What's your philosophy on investing in foreign markets?</strong><br> <br> He said that investing in US and Canadian companies that are driven by Chinese factors would be of interest to him. It's important to understand foreign growth. You have to watch out for bubbles. China and India have good prospects but there may be an overall bubble. He's very reluctant to invest in China but he's interested in benefiting from Chinese growth. He skips Chinese companies because of accounting.<br> <br> <strong>What does he think about natural gas companies?</strong><br> <br> The industry may be subject to a disruptive shift because of technological changes. The low prices may be permanent but he has no idea. The only good way to invest would be at the bottom of the cost curve and he can't find one. There is no choke point in natural gas unlike iron ore. Natural gas also has substitutes. Mohnish recommended the book, Irrational Optimist. He talked about how cheap energy allows countries to create more fresh water which will allow more agriculture.<br> <br> <strong>How do you prevent macro issues from blinding investments?</strong><br> <br> He's learned to appreciate macro issues more than in the past. As an investor you can't get a handle on all factors. So it makes sense to spread ideas out more. The micro factors trump the macro factors. The company has to be able to control its destiny. He looks for staying power so the company can withstand shocks.<br> <br> <strong>This question came from an investor who has to pull out money for living expenses. He asked how he can get more visibility on what taxes will be?</strong><br> <br> Mohnish practices tax planning in the funds. He sells holdings between the funds to cancel capital gains. The statements sent to shareholders should give them a good idea what the expected tax rate will be. Mohnish is a big tax payer so he is very sensitive to tax issues.<br> <br> <strong>Is your philosophy on portfolio allocation shifting more towards preserving wealth instead of growing it?</strong><br> <br> The Kelly Formula is only correct when making many bets. He always under bet the Kelly Formula. Since Mohnish is making few bets, the Kelly Formula doesn't work. He never fully used the Kelly Formula because it would have told him to bet more heavily. Return of capital is more important than return on capital. If people redeem their money during down times that is permanently lost capital for those people.<br> <br> <strong>Can you name some great companies that you'd love to own at the right price?</strong><br> <br> Ikea, In and Out Burger, Costco, the low cost mines owned by BHP and Rio Tinto. Great companies are all over the place across the world. There are great companies in India and China but and ownership issues exists over there. Pricing is also an issue. Ben Graham's approach was to go to the store and buy what was on sale and <a href="http://www.gurufocus.com/StockBuy.php?GuruName=Charlie+Munger">Charlie Munger</a>'s approach is to go to the store and wait for quality items to go on sale. He likes Charlie's framework.<br> <br> <strong>What extra work do you do to analyze financials?</strong><br> <br> He's reluctant to own most financials. They do own Goldman Sachs. He's read two books on Goldman. It's a great business. He doesn't have a problem with management ethos but it's improving. It's a very complex business. They have the potential to grow huge overseas because they have few offices overseas right now. Since it has opaque parts to its business he made it a basket bet.<br> <br> <strong>Does checklist address good portfolio strategies?</strong><br> <br> No. The checklist deals with analyzing companies. Mohnish recommended that this person read the fundamental value investing books. Mohnish always tries to learn from others.<br> <br> <strong>Would you be more interested in a more certain intrinsic value or a cheaper price?</strong><br> <br> Currently the fund holds a lot of cash as there is less cash in the fund he demands higher discounts for new investments. I wasn't able to too write down most of his answer.<br> <br> <strong>What's your average cash level since 1999?</strong><br> <br> In a crisis, cash plus courage is priceless. Next times a crisis strikes, he wants more cash. Instead of jumping from his second best to his best idea he instead lets investments play out and clings to ideas instead of jumping around.<br> <br> <strong>How does Mohnish spend his free time?</strong><br> <br> He does plenty of other things. He has a daily nap, plays racquetball and plays bridge.</font><a href="http://www.gurufocus.com/forum/read.php?1,108213" class="nav">Discuss this story</a><h3>Featured Articles</h3><ul><li> <a href="http://www.gurufocus.com/news.php?id=114810" class="nav">Bill Ackman Publishes 3Q10 Letter, Commenting on Holdings: KFT, TGT, C, ADP, JCP</a></li><li><a href="http://www.gurufocus.com/news.php?id=114808" class="nav">Buffett Partnership Letters: 1969</a></li> <li><a href="http://www.gurufocus.com/news.php?id=114798" class="nav">Consuel Mack Interviews David Einhorn; Einhorn Top Holdings: CIT, ESV, PFE, CFN, AAPL, CAH</a></li><li><a href="http://www.gurufocus.com/news.php?id=114724" class="nav">Ben Graham Lecture - Investment Selectivity</a></li> </ul><br><h3>Related Articles about Mohnish Pabrai:</h3><ul><li><a href="http://www.gurufocus.com/news.php?id=111819" class="nav">Two Undervalued Ways To Follow Pabrai and Spier Into Japan AND Play The Japan Bond Bubble</a></li> <li><a href="http://www.gurufocus.com/news.php?id=109358" class="nav">Mohnish Pabrai's Presentation At The value Investing Congress</a></li><li><a href="http://www.gurufocus.com/news.php?id=107629" class="nav">Mohnish Pabrai's DNAIndia.com Interview; Top Holdings: FRFHF, BPO, HNR, POT, ATSG, CRESY</a></li> <li><a href="http://www.gurufocus.com/news.php?id=100097" class="nav">Do what Pabrai says, but not always what he does</a></li></ul><br><h3>More Articles by Alex Bossert:</h3><ul><li><a href="http://www.gurufocus.com/news.php?id=100041" class="nav">The BYD Story</a></li> <li><a href="http://www.gurufocus.com/news.php?id=88960" class="nav">Interview Of Alex Bossert By Classic Value Investors</a></li><li><a href="http://www.gurufocus.com/news.php?id=85872" class="nav">Update On Convera Corp. and Footstar</a></li> <li><a href="http://www.gurufocus.com/news.php?id=81258" class="nav">Portfolio Update and Results for 200</a></li></ul><br><h1>My $650,100 Lunch with Warren Buffett</h1> <div class="byline">By Guy Spier</div> <p> </p><p>What would you pay to have lunch with the richest man in the world? For me and Mohnish Pabrai — a friend who, like me, runs a U.S.-based investment fund — the answer is $650,100. That's how much we forked out for the privilege of dining with Warren Buffett on June 25. </p> <p>It was worth every dime. Buffett is the most successful investor in history, yet he has reached that pinnacle while also being supremely ethical. As remarkable for his philanthropy as for his stock-picking, he's giving the bulk of his billions to the Bill & Melinda Gates Foundation; likewise, the fee for our lunch would go to the Glide Foundation, which helps the poor and homeless. Lunch with Buffett, we figured, would be a good way to give to charity, but it would also be the ultimate capitalist master class — a chance to see up close what makes the Sage of Omaha tick and to learn from his wisdom. </p> <p>And so it was that my wife and I sat down for lunch with Buffett in a cozy, wood-paneled alcove of the Manhattan steakhouse Smith & Wollensky. Mohnish brought along his wife and two daughters, who sat on either side of Buffett. When the menus arrived, Buffett, now 77 years old, joked with the girls that he doesn't eat anything he wouldn't touch when he was less than 5. His order: a medium-rare steak with hash browns and a cherry coke — a fitting choice, given that his company, Berkshire Hathaway, is Coca-Cola's largest shareholder. </p> <p>Characteristically, Buffett had done his homework: he'd found out in advance, for example, that my wife was born in Salisbury, North Carolina. But after a minimum of small talk to put us at ease, it was down to more serious matters. When I mentioned how difficult I'd recently found it to do the right thing by lowering the fees I charged my fund's shareholders, Buffett nodded sympathetically and observed, "People will always try to stop you doing the right thing if it is unconventional." When I asked if it would get any easier, he replied with a wry smile: "Just a little." </p> <p>Buffett has made a point of doing business with integrity — and of working only with people who share his values. As we learned, he credits his father with teaching him early on to rely on his own sense of what's right, rather than looking for affirmation from others. "It's very important to live your life by an internal yardstick," he told us, noting that one way to gauge whether or not you do so is to ask the following question: "Would you rather be considered the best lover in the world and know privately that you're the worst — or would you prefer to know privately that you're the best lover in the world, but be considered the worst?" </p> <p>When it comes to investing, nothing is more important than the ability to think rationally for oneself — and Buffett is unsurpassed on this front. In the late '90s, he was criticized for his refusal to invest in booming tech and Internet stocks — a decision that was vindicated when the bubble burst. Buffett has made a fine art of keeping this kind of distracting noise at bay: he said he even limits his contact with managers of businesses in which he invests, preferring to assess their companies' financial records — a more neutral source of information. Equally vital to his success, Buffett said he focuses only on investments that lie well within his "circle of competence." As a result, he confided, whenever he makes an investment, he has no doubt at all that he's right. </p> <p>For most people, attaining the intellectual clarity and emotional detachment that investing requires is tough. But Buffett, for all his affability, is shrewd about disengaging himself to avoid any unnecessary distractions that might impair his judgment. People often try to convince him to meet with them so they can pitch investments to him, he said, but he sees through their many ruses — not least their flattery — and is comfortable saying no far more often than he says yes. </p> <p>One thing Buffett wasn't about to say no to was dessert. He delighted in sampling an array of them, telling the waiter: "Just bring a couple of spoons, and I'll have a little of everyone's." His zest for life is clearly undiminished — indeed, in Berkshire's latest annual report, he wrote that he and his octogenarian partner Charlie Munger "tap-dance to work." </p> <p>What better role model could you ask for than this? And how do you put a price on the opportunity to spend nearly three hours in his company? Well, two days after our meal, the auction closed on eBay for next year's lunch with Buffett. The winner, a Chinese money manager named Zhao Danyang, bid $2.1 million. So, that proves it: our $650,100 lunch was a total bargain. </p> <p> <span style="font-style: italic;"> Guy Spier is CEO of Aquamarine Capital Management </span> </p><ul class="button"><li class="lt"><br></li><li class="icon"><a href="http://www.time.com/time/printout/0,8816,1819293,00.html#"><img src="http://img.timeinc.net/time/i/btn_print.gif" alt="" width="15" height="15"></a></li> <li class="ct"><a id="print2" href="http://www.time.com/time/printout/0,8816,1819293,00.html#">Click to Print</a></li><li class="rt"><br></li></ul> <ul class="find"><li><span>Find this article at:</span></li><li><a href="http://www.time.com/time/business/article/0,8599,1819293,00.html">http://www.time.com/time/business/article/0,8599,1819293,00.html</a></li></ul><br> <h3 class="post-title entry-title"> Pabrai Investment Funds Annual Meeting Notes </h3> <div class="post-header"> </div> <div><span class="Apple-style-span" style="font-weight: bold;"><span class="Apple-style-span" style="font-weight: normal;"><div>I attended the Pabrai Investment Funds annual meeting in Chicago last Saturday. Mohnish did a great job answering questions, as usual. I've been lucky enough to get to know Mohnish over the past few years. Mohnish is one of the best fund managers in the country. He is one of the most genuine people I know and like Buffett he is always enjoying his job and cracking jokes.</div><div><br></div><div>Here are my notes from the 2010 Pabrai Investment Funds Annual Meeting in Chicago:</div></span></span></div><div><span class="Apple-style-span" style="font-weight: bold;"><br> </span></div><div><span class="Apple-style-span" style="font-weight: bold;">Prepared Comments:</span></div><br>The meeting started with an overview of how the fund has performed. Since the fund was started in 2001, it has returned 15.1% annually compared to -1.5% for the S&P 500.<br><br>$100,000 invested in the fund in June of 2000 would be $408,000 today.<br><br>Mohnish's goal is to beat the index by 3% annually.<br><br>This past summer 3 interns worked part time on the checklist 2.0. They identified mistakes by great investors that resulted in a permanent loss of capital and analyzed why the mistakes occurred. They looked for commentary by the fund managers on these mistakes. They found that these investors almost never discussed their mistakes.<br><br>The biggest mistake was an investment in AIG by the Davis Fund which resulted in a $2 billion loss for the fund.<br><br>Mohnish said that the checklist is a great weapon in the Pabrai Funds arsenal.<br> <br>Mohnish then went through one winner and one loser in the portfolio.<br><br>The worst investment during the period was Ternium which was actually sold at a small gain.<br><br>The winner he discussed was Teck cominco. This is the best investment the fund has ever made. The Pabrai Funds made an 8x return in only 3 months. Mohnish invested because they have some of the lowest cost mines in the world. The reason they were so cheap was because of a liquidity mismatch on the balance sheet. It had a large amount of debt coming due in a year. Mohnish felt that if they weren't able to refinance the debt that they could sell assets piecemeal because of their highly diversified operations. In the worse case, the company would be worth a lot even in reorganizations because its book value was so high.<br><br><br><b>Question and Answer:</b><br><br><div><br><br><b>How Long did you follow Teck Cominco before buying?</b><br><br>Mohnish said he spent less than 5 days researching Teck because there were so many bargains at this time. Teck had a very solid moat because it was the lowest cost producer. To find Teck he looked at industry cost curves and paid attention to the lowest cost producers. The most important question to figure out was the liquidity mismatch.<br><br><b>Thoughts on Fairfax?</b><br><br>He doesn't discuss current holdings.<br><br><b>Why don't you discuss current holdings?</b></div><br>If investors get in the habit of discussing their investments they may end up suffering from commitment bias. If they constantly talk about how great a company is, they may suffer from a bias that could impair their judgment.<br><br><b>What are your views on position sizing?</b><br><br>His allocation policy changed in 2008 to reflect slightly elevated investment risks of his investment baskets and prior mistakes. If he has 10% positions it's very hard to recover from a mistake. He discussed his new allocation framework with Charlie Munger who disagreed at first. After Mohnish explained it further, Charlie agreed that Berkshire Hathaway has achieved success with a more diversified portfolio. Mohnish talked about basket bets. When the risk is slightly elevated he will buy a basket of companies with small weightings. For example, he said he is currently researching companies in Japan. If he ends up buying companies there, he will buy a basket of companies each with small weightings in the portfolio. He said stocks there are very cheap.<br><br><b>What attracts you to a business?</b><br><br>When he finds a company that looks interesting he starts by thinking as a skeptic. He looks for something that will prove him wrong. He looks for areas of extreme mispricing. It has to be very undervalued but he also has to be able to understand it. He thinks there may be value in Coke bottlers in Japan. The Nikkei has done nothing for 27 years.<br><br><b>Has the increasing size of the fund negatively affect performance?</b><br><br>The performance of the fund has not been affected by size or fund inflows. He said that the fund is sitting on a lot of undervalue assets.<br><br><b>Has the economic turmoil changed your model?</b><br><br>Mohnish said he has more of an appreciation for macro issues than he has in the past. He also said that some macro trends make sense to base investments on. But the majority of macros trends such as inflation and interest rates are very difficult to predict and he doesn't make judgments on those.<br><br><b>What are your thoughts on the financial industry?</b><br><br>Understanding management is key. You want to look for competent and honest managers. Because of the high leverage, management cannot make any mistakes in reserving. Also, it's very difficult for outsiders to understand reserving. He couldn't understand Citibank.<br><br><b>How much time do you spend on the balance sheet of companies you invest in?</b><br><br>Before he invested in Teck Cominco he read the last 8 years of annual reports. He spends a lot of time on the balance sheet.<br> <br><b>What's your philosophy on timing buying and selling?</b><br><br>He expects to be wrong in the future on selling. He said its fine to sell to early. If a stock goes down after he buys it that's fine as long as he is still right about intrinsic value and he has dry powder to invest.<br><br><b>What did you identify with the checklist project?</b><br><br>The mistakes were concentrated in 08-09 and included a lot of financials. A lot of the mistakes were similar so he just picked a few. He analyzed Longleaf's investment in GM. Longleaf's management discussed the GM thesis in its reports. The mistake they made was they missed the forest from the trees. They missed the big picture. They figured that because GM did so well in the truck market that that would carry them through. They missed the fact that gas prices would rise to $3. He also said that he greatly respects these managers but that it's important to learn from them. Longleaf also made the mistake of looking at the wrong variables.<br><br><b>How do you know where the edge of your circle of competence is?</b><br><br>If you have to ask yourself that question when looking at a company, then it's probably beyond your circle of competence. You have to be honest with yourself. In the case of the Japanese companies he is researching, he has no interest in American listed Japanese companies. He will use the basket approach to Japanese companies because of the unfamiliarity. He also said that these Japanese companies are extremely cheap.<br><br><b>A business owner in the audience said after analyzing his own mistakes he noticed many of his mistakes were repeated. He asked if Mohnish had made a mistake more than once and was susceptible to reoccurring mistakes in one area?</b><br><br>Chris Davis wrote about a mistake he made in 2002. He ended up making the same mistake again in 2008 with AIG. Buffett made the same mistake twice as well with the original Berkshire Hathaway purchased and later on, with the Dexter Shoe purchase. Leverage is a very important factor to consider. One item on the check list is whether or not he suffers from any personal biases. The checklist forces him to take a step back.<br><br><b>Do you see any bubbles today?</b><br><br>Bubbles are hard to spot. Real estate in certain parts of China is probably a bubble. There are many bubbles around all the time. He mentioned a book called Trendwatching.<br><br><b>What's your philosophy on investing in foreign markets?</b><br><br>He said that investing in US and Canadian companies that are driven by Chinese factors would be of interest to him. It's important to understand foreign growth. You have to watch out for bubbles. China and India have good prospects but there may be an overall bubble. He's very reluctant to invest in China but he's interested in benefiting from Chinese growth. He skips Chinese companies because of accounting.<br><br><b>What does he think about natural gas companies?</b><br><br>The industry may be subject to a disruptive shift because of technological changes. The low prices may be permanent but he has no idea. The only good way to invest would be at the bottom of the cost curve and he can't find one. There is no choke point in natural gas unlike iron ore. Natural gas also has substitutes. Mohnish recommended the book, Rational Optimist. He talked about how cheap energy allows countries to create more fresh water which will allow more agriculture.<br><br><b>How do you prevent macro issues from blinding investments?</b><br><br>He's learned to appreciate macro issues more than in the past. As an investor you can't get a handle on all factors. So it makes sense to spread ideas out more. The micro factors trump the macro factors. The company has to be able to control its destiny. He looks for staying power so the company can withstand shocks.<br><br><b>This question came from an investor who has to pull out money for living expenses. He asked how he can get more visibility on what taxes will be?</b><br><br>Mohnish practices tax planning in the funds. He sells holdings between the funds to cancel capital gains. The statements sent to shareholders should give them a good idea what the expected tax rate will be. Mohnish is a big tax payer so he is very sensitive to tax issues.<br><br><b>Is your philosophy on portfolio allocation shifting more towards preserving wealth instead of growing it?</b><br><br>The Kelly Formula is only correct when making many bets. He always under bet the Kelly Formula. Since Mohnish is making few bets, the Kelly Formula doesn't work. He never fully used the Kelly Formula because it would have told him to bet more heavily. Return of capital is more important than return on capital. If people redeem their money during down times that is permanently lost capital for those people.<br><br><b>Can you name some great companies that you'd love to own at the right price?</b><br><br>Ikea, In and Out Burger, Costco, the low cost mines owned by BHP and Rio Tinto. Great companies are all over the place across the world. There are great companies in India and China but and ownership issues exists over there. Pricing is also an issue. Ben Graham's approach was to go to the store and buy what was on sale and Charlie Munger's approach is to go to the store and wait for quality items to go on sale. He likes Charlie's framework.<br><br><b>What extra work do you do to analyze financials?</b><br><br>He's reluctant to own most financials. They do own Goldman Sachs. He's read two books on Goldman. It's a great business. He doesn't have a problem with management ethos but it's improving. It's a very complex business. They have the potential to grow huge overseas because they have few offices overseas right now. Since it has opaque parts to its business he made it a basket bet.<br><br><b>Does checklist address good portfolio strategies?</b><br><br>No. The checklist deals with analyzing companies. Mohnish recommended that this person read the fundamental value investing books. Mohnish always tries to learn from others.<br><br><b>Would you be more interested in a more certain intrinsic value or a cheaper price?</b><br><br>Currently the fund holds a lot of cash as there is less cash in the fund he demands higher discounts for new investments. I wasn't able to too write down most of his answer.<br><br><b>What's your average cash level since 1999?</b><br><br>In a crisis, cash plus courage is priceless. Next times a crisis strikes, he wants more cash. Instead of jumping from his second best to his best idea he instead lets investments play out and clings to ideas instead of jumping around.<br><br><b>How does Mohnish spend his free time?</b><br><br>He does plenty of other things. He has a daily nap, plays racquetball and plays bridge.<br><br><br><a href="http://www.forbes.com/forbes/2004/0607/154_print.html">http://www.forbes.com/forbes/2004/0607/154_print.html</a><br> <h4>There is only one Warren Buffett but many who profess to be his disciples. Here are three stock pickers trying to beat the money master at his own game.</h4> <span class="mainarttxt"> </span><table width="150" align="left" border="0" cellpadding="0" cellspacing="0"> <tbody><tr> <td><img src="http://images.forbes.com/media/faces/b/buffett_warren.jpg" width="150" border="0" height="140"></td><td rowspan="2" width="10"> </td> </tr> <tr> <td class="mainartphototxt">Berkshire Hathaway Chairman Warren Buffett<br> </td> </tr> </tbody></table><span class="mainarttxt"> The Berkshire Hathaway annual meeting takes over Omaha every spring with the force of a Hell's Angels rally. The cheapest tickets cost $3,000, the price of a Berkshire Hathaway B share. This year's hoopla drew 19,500 shareholders eager to glean advice from the investment sage. Alas, Buffett's musings are philosophical and historical; he doesn't give stock tips.</span> <br> <br> <span class="mainarttxt">That doesn't stop Buffett fans from trying to imitate him. They may ape his stock purchases once Berkshire's holdings become public. Or they may apply his style of value management to the selection of other stocks. But nobody else's stock-picking record comes close to Buffett's in both cumulative percentage gain and dollar magnitude. Berkshire shares were worth $15 apiece when he took over the company 39 years ago; now they go for $85,500, and the company's market value is $131 billion. In recent years, however, the performance engine has lost some steam, and some imitation Buffetts are doing better than the real thing.</span> <br> <br> <span class="mainarttxt"> <table width="100%" border="0" cellpadding="1" cellspacing="0"> <tbody><tr bgcolor="#b4d80f"> <td class="white" colspan="6"><b>The Sincerest Form of Flattery</b></td> </tr> <tr bgcolor="#b4d80f"> <td colspan="6">Two beat Warren, one tied. The oldest fund lags: Sequoia, closed to new money.</td> </tr> <tr valign="bottom" align="center" bgcolor="#fbfde1"> <td> </td> <td bgcolor="#edfb99"> </td> <td class="txtsize" colspan="2"><b>ANNUALIZED RETURN</b></td> <td colspan="2" bgcolor="#edfb99"> </td> </tr> <tr valign="bottom" align="center" bgcolor="#fbfde1"> <td align="left"><b>Fund</b></td> <td bgcolor="#edfb99"><b>Inception<br>date</b></td> <td><b>since<br>inception</b></td> <td><b>in Berkshire Hathaway<br>since fund's inception</b></td> <td bgcolor="#edfb99"><b>Minimum<br> initial<br>investment</b></td> <td><b>Expenses<br>per $100</b></td> </tr> <tr bgcolor="#908765"> <td colspan="6" height="3"><br></td> </tr> <tr valign="bottom" align="center" bgcolor="#fbfde1"> <td align="left"><b>Fairholme</b></td> <td bgcolor="#edfb99">12/29/99</td> <td>18.1%</td> <td>13.9%</td> <td bgcolor="#edfb99">$2,500</td> <td>$1.00</td> </tr> <tr bgcolor="#000000"> <td colspan="6" height="1"><br></td> </tr> <tr valign="bottom" align="center" bgcolor="#fbfde1"> <td align="left"><b>Pabrai</b></td> <td bgcolor="#edfb99">7/1/99</td> <td>35.3</td> <td>14.2</td> <td bgcolor="#edfb99">100,000</td> <td>-*</td> </tr> <tr bgcolor="#000000"> <td colspan="6" height="1"><br></td> </tr> <tr valign="bottom" align="center" bgcolor="#fbfde1"> <td align="left"><b>Sequoia</b></td> <td bgcolor="#edfb99">7/15/70</td> <td>16.5</td> <td>26.3</td> <td bgcolor="#edfb99">closed</td> <td>1.00</td> </tr> <tr bgcolor="#000000"> <td colspan="6" height="1"><br></td> </tr> <tr valign="bottom" align="center" bgcolor="#fbfde1"> <td align="left"><b>Wisdom**</b></td> <td bgcolor="#edfb99">2/16/99</td> <td>5.2</td> <td>5.2</td> <td bgcolor="#edfb99">2,500</td> <td>1.50</td> </tr> <tr bgcolor="#000000"> <td colspan="6" height="1"><br></td> </tr> <tr> <td class="footnotetxt" colspan="6"><i>Prices as of Apr. 30, except Pabrai, as of Mar. 31. *Fund charges 25% of profits after 6% return. **Has maximum 5.75% front-end sales charge. Sources: Lipper; FT Interactive Data via FactSet Research Systems; Pabrai Investment Funds.</i></td> </tr> </tbody></table> </span> <br> <br> <table width="100%" border="0" cellpadding="1" cellspacing="0"> <tbody><tr> <td><br></td> <td align="right"><a href="http://www.forbes.com/forbes/2004/0607/154_2.html"><img src="http://images.forbes.com/images/forbes/2004/0607/next.gif" width="70" border="0" height="30"></a></td> </tr> </tbody></table> <br> <br> <table width="774" border="0" cellpadding="0" cellspacing="0"><tbody><tr><td valign="top" width="426"><style>.box { border: 1px solid rgb(0, 0, 0); }.txt { font-size: 12px; padding: 1pt 2pt 2pt; }.blk { color: rgb(0, 0, 0); font-size: 14px; }</style><table type="variable" class="box" width="400" align="center" border="0" cellpadding="1" cellspacing="0"> <tbody><tr valign="top" align="center" bgcolor="#99cc33"> <td class="txt"> •<a href="http://www.forbes.com/free_forbes/2004/0607/154.html">Investing Like Warren Buffett</a></td> <td class="txt"> •<a href="http://www.forbes.com/free_forbes/2004/0607/172.html">20 Stocks For The Long Haul</a></td> <td class="txt"> •<a href="http://www.forbes.com/free_forbes/2004/0607/182.html">Condos With Room Service</a></td> <td class="txt"> •<a href="http://www.forbes.com/free_forbes/2004/0607/186.html">Buying College Admission</a></td> </tr><tr valign="top"><td colspan="4" bgcolor="#000000" height="1"><br></td></tr><tr><td colspan="4" align="center" bgcolor="#ccff33"><a href="http://www.forbes.com/2004/05/19/04igland.html"><img src="http://images.forbes.com/media/2004/0607/04ig_wide_400_50.gif" width="400" border="0" height="50"></a></td> </tr><tr valign="top"><td colspan="4" bgcolor="#000000" height="1"><br></td></tr><tr valign="top" align="center" bgcolor="#99cc33"> <td class="txt"> •<a href="http://www.forbes.com/free_forbes/2004/0607/192.html">Workers' Safety Net</a></td> <td class="txt"> •<a href="http://www.forbes.com/free_forbes/2004/0607/197.html">Guide To Deducting Losses</a></td> <td class="txt"> •<a href="http://www.forbes.com/free_forbes/2004/0607/204.html">Estate Planning</a></td> <td class="txt"> •<a href="http://www.forbes.com/free_forbes/2004/0607/208.html">Investing In Thoroughbreds</a></td> </tr><tr valign="top"><td colspan="4" bgcolor="#000000" height="1"><br></td></tr><tr><td colspan="4" bgcolor="#ffff00" height="3"> <br></td></tr><tr valign="top"><td colspan="4" bgcolor="#000000" height="1"><br></td></tr><tr align="center" bgcolor="#99cc33"><td colspan="4" class="txt"><b>In Pictures:</b></td> </tr> <tr align="center" bgcolor="#99cc33"> <td colspan="4"><a>Five-Star Living</a><br><a>Investing In Your Child's Future</a> </td></tr><tr align="center" bgcolor="#99cc33"><td colspan="4" class="txt"><b>Video:</b> <a href="http://www.forbes.com/video_content/2004/05/20/maidment_ig.html">Prospering In Trying Times</a> </td> </tr><tr valign="top" align="center" bgcolor="#99cc33"><td colspan="4" class="txt"><b>Poll:</b> <a href="http://forums.prospero.com/n/mb/message.asp?webtag=fdc_invguide&msg=6.1&ctx=0">Where Will The Stock Market Be Next Year?</a></td> </tr></tbody></table> <style>.stocksnbonds { background-color: rgb(153, 204, 0); color: rgb(255, 255, 255); padding: 1px; width: 100%; }</style> <h4 class="stocksnbonds">The Asset-Watcher</h4> <span class="mainarttxt"><img src="http://images.forbes.com/images/forbes/2004/0607/prabai.jpg" width="423" border="0" height="340"><br> <span class="mainartphototxt">Mohnish Pabrai stays closer to Buffett's mentor, Ben Graham, than Buffett himself does these days.</span></span> <br> <br> <span class="mainarttxt">High fees make this magazine skeptical of hedge funds but don't stop us from admiring their stock-selection skills. Los Angeles hedge fund manager Mohnish Pabrai, 39, seems to have some talent as a stock picker. Since he started Pabrai Investment Funds in 1999, he has delivered a 35.3% compound annual return (after fees), to the 14.2% a year you would have made owning Berkshire shares.</span> <br> <br> <span class="mainarttxt"> <style>.box { border: 1px solid rgb(0, 51, 102); }.txt { font-size: 12px; }.blk { color: rgb(0, 0, 0); font-size: 12px; }</style><table width="170" align="left" bgcolor="#ffffff" border="0" cellpadding="0" cellspacing="0 "> <tbody><tr><td><table class="box" width="150" bgcolor="#99cc33" border="0" cellpadding="3" cellspacing="0 "><tbody><tr><td align="center" bgcolor="#99cc33"><a href="http://www.forbes.com/2004/05/19/04igland.html"><img src="http://images.forbes.com/media/2004/0607/04ig_click_150_80.gif" width="150" border="0" height="80"></a></td> </tr><tr><td bgcolor="#ffcc33" height="1"><br></td></tr><tr><td class="txt" align="center"> •<a href="http://www.forbes.com/2004/05/19/04igland.html">Investment Guide</a></td></tr><tr><td bgcolor="#ffcc33" height="1"><br> </td></tr><tr><td class="blk" align="center"><b>Stocks And Bonds:</b></td></tr><tr><td class="txt" align="center"> •<a href="http://www.forbes.com/free_forbes/2004/0607/154.html">Investing Like Warren Buffett</a></td></tr> <tr><td class="txt" align="center"> •<a href="http://www.forbes.com/free_forbes/2004/0607/172.html">20 Stocks For The Long Haul</a></td></tr><tr><td bgcolor="#ffcc33" height="1"><br></td></tr><tr><td class="blk" align="center"> <b>Real Estate:</b></td></tr><tr><td class="txt" align="center"> •<a href="http://www.forbes.com/free_forbes/2004/0607/182.html">Condos With Room Service</a></td></tr><tr><td bgcolor="#ffcc33" height="1"><br></td></tr><tr> <td class="blk" align="center"><b>Education:</b></td></tr><tr><td class="txt" align="center"> •<a href="http://www.forbes.com/free_forbes/2004/0607/186.html">Buying College Admission</a></td></tr><tr><td bgcolor="#ffcc33" height="1"> <br></td></tr><tr><td class="blk" align="center"><b>Insurance:</b></td></tr><tr><td class="txt" align="center"> •<a href="http://www.forbes.com/free_forbes/2004/0607/192.html">Workers' Safety Net</a></td></tr><tr><td bgcolor="#ffcc33" height="1"> <br></td></tr><tr><td class="blk" align="center"><b>Taxes:</b></td></tr><tr><td class="txt" align="center"> •<a href="http://www.forbes.com/free_forbes/2004/0607/197.html">Guide To Deducting Losses</a></td></tr><tr><td class="txt" align="center"> •<a href="http://www.forbes.com/free_forbes/2004/0607/204.html">Estate Planning</a></td></tr><tr><td bgcolor="#ffcc33" height="1"><br></td></tr><tr><td class="blk" align="center"><b>Flings:</b></td></tr><tr><td class="txt" align="center"> •<a href="http://www.forbes.com/free_forbes/2004/0607/208.html">Investing In Thoroughbreds</a></td></tr></tbody></table></td></tr></tbody></table> There are two reasons the $116 million portfolio has done better than the competition in Omaha. One, says Pabrai, is that he doesn't try to emulate Berkshire's holdings in wholly owned subsidiaries. That has kept him out of property/casualty insurance, which accounts for a big part of Berkshire's revenue and had suffered some setbacks (such as claims from Sept. 11). The other is that he hews a little more closely to the kind of value investing espoused by Buffett's mentor, Benjamin Graham. Graham liked to buy companies for less than net current assets, meaning cash, inventory and receivables minus all obligations. Buffett has pushed the definition of intrinsic value in new directions. He is willing to pay for intangibles, like a consumer brand name or a newspaper monopoly, provided those assets throw off "owner's profits"--cash that can be extracted from a business after necessary capital outlays are paid for.</span> <br> <br> <span class="mainarttxt">Like Buffett, Pabrai keeps his distance from Wall Street. He buys no research and has no hired help. If he can't understand a company, he doesn't buy the stock. Further, Pabrai won't meet with a company's executives; if he socializes with one, he'll never invest in the stock. "Chief executives are salesmen, as Graham says," Pabrai intones. "That's how they get their jobs."</span> <br> <br> <span class="mainarttxt">Pabrai last year bought the Norwegian oil tanker firm Frontline when shipping rates fell to $5,000 a day. To remain profitable, the company needs rates of at least $18,000 a day on its 70 double-hulled oil tankers. Investors fled the stock, and it fell to $3. Frontline wasn't a classic Graham value play since it didn't have much in the way of net current assets. But it did have hard assets--those tankers.</span> <br> <br> <span class="mainarttxt">After noticing the stock on a new lows list, Pabrai looked into the oil shipping business and discovered that small Greek shippers with near-obsolete single-hulled tankers were being hurt more than Frontline and were selling their ships for scrap. So he knew that when oil demand next surged, Frontline would be better able to command premium rates. Near the end of 2003 Frontline was charging $50,000 a day per tanker. Pabrai is long gone, but the stock, at $29 a share, trades at a cheap five times trailing earnings.</span> <br> <br> <span class="mainarttxt">In 2002 he beat Buffett to the convertible bonds of Level 3 Communications. Like his hero, Pabrai saw value in telecom's distress.</span> <br> <br> <table width="100%" border="0" cellpadding="1" cellspacing="0"> <tbody><tr> <td><a href="http://www.forbes.com/forbes/2004/0607/154.html"><img src="http://images.forbes.com/images/forbes/2004/0607/prev.gif" width="70" border="0" height="30"></a></td> <td align="right"><a href="http://www.forbes.com/forbes/2004/0607/154_3.html"><img src="http://images.forbes.com/images/forbes/2004/0607/next.gif" width="70" border="0" height="30"></a></td> </tr> </tbody></table> <br> <br> <style>.box { border: 1px solid rgb(0, 0, 0); }.txt { font-size: 12px; padding: 1pt 2pt 2pt; }.blk { color: rgb(0, 0, 0); font-size: 14px; }</style><table type="variable" class="box" width="400" align="center" border="0" cellpadding="1" cellspacing="0"> <tbody><tr valign="top" align="center" bgcolor="#99cc33"> <td class="txt"> •<a href="http://www.forbes.com/free_forbes/2004/0607/154.html">Investing Like Warren Buffett</a></td> <td class="txt"> •<a href="http://www.forbes.com/free_forbes/2004/0607/172.html">20 Stocks For The Long Haul</a></td> <td class="txt"> •<a href="http://www.forbes.com/free_forbes/2004/0607/182.html">Condos With Room Service</a></td> <td class="txt"> •<a href="http://www.forbes.com/free_forbes/2004/0607/186.html">Buying College Admission</a></td> </tr><tr valign="top"><td colspan="4" bgcolor="#000000" height="1"><br></td></tr><tr><td colspan="4" align="center" bgcolor="#ccff33"><a href="http://www.forbes.com/2004/05/19/04igland.html"><img src="http://images.forbes.com/media/2004/0607/04ig_wide_400_50.gif" width="400" border="0" height="50"></a></td> </tr><tr valign="top"><td colspan="4" bgcolor="#000000" height="1"><br></td></tr><tr valign="top" align="center" bgcolor="#99cc33"> <td class="txt"> •<a href="http://www.forbes.com/free_forbes/2004/0607/192.html">Workers' Safety Net</a></td> <td class="txt"> •<a href="http://www.forbes.com/free_forbes/2004/0607/197.html">Guide To Deducting Losses</a></td> <td class="txt"> •<a href="http://www.forbes.com/free_forbes/2004/0607/204.html">Estate Planning</a></td> <td class="txt"> •<a href="http://www.forbes.com/free_forbes/2004/0607/208.html">Investing In Thoroughbreds</a></td> </tr><tr valign="top"><td colspan="4" bgcolor="#000000" height="1"><br></td></tr><tr><td colspan="4" bgcolor="#ffff00" height="3"> <br></td></tr><tr valign="top"><td colspan="4" bgcolor="#000000" height="1"><br></td></tr><tr align="center" bgcolor="#99cc33"><td colspan="4" class="txt"><b>In Pictures:</b></td> </tr> <tr align="center" bgcolor="#99cc33"> <td colspan="4"><a>Five-Star Living</a><br><a>Investing In Your Child's Future</a> </td></tr><tr align="center" bgcolor="#99cc33"><td colspan="4" class="txt"><b>Video:</b> <a href="http://www.forbes.com/video_content/2004/05/20/maidment_ig.html">Prospering In Trying Times</a> </td> </tr><tr valign="top" align="center" bgcolor="#99cc33"><td colspan="4" class="txt"><b>Poll:</b> <a href="http://forums.prospero.com/n/mb/message.asp?webtag=fdc_invguide&msg=6.1&ctx=0">Where Will The Stock Market Be Next Year?</a></td> </tr></tbody></table> <style>.stocksnbonds { background-color: rgb(153, 204, 0); color: rgb(255, 255, 255); padding: 1px; width: 100%; }</style> <h4 class="stocksnbonds">The Copycat</h4> <span class="mainarttxt">C. Douglas Davenport, manager of the $52 million Wisdom Fund in Atlanta, is Buffett's shadow. If Buffett does something, Davenport will, too--going so far as to buy proxy stocks for companies that Berkshire acquires. Davenport keeps the identical proportion of cash that Berkshire does, a sizable 22% of his portfolio.</span> <br> <br> <span class="mainarttxt">Davenport's fund, with backing from Sir John Templeton's family, started in early 1999 as the Berkshire Fund but changed its name after the real Berkshire complained. Davenport, 53, follows Berkshire's public filings and news reports to see what Buffett has been up to. "Buffett is quite well followed. It's amazing how much you can find out about the man on the Internet," he says. Thus Davenport has 8% of his assets in Coca-Cola, and 4% in American Express, just like Berkshire.</span> <br> <br> <span class="mainarttxt">When Berkshire acquired carpetmaker Shaw Industries in 2001, Davenport went after competitor Mohawk Industries, waiting two weeks for its share price to settle down. Last year Berkshire bought Clayton Homes, a builder of prefab homes, and Davenport bought into similar Champion Enterprises. To roughly match Berkshire's huge stakes in auto insurance and reinsurance, Davenport has American International Group.</span> <br> <br> <span class="mainarttxt">Since inception just over five years ago Wisdom is up an annual 5.2%, after its 1.5% expense ratio, matching Berkshire's showing. </span> <br> <br> <table width="100%" border="0" cellpadding="1" cellspacing="0"> <tbody><tr> <td><a href="http://www.forbes.com/forbes/2004/0607/154_2.html"><img src="http://images.forbes.com/images/forbes/2004/0607/prev.gif" width="70" border="0" height="30"></a></td> <td align="right"><a href="http://www.forbes.com/forbes/2004/0607/154_4.html"><img src="http://images.forbes.com/images/forbes/2004/0607/next.gif" width="70" border="0" height="30"></a></td> </tr> </tbody></table> <br> <br> <style>.box { border: 1px solid rgb(0, 0, 0); }.txt { font-size: 12px; padding: 1pt 2pt 2pt; }.blk { color: rgb(0, 0, 0); font-size: 14px; }</style><table type="variable" class="box" width="400" align="center" border="0" cellpadding="1" cellspacing="0"> <tbody><tr valign="top" align="center" bgcolor="#99cc33"> <td class="txt"> •<a href="http://www.forbes.com/free_forbes/2004/0607/154.html">Investing Like Warren Buffett</a></td> <td class="txt"> •<a href="http://www.forbes.com/free_forbes/2004/0607/172.html">20 Stocks For The Long Haul</a></td> <td class="txt"> •<a href="http://www.forbes.com/free_forbes/2004/0607/182.html">Condos With Room Service</a></td> <td class="txt"> •<a href="http://www.forbes.com/free_forbes/2004/0607/186.html">Buying College Admission</a></td> </tr><tr valign="top"><td colspan="4" bgcolor="#000000" height="1"><br></td></tr><tr><td colspan="4" align="center" bgcolor="#ccff33"><a href="http://www.forbes.com/2004/05/19/04igland.html"><img src="http://images.forbes.com/media/2004/0607/04ig_wide_400_50.gif" width="400" border="0" height="50"></a></td> </tr><tr valign="top"><td colspan="4" bgcolor="#000000" height="1"><br></td></tr><tr valign="top" align="center" bgcolor="#99cc33"> <td class="txt"> •<a href="http://www.forbes.com/free_forbes/2004/0607/192.html">Workers' Safety Net</a></td> <td class="txt"> •<a href="http://www.forbes.com/free_forbes/2004/0607/197.html">Guide To Deducting Losses</a></td> <td class="txt"> •<a href="http://www.forbes.com/free_forbes/2004/0607/204.html">Estate Planning</a></td> <td class="txt"> •<a href="http://www.forbes.com/free_forbes/2004/0607/208.html">Investing In Thoroughbreds</a></td> </tr><tr valign="top"><td colspan="4" bgcolor="#000000" height="1"><br></td></tr><tr><td colspan="4" bgcolor="#ffff00" height="3"> <br></td></tr><tr valign="top"><td colspan="4" bgcolor="#000000" height="1"><br></td></tr><tr align="center" bgcolor="#99cc33"><td colspan="4" class="txt"><b>In Pictures:</b></td> </tr> <tr align="center" bgcolor="#99cc33"> <td colspan="4"><a>Five-Star Living</a><br><a>Investing In Your Child's Future</a> </td></tr><tr align="center" bgcolor="#99cc33"><td colspan="4" class="txt"><b>Video:</b> <a href="http://www.forbes.com/video_content/2004/05/20/maidment_ig.html">Prospering In Trying Times</a> </td> </tr><tr valign="top" align="center" bgcolor="#99cc33"><td colspan="4" class="txt"><b>Poll:</b> <a href="http://forums.prospero.com/n/mb/message.asp?webtag=fdc_invguide&msg=6.1&ctx=0">Where Will The Stock Market Be Next Year?</a></td> </tr></tbody></table> <style>.stocksnbonds { background-color: rgb(153, 204, 0); color: rgb(255, 255, 255); padding: 1px; width: 100%; }</style> <h4 class="stocksnbonds">Berkshire With Special Sauce</h4> <span class="mainarttxt">The Fairholme Fund, managed in Short Hills, N.J. by Bruce Berkowitz, Larry S. Pitkowsky and Keith Trauner, has a fourth of its $130 million in Berkshire shares. But it has done better with its non-Berkshire holdings. Net of 1% in overhead, Fairholme has returned 18.1% a year since its inception in 2000, besting Berkshire's 13.9%.</span> <br> <br> <span class="mainarttxt">The fund's second-largest holding is Leucadia National, a Berkshire-like conglomerate run by recent Buffett partners Joseph Steinberg and Ian Cumming. Alongside Buffett, Fairholme invested in White Mountains Insurance Group, holding on even after the Sept. 11 attacks, when insurance stocks looked dicey. Fairholme makes bets on distressed companies that would scare off a classic Grahamite. In 2002 it started buying debt of troubled Williams Communications, saw that debt converted to equity in a reorganization and bought more equity. When Leucadia acquired the business last year, Fairholme's stake appreciated 50%. </span> <br> </td></tr></tbody></table><br></div></div></div><br></div> Dance With Mehttp://www.blogger.com/profile/11452760400913968147noreply@blogger.com15tag:blogger.com,1999:blog-3761262596373585191.post-81367886304497336502010-11-13T18:16:00.001-08:002010-11-13T18:16:43.357-08:00Graham's two appraoches: less than net current asset or 7 PEMy first, more limited, technique confines itself to the purchase of common stocks at less than<br>their working-capital value, or net-current-asset value, giving no weight to the plant and other<br>fixed assets, and deducting all liabilities in full from the current assets. We used this approach<br> extensively in managing investment funds, and over a 30-odd year period we must have earned<br>an average of some 20 per cent per year from this source. For a while, however, after the mid-<br>1950's, this brand of buying opportunity became very scarce because of the pervasive bull<br> market. But it has returned in quantity since the 1973-74 decline. In January 1976 we counted<br>over 300 such issues in the Standard & Poor's Stock Guide--about 10 per cent of the total. I<br>consider it a foolproof method of systematic investment--once again, not on the basis of<br> individual results but in terms of the expectable group outcome.<br><br>The second approach is similar to the first in its underlying philosophy. It consists of buying<br>groups of stocks at less than their current or intrinsic value as indicated by one or more simple<br> criteria. The criterion I prefer is seven times the reported earnings for the past 12 months.<br>You can use others--such as a current dividend return above seven per cent or book value more<br>than 120 percent of price, etc. We are just finishing a performance study of these approaches<br> over the past half-century--1925-1975. They consistently show results of 15 per cent or better per<br>annum, or twice the record of the DJIA for this long period. I have every confidence in the<br>threefold merit of this general method based on (a) sound logic, (b) simplicity of application, and<br> (c) an excellent supporting record. At bottom it is a technique by which true investors can exploit<br>the recurrent excessive optimism and excessive apprehension of the speculative public.<br><br>At this point let me consider briefly an approach with which we were closely identified when<br> managing the Graham-Newman fund. This was the purchase of shares at less than their working<br>capital value. That gave such good results for us over a forty-year period of decision making that<br>we eventually renounced all other common-stock choices based on the usual valuation<br> procedures, and concentrated on these "sub-asset stocks". The "renaissance of value", which we<br>are talking about today involves the reappearance of this kind of investment opportunity. A<br>Value-Line publication last month listed 100 such issues in the non-financial category. Their<br> compilation suggests that there must be at least twice as many sub-working capital choices in the<br>Standard & Poor's Monthly Stock Guide. (However, don't waste $25 in sending for an<br>advertised list of "1000 Stocks Priced at Less Than Working Capital". Those responsible<br> inexcusably omitted to deduct the debt and preferred stock liabilities from the working capital in<br>arriving at the amount available for the common.)<br>It seems no more than ordinary sense to conclude that if one can make up, say a 30-stock<br> portfolio of issues obtainable at less than working capital, and if these issues meet other value<br>criteria including the analysts' belief that the enterprise has reasonably good long-term prospects,<br>why not limit one's selection to such issues and forget the more standard valuation methods and<br> choices we have previously discussed? I think the question is a logical one, but it raises various<br>practical issues: How long will such "fire sale stocks" – as Value Line called them – continue to<br>be given away; what would be the consequences if a large number of decision-makers began as<br> of tomorrow to concentrate on that group; what should the analyst do when these are no longer<br>available?<br><br> Dance With Mehttp://www.blogger.com/profile/11452760400913968147noreply@blogger.com0tag:blogger.com,1999:blog-3761262596373585191.post-47741305747609677752010-10-30T07:16:00.000-07:002010-10-30T08:00:36.956-07:00分析一个企业的前景,并且在价位合适的时候购买他的骨牌,并长期持有http://news.imeigu.com/a/1287367441168.html<br /><br />我们看到很多原本我们想象都不可能倒闭的一些公司,你比如说雷曼兄弟,比如说AIG等等,他们最终倒闭了,但是我们看到这两位不倒翁如今非常健康,而且还洋溢着青春的光芒,你们不倒的秘密到底是什么?<br /><br />沃伦•巴菲特:<br /><br />我有一个伟大的老师,大约60年前,他交给我一个重要的原则,从那以后我就一直在实践这个原则。我很幸运,在投资方面我对情绪有很好的掌控力,但是我并没有所谓的投资秘诀。我仔细地考察那些企业,试图弄清楚哪些企业是我了解的,哪些是我不了解的。如果不了解,我就放弃。我需要分析一个企业的前景,并且在价位合适的时候购买他的骨牌,并长期持有,实际就是这么简单。<br /><br />主持人陈伟鸿:<br /><br />你刚才提到的这位老师应该是很多人都知道的格林厄姆,也是把你招进哥伦比亚大学的那位老师,但是他到底给你教了什么样的一个投资理念,让你至今都觉得受用到了现在?<br /><br />沃伦•巴菲特:<br /><br />他教会了我首要的就是不要把股票看成是一个不停上下浮动的东西,不能轻信一些谣言,不能根据谣言判断一只股票真实的价值。买一只股票就意味着投资于一家企业,而自己就相当于是这个企业长期的伙伴,而且你投资的企业应该在他的领域具有优势,从而能够保证企业在一定时期内维持较好的利润。而且他交给我说不要过分地关注你的投资,如果你遵从格林厄姆先生的教导,然后你会发现你的投资几乎是很难赔钱的。短期来看可能有些人比你赚的钱要多,但是只要你不赔钱,你的回报是持续且合理的,所以我听从我老师的教导,查理•芒格也是这样。<br />主持人陈伟鸿:<br /><br />那您老师的这些投资原则,在金融危机当中是不是也经过的检验,是不是它依然是一个灵验的投资方法和投资理念?<br /><br />沃伦•巴菲特:<br /><br />我老师的理念是正确的,说到金融危机,它的确是一场实实在在的危机,而当金融危机发生的时候,某些股票的价格就会走低,这对我们很有吸引力,因为你就可以以更低的价格买进股票。我们的贷款不多,所以我们有足够的实力来应对危机。我们相信整个体系是不会崩溃的,我从来没有怀疑过这一点,所以当机会出现的时候,我们就开张支票把合适的股票买下来。所以行情的好坏从来不会成为我们的困扰,我只是按照老师的教导在合适的价位上买入。<br /><br />主持人陈伟鸿:<br /><br />很多的书上都说老师曾经给你归纳了三大投资原则,或者是五大投资原则,你今天是不是也在现场给我们来归纳一下?<br /><br />沃伦•巴菲特:<br /><br />操作股票的第一大原则就是你要把股票当成一个生意来看,而不要把它仅仅看成是一种上下浮动的有价证券。第二个就是边际效益安全的理念。如果你认为一只股票值十块钱,那么九块五或者是九块七毛五都不要买,你要等价格比你的心理价格低很多的时候再买入。如果一座桥他的载重量是一万吨,那你就不要驾驶一辆 9800吨的卡车从上面经过,但是你可以驶过一座承重量两万吨的桥,这就是一个格林厄姆一个基本的理念。<br /><br />查理•芒格:<br /><br />巴菲特所提到的边际效益安全里面是非常有创新性的,如果不是人生中犯过很多的错误,遇到了很多误会,也不会产生这样的理念。我们的生意做的很成功,我们在国有商业方面的投资可能是美国最好的国有商业。我们的意外险或者财险可能是世界上最好的财险公司,而我们投资的伯灵顿铁路是世界说最好的铁路投资,比亚迪是一个年轻的公司,也是世界上最好的投资之一。眼光保持准确并不是一件很困难的事情,这就是我这些年最大的心得,因为你是跟那些很优秀的人合作,让我感到有意思的是一些卓越的人将公司经营得很成功,而我们买他的股票,这为我们赚到了财富,虽然我们自己用不了那么多。但是我们与很多自己钦佩的人成为的朋友,这是一个非常幸运的人生。而一个股票投机者的生活是非常糟糕的,因为他们总是关注价格波动,但是我们不是这样,所以我们生活得非常快乐,能交很多朋友,不仅让我们生活愉悦,而且这种投资模式非常奏效。<br /><br />比尔•盖茨:<br /><br />巴菲特最擅长于投资的就是他自己很了解的行业和企业,但是像我们微软这样的IT类的股票,恐怕并不是合适他的类型。我觉得重要的是一个人如果要购买 IT行业的股票,那么他一定要了解这个行业的特性,因为IT股是波动比较大的。因为我本人在微软工作,所以我的情况会有把握一些。说的简单一点,巴菲特其实一般都是不碰高科技类的企业的。<br /><br />主持人陈伟鸿:<br /><br />你刚才说不懂的行业你不碰,比尔•盖茨先生也说高科技一些行业可能你也是不碰,但是你注意看一下,坐在比尔•盖茨身旁的就是王传福先生,他们的比亚迪同样是高科技这个领域,而且电动汽车的未来在很多人的眼中可能也是一个具有不确定性的一个发展行业,那么为什么你不投微软,你愿意投比亚迪,你看清楚了他们的未来,你懂这个行业吗?<br /><br />沃伦•巴菲特:<br /><br />我非常理解这个行业,芒格甚至比我了解的更为透彻一些,因为首先是芒格让我关注到比亚迪这一只股票,几年前他就说你应该关注比亚迪,因为当我们看比亚迪的历史记录。其实我对汽车行业还是比较了解的,其实在一般意义上我对汽车行业是比较了解的,王传福用了仅仅15年,甚至是7年短短的时间就在汽车行业做出了了不起的成就,王传福先生还有他的比亚迪公司我觉得是非常有能力的,当然你说在汽车行业未来5年、10年会演变成什么样子,谁也不能说清楚,比如说在太阳能汽车或者是能量储存这方面很难预测。但是在我看来王传福是个很聪明的人,所以我们购买了他股票的10%。我相信未来比亚迪股票的回报率将会被证实是非常可观的。对此查理应该也有话要讲。<br /><br />查理•芒格:<br /><br />比亚迪是我一生当中碰到的最重要的投资机会之一,我们与其他投资者不同的一点是我们并不是太被股票的上上下下波动所左右,作为投资者买卖证券的交易成本是比较高的,所以我们选择长期持有一只股票。我们很高兴地看到自己庞大的资金投资在有限的几只优秀的股票上。我向你们所有人推荐这种投资模式,你只需要进入有限的几个卓越的行业领域,而不是去买卖上百只股票,否则巴菲特会因此而致富,但是你不会,这就是我的建议。<br /><br />沃伦•巴菲特:<br /><br />芒格和我一直在观察汽车这个行业,我们观察了50年,从这种持续的观察中,我们知道一个汽车公司怎样才能获得成功,又会因为什么走向失败,像比亚迪这样的一家企业其实在汽车行业是不多见的,一些IT或者高科技的股票可能一度非常成功,但是我们却做不到持续有地去检测他们。比如说苹果(AAPL,300.98,-1.40%)公司很成功,但是我们并不是很懂这家公司,或者在这个领域中的其他公司。但是可口可乐我就看得懂,我知道像可口可乐这样的公司在未来很多年它都不可能出现什么问题,它明年卖的产品肯定比今年还多,在全球也不会有价格战,也不会缺原材料,所以在世界上人们总是要喝饮料的,饮料总是一种必需品,所以我们看得懂可口可乐的未来,我们就要购买他的股票。而对于比亚迪,我想我们也很确定。<br />我想请问巴菲特先生,就说你在收购喜诗糖果对你的启示当中,你后面投资的可口可乐、吉利等等,这些启示是什么,能不能跟我们一起分享一下。<br /><br />主持人陈伟鸿:<br /><br />包括箭牌口香糖,它们当中到底有什么样的明星基因?<br /><br />沃伦•巴菲特:<br /><br />他们的共同点都是他们都是生产消费品的企业,而且大家都非常喜欢吃特点的产品,喜诗糖果的市场当然规模上比可口可乐要小得多,它不像可口可乐那样风靡全世界,人们对糖果味道的喜好是比较稳定化的,但是对于软饮料来说,各个国家的人的口味差不多。所以喜诗糖果其实是一个中小型的企业,但是它很优秀,它的盈利能力很强,从它那里赚来的钱,可以去收购其他的公司。我收购喜诗糖果是在1972年,当时芒格先生帮了很大的忙,幸运的是我也了解糖果这个行业。<br /><br />我看这个火车是离不开铁路的,我就选铁路,伯灵顿铁路,我注意到巴菲特先生刚刚完成一项重要的并购案,300亿美元收购了伯灵顿铁路,我觉得这是不是标志着、意味着巴菲特先生的投资将从高增长的领域向稳增长的领域过渡。有评论说,巴菲特先生的这项收购价格并不便宜,那么这样大规模的收购,对巴菲特先生这列火车高速运行的速度会不会带来影响。那么为什么说收购的这个资产在未来一百年还会是优良的资产。<br /><br />沃伦•巴菲特:<br /><br />是的,我们花了340亿,这是很大的一笔钱,我们觉得这个价钱很公平,没有什么讨价还价的余地了,如果是在美国的竞争市场上的话,340亿美元购买伯灵顿铁路股票是值得的,因为按照公里数来衡量的话,伯灵顿铁路他的运载量占到的美国的11%,在美国有三亿一千万的人口,有11%的跨城市货运是沿着伯灵顿铁路来运输的,在20年、50年之后,美国人口会增加货物运量也会增加,而铁路是非常高效的货物运输渠道。在美国修建新的铁路的可能性不大,所以我们想扩大铁路投资的份额,但是这个投资是一种比较温和的投资,<span style="font-weight:bold;">它不可能很快增长三倍,但是它很确定,我们很了解这个行业,基本上美国如果想维持繁荣,没有伯灵顿铁路是不可想象的,所以我希望从中能够获得一份利益。</span>Dance With Mehttp://www.blogger.com/profile/11452760400913968147noreply@blogger.com0tag:blogger.com,1999:blog-3761262596373585191.post-78817421586623574392010-10-30T05:18:00.000-07:002010-10-30T05:24:42.888-07:00Learn to be a great investor - reading a lotA QUESTION Warren Buffett and Charlie Munger are often asked is: how do you learn to be a great investor?<br />-<br />“First of all,” says Charlie Munger, “you have to understand your own nature. Each person has to play the game given his own marginal utility considerations and in a way that takes into account his own psychology. If losses are going to make you miserable — and some losses are inevitable — you might be wise to utilise a very conservative pattern of investment and saving all your life. So you have to adapt your strategy to your own nature and your own talents. I don’t think there’s a one-size-fits-all investment strategy that I can give you."<br />-<br />“Next”, says Munger, “you have to gather information. I think both Warren and I learn more from the great business magazines than we do anywhere else. It’s such an easy, shorthand way of getting a vast variety of business experience just to rifle through issue after issue covering a great variety of businesses. And if you get into the mental habit of relating what you’re reading to the basic structure of the underlying ideas being demonstrated, you gradually accumulate some wisdom about investing. I don’t think you can get to be a really good broad-range investor without doing a massive amount of reading. I don’t think any one book will do it for you."<br />-<br />Nor should reading be random: “… you have to have some idea of why you’re looking for the information. Don’t read annual reports the way Francis Bacon said you do science — which, by the way, is not the way to do science — where you just collect endless data and then only later do you try to make sense of it. You have to start with some ideas about reality. And then you have to look to see whether what you’re seeing fits in with proven basic concepts.<br />-<br />“Frequently, you’ll look at a business having fabulous results. And the question is, ‘How long can this continue?’ Well, there’s only one way I know to answer that. And that’s to think about why the results are occurring now — and then to figure out what could cause those results to stop occurring."<br />-<br />“On the other hand,” says Charlie, “if it weren’t a little difficult, everybody would be rich."<br />----------------------<br />(from Buffett’s 1965 letter to Partners)<br />Diversification<br /><br />Last year in commenting on the inability of the overwhelming majority of investment managers to achieve performance superior to that of pure chance, I ascribed it primarily to the product of: "(1) group decisions - my perhaps jaundiced view is that it is close to impossible for outstanding investment management to come from a group of any size with all parties really participating in decisions; (2) a desire to conform to the policies and (to an extent) the portfolios of other large well-regarded organizations; (3) an institutional framework whereby average is "safe" and the personal rewards for independent action are in no way commensurate with the general risk attached to such action; (4) an adherence to certain diversification practices which are irrational; and finally and importantly, (5) inertia.”<br /><br />This year in the material which went out in November, I specifically called your attention to a new Ground Rule reading, "7. We diversify substantially less than most investment operations. We might invest up to 40% of our net worth in a single security under conditions coupling an extremely high probability that our facts and reasoning are correct with a very low probability that anything could drastically change the underlying value of the investment."<br /><br />We are obviously following a policy regarding diversification which differs markedly from that of practically all public investment operations. Frankly, there is nothing I would like better than to have 50 different investment opportunities, all of which have a mathematical expectation (this term reflects the range of all possible relative performances, including negative ones, adjusted for the probability of each - no yawning, please) of achieving performance surpassing the Dow by, say, fifteen percentage points per annum. If the fifty individual expectations were not intercorrelated (what happens to one is associated with what happens to the other) I could put 2% of our capital into each one and sit back with a very high degree of certainty that our overall results would be very close to such a fifteen percentage point advantage.<br /><br />It doesn't work that way.<br /><br />We have to work extremely hard to find just a very few attractive investment situations. Such a situation by definition is one where my expectation (defined as above) of performance is at least ten percentage points per annum superior to the Dow. Among the few we do find, the expectations vary substantially. The question always is, “How much do I put in number one (ranked by expectation of relative performance) and how much do I put in number eight?" This depends to a great degree on the wideness of the spread between the mathematical expectation of number one versus number eight.” It also depends upon the probability that number one could turn in a really poor relative performance. Two securities could have equal mathematical expectations, but one might have .05 chance of performing fifteen percentage points or more worse than the Dow, and the second might have only .01 chance of such performance. The wider range of expectation in the first case reduces the desirability of heavy concentration in it.<br /><br />The above may make the whole operation sound very precise. It isn't. Nevertheless, our business is that of ascertaining facts and then applying experience and reason to such facts to reach expectations. Imprecise and emotionally influenced as our attempts may be, that is what the business is all about. The results of many years of decision-making in securities will demonstrate how well you are doing on making such calculations - whether you consciously realize you are making the calculations or not. I believe the investor operates at a distinct advantage when he is aware of what path his thought process is following.<br /><br />There is one thing of which I can assure you. If good performance of the fund is even a minor objective, any portfolio encompassing one hundred stocks (whether the manager is handling one thousand dollars or one billion dollars) is not being operated logically. The addition of the one hundredth stock simply can't reduce the potential variance in portfolio performance sufficiently to compensate for the negative effect its inclusion has on the overall portfolio expectation.<br /><br />Anyone owning such numbers of securities after presumably studying their investment merit (and I don't care how prestigious their labels) is following what I call the Noah School of Investing - two of everything. Such investors should be piloting arks. While Noah may have been acting in accord with certain time-tested biological principles, the investors have left the track regarding mathematical principles. (I only made it through plane geometry, but with one exception, I have carefully screened out the mathematicians from our Partnership.)<br /><br />Of course, the fact that someone else is behaving illogically in owning one hundred securities doesn't prove our case. While they may be wrong in overdiversifying, we have to affirmatively reason through a proper diversification policy in terms of our objectives.<br /><br />The optimum portfolio depends on the various expectations of choices available and the degree of variance in performance which is tolerable. The greater the number of selections, the less will be the average year-to-year variation in actual versus expected results. Also, the lower will be the expected results, assuming different choices have different expectations of performance.<br /><br />I am willing to give up quite a bit in terms of leveling of year-to-year results (remember when I talk of “results,” I am talking of performance relative to the Dow) in order to achieve better overall long-term performance. Simply stated, this means I am willing to concentrate quite heavily in what I believe to be the best investment opportunities recognizing very well that this may cause an occasional very sour year - one somewhat more sour, probably, than if I had diversified more. While this means our results will bounce around more, I think it also means that our long-term margin of superiority should be greater.Dance With Mehttp://www.blogger.com/profile/11452760400913968147noreply@blogger.com0tag:blogger.com,1999:blog-3761262596373585191.post-82486346685442793642010-10-11T08:16:00.000-07:002010-10-11T08:21:17.820-07:00Buffet: quite clear stocks are cheaper than bonds, believe me, it will come back over timemy comments: let's just hold and wait until "it come back".<br />------------------------<br />Warren Buffett says it is "quite clear stocks are cheaper than bonds" right now, but notes that relationship will change eventually when confidence in the economy is inevitably restored.<br /><br />In an appearance earlier today (Tuesday) at the Fortune Most Powerful Women Conference in Washington, Buffett said he "can't imagine" choosing bonds over stocks at current prices, but concedes that's what many investors have been doing because of a "lack of confidence" in the economy's future. "They're making a mistake, the ones that are buying the bonds" at record low yields.<br /><br />In this video clip, he tells Fortune's Carol Loomis:<br /><br />"It's quite clear that stocks are cheaper than bonds. I can't imagine anybody having bonds in their portfolio when they can own equities, a diversified group of equities. But people do because they, the lack of confidence. But that's what makes for the attractive prices. If they had their confidence back, they wouldn't be selling at these prices. And believe me, it will come back over time."<br /><br />It's not a new opinion for Buffett. Back in early 2009, he was writing about an "extraordinary" U.S. Treasury bond "bubble."<br /><br />Fortune's Street Sweep blog points out that the 10-year Treasury yield has dropped to under 2.5 percent from 4 percent over the past six months.Dance With Mehttp://www.blogger.com/profile/11452760400913968147noreply@blogger.com0tag:blogger.com,1999:blog-3761262596373585191.post-63573323163458002852010-10-07T21:20:00.000-07:002010-10-08T00:06:41.535-07:00你不需要很聪明就可以明白比亚迪是个优秀的公司我从不预测股价,也不看短期的股价波动,我不在乎我投资的公司下一个星期、下一个月、下一个季度利润好不好、股价高不高,我不看短期,只看长期。我投的是这个企业,而不是股票,这是两个概念。我们寻找投资机会时,要看一个企业的市场潜力,比如比亚迪,不管是它所从事的汽车行业还是新能源行业,以后都会发生巨大变化,市场需求巨大,有很多需求尚未得到满足;再看这个企业的竞争优势,比亚迪在这些市场有着显著的竞争优势,技术创新能力很强,你不需要很聪明就可以明白比亚迪是个优秀的公司,它过往的业绩摆在那儿;再看这个企业的领导者,王传福先生十分优秀,年富力强,有的是干劲和激情,他的目标是到2025年成为世界第一大汽车生产商,我觉得这个目标很可能提前几年就可实现了。总之,比亚迪具备一个成功企业的所有要素,只要能够保持前十年的发展势头,不成功是小概率事件。<br /><br />这和两个公司的相对规模有关。<span style="font-weight:bold;">做投资,说到底,就是现在付一笔钱,放到一个你认为很有潜力的企业去,希望这个企业随着时间的推移能够释放实现它的潜力,将来给你带来可观的回报</span>。 Charlie跟我解释了比亚迪的情况后,我觉得这个企业潜力巨大,而且有实现潜力、创造价值的能力,值得投资。如果当时你有钱,我也会建议你投比亚迪,而不是微软;别说是微软,我都不建议你投我们的公司Berkshire Hathway。<br /><br /><br /><br />兄弟情深,相敬如宾<br /><br /> 巴菲特和芒格半个多世纪的友谊一直是投资界的美谈,此次老哥俩携手来华访问,让我们近距离感受到了巴芒相敬如宾的兄弟深情。<br /><br /> 比芒格小六岁的巴菲特处处照顾着芒哥,芒格视力听力不好,但说话滔滔不绝,每次坐在主席台上发言往往忘了翻译的存在,巴菲特会拉拉他的衣袖,然后指着翻译站的方向,提醒芒哥注意停顿给翻译时间翻译,几次之后,芒格形成了条件反射,只要巴爷一碰他,他就马上闭嘴,很听话的样子。而巴菲特对于翻译特别重视,开场白就说:“一般我在中国会用中文发言,不过考虑到翻译小姐的就业问题,我还是改用中文吧。”全场大笑。<br /><br /> 听众提给巴菲特的问题,巴菲特总是找各种理由转给自称爱说教的芒格,给芒格表演的机会,特别是第一个问题和最后一个问题。和比亚迪员工对话时,第一个问题问巴爷对于新能源发展前景的看法,巴爷回答说,“这个问题还是让Charlie回答吧,尽管他只比我大六岁,但是他的智慧比我高深很多,特别是讲到新能源,我就更不是他的对手了。” 最后一个问题是关于再生能源,盖茨回答后,芒格补充了几句,提问者再问巴菲特的观点,巴爷说,“一般一个问题Charlie回答后就盖棺定论了,我没有补充了。” 说完,三人在台上相视而笑。在对话节目中,巴菲特甚至说芒格是我的秘密恋人,对于芒哥的崇敬珍惜溢于言表。精神上如此契合的朋友确实应该比珍惜恋人更珍惜。<br /><br /> 芒格对于巴菲特也是十分尊重,有人问芒格,“您和巴菲特半个世纪的友谊是不是巴菲特成功的重要因素,尽管巴菲特经常抛头露面,而您十分低调,还是有人认为您比巴菲特更重要,对此您怎么看?” 芒格正言道:“完全不是这样!Warren才是最重要的,他比我重要得多,他是一把手,我是二把手,我只能说我在他的事业发展中起到了一定的作用而已。他在幕前我在幕后,这不是有意的安排,是自然而然形成的局面,我觉得这样很好;我没有他那么显赫重要,对此我没有一点点遗憾,我其实比较喜欢这样在幕后。 Warren能力强、人品好,德才兼备,又是个很有趣的人,我很幸运有这样的朋友。在中国关注我的人比在美国多,我觉得主要的原因可能是我的价值观比较接近孔夫子,重原则、重家庭、重教育,强调活到老学到老,学习是一种道德义务,life-long learning as a moral duty,主张用智慧改善人类生存条件,<span style="font-weight:bold;">use your wisdom to make your family and the world better</span>, 务实,不偏执,我没有传统意义上的宗教信仰。但是如果没有巴菲特,我不会得到这么多的关注。” 有时记者会问巴菲特暗藏机关的问题,芒格担心巴菲特落入陷阱,会挺身出来掩护。在长沙站,国外媒体Bloomberg问:“巴菲特先生,您对于人民币汇率问题怎么看?这几天我跟着你们从深圳到北京到长沙,所见所闻都是很积极向上的,中美民间往来还是很友好互惠的。但是美国国会日前通过了一个强迫人民币升值的法案,您是否认为国会通过这样的法案是脱离实际,不识时务?” 芒格代巴菲特回答:“我们只能代表公司说话,我们没有代表政府发言的权利和兴趣,汇率问题是中美两国政府的事,我们不便置喙。我们希望美国政府能够妥善处理好这个问题。” 有时他也会打趣巴菲特,比如,主持人问完巴菲特一个问题,再问芒格怎么看,芒格就说:“我完全同意巴菲特主席的意见(巴菲特是伯克希尔哈斯威的董事局主席,芒格是副主席)。”装出一副跟班小弟的样子。和比亚迪员工对话时,有人问巴菲特,中国有很多优秀的年轻人都以您为榜样,希望能成为“中国的巴菲特”,您觉得他们有机会成为您吗?巴菲特立马把这个问题转给芒格,芒格说:“这个问题得你自己回答了,他们是问能不能成为中国的巴菲特,而不是中国的芒格,我不能代劳。”<br /><br /> 半个多世纪的情谊,创造了500多亿的财富,激励了成千上百万年轻人,一个86岁的老哥,一个80岁的小弟,兄弟情深,令人感动!<br /><br />王传福高,比亚迪强<br /><br /> 此次巴菲特携芒格、盖茨来访,目的何在,众说纷纭。减持说是其中的一个。有人怀疑巴菲特此次拜访比亚迪就像当年拜访中石油一样,是吻别,最后的亲密。众所周知,巴菲特的性格是属于十分不愿意得罪人的那种,他很害怕被人讨厌,一辈子都在很努力地获得大家的好感,所以减持比亚迪之前先来抚慰一下也不是没有可能。但是巴芒在各种场合的言行都彻底粉碎了减持说。 <br /><br /> 在和比亚迪员工对话时,到下半场,终于有人提出了一个萦绕大家心头的尖锐问题,“请问巴菲特先生,您认为比亚迪的股价可以涨到多高?您准备持有多久?” 巴爷不慌不忙地回答:“<span style="font-weight:bold;">我从不预测股价,也不看短期的股价波动,我不在乎我投资的公司下一个星期、下一个月、下一个季度利润好不好、股价高不高,我不看短期,只看长期。我投的是这个企业,而不是股票,这是两个概念。我们寻找投资机会时,要看一个企业的市场潜力,比如比亚迪,不管是它所从事的汽车行业还是新能源行业,以后都会发生巨大变化,市场需求巨大,有很多需求尚未得到满足;再看这个企业的竞争优势,比亚迪在这些市场有着显著的竞争优势,技术创新能力很强,你不需要很聪明就可以明白比亚迪是个优秀的公司,它过往的业绩摆在那儿;再看这个企业的领导者,王传福先生十分优秀,年富力强,有的是干劲和激情,他的目标是到2025年成为世界第一大汽车生产商,我觉得这个目标很可能提前几年就可实现了。总之,比亚迪具备一个成功企业的所有要素,只要能够保持前十年的发展势头,不成功是小概率事件。</span>”<br /><br /> 有的记者比较直接,“您会减持比亚迪的股票吗?”巴菲特直摇头:“当然不会! 我估计在我葬礼上,大家还会说,他还拿着比亚迪的股票呢。” 芒格更是字字铿锵:“到死也不会!” 记者又问了:“既然你们这么看好比亚迪,是否会考虑增持?” 芒格回答:“增持不是我们能说了算了,我们得获得管理层的批准许可,比亚迪并不需要资金以获得更大的成功。”<br /><br /> 巴菲特还多次讲到他当时决定投资比亚迪的故事:“我和Charlie相处51年,他一共给过我三个推荐投资的电话,前面两次也都很不错,第三次就是建议投资比亚迪,我一开始没有马上采取行动,他就打电话来说,如果你不投王传福,就错过第二个亨利福特了,我不为所动;他又打电话来,说,你不投就错过第二个爱迪生了,我还是不为所动;第三次他打电话来,说,你再不投就错过第二个比尔盖茨啦,我一听立马就投了。”说完俏皮地看一眼旁边的比尔盖茨,在全场欢笑中,盖茨也露出了稍带羞涩的笑容。<br /><br /> 有人追问巴菲特:“您和盖茨先生是好朋友,现在和王传福先生也是好朋友,同样是好朋友,为什么王先生的企业您投了,盖茨先生的企业您就没投呢?” 盖茨和芒格都笑眯眯地侧头看着巴菲特,看他怎么回答。这个难不倒巴菲特,只见他呵呵呵笑了几声,开始快速给出他万变不离其中的回答:“这和两个公司的相对规模有关。做投资,说到底,就是现在付一笔钱,放到一个你认为很有潜力的企业去,希望这个企业随着时间的推移能够释放实现它的潜力,将来给你带来可观的回报。 Charlie跟我解释了比亚迪的情况后,<span style="font-weight:bold;">我觉得这个企业潜力巨大,而且有实现潜力、创造价值的能力,值得投资。如果当时你有钱,我也会建议你投比亚迪,而不是微软;别说是微软,我都不建议你投我们的公司Berkshire Hathway。</span>” 这样的自嘲抹去了可能会给盖茨带来的尴尬不悦,巴菲特不愧是卡耐基的信徒。<br /><br /> 巴菲特2008年9月投资比亚迪,这是第一次实地考察,也是第三次来华访问。他说,他是抱着很高的期望来考察的,他对于这次考察所见所闻十分满意,比亚迪的技术、产品、管理团队、员工队伍、和政府的关系等各方面让他感到十分满意,他对比亚迪充满了信心。在比亚迪经销商大会上,巴菲特也一再强调,“我选择比亚迪,是明智的;你们选择比亚迪,也是明智的。”<br /><br /> 如果说巴菲特的表达还算比较含蓄的话,那么芒格的表达就十分热情了,生性挑剔、怀疑一切的芒格对于中国、对于比亚迪、对于王传福有着如此纯粹、强烈的好感,让很多人感到困惑惊讶。当比亚迪员工问到芒格,他觉得比亚迪有什么欠缺的地方,他有什么建议时,芒格的回答几乎让中国人感动得掉泪:“我们是来向你们学习的,不是来说教传经的,你们的事业十分伟大,你们的技术领先世界,你们的抱负无人能比,你们的人民勤劳智慧,精诚合作,所以成功是必然的,就像比亚迪一样!”<br /><br /> 芒格还将王传福比作爱迪生与韦尔奇的结合体,可能是他这辈子对一个人的最高评价了,当然除了他的老弟巴菲特。芒格认为王传福有着崇高的理想、惊人的毅力以及团结鼓舞人们的魅力。王传福慷慨大方地将股权分给高管和员工,不安插一个亲戚进公司,这是很难能可贵的。王传福能带领大家创新开拓,日以继夜地搞科研开发,不断学习,不断试验,不断进取。芒格对于那些投机取巧、豪赌爆发的有钱人十分不屑,强调,有钱人不一定是高尚的人,生财要有道。当被问到他认为什么样的人算高尚的有钱人呢,他毫不犹豫地回答说,像王传福这样的人才是生财有道的高尚的有钱人。他的事业造福人类,泽被子孙,值得大家学习。<br /><br /> <br /><br /> 这几天,巴菲特和芒格不是穿着打着比亚迪标识的T恤衫,就是打着比亚迪的领带,口口声声比亚迪、王传福,真是成了比亚迪的代言人。当记者问芒格,这种情况常见吗?芒格说,支持所投资的公司当然是正常的,不过像我们这样支持比亚迪当然是不同寻常的,我们一般也不会这样力挺我们旗下投资的公司,上次这样做好像是投See’s糖果的时候,那是好多年以前的事了。像比亚迪这样年轻的公司需要我们的支持以便更快地获得公信力,这样才能发展得更好。我不会说我自己都不相信的话,I don’t say things I don’t believe.我不说言不由衷的话;所以,我对比亚迪的褒奖句句是真心话,你们尽可照单全收。”<br /><br /> <br /><br /> 当被问到是否会考虑投资于中国其他企业时,巴菲特客气地回答,对于世界各地的投资机会我们都是很关注的,只要符合我们的投资标准,我们都会考虑投资。芒格的回答更明确:“We got so charmed with BYD. 比亚迪让我们太心驰神往了,其他公司和比亚迪比起来总是相形见绌。”<br /><br /> <br /><br /> 总之,巴芒给我们传达的信息是:王传福是高尚的,比亚迪是强大的。<br /><br /> <br /><br />中国神话,高山仰止<br /><br /> 巴菲特十五年前第一次访华,为期十七天,主要是为了追随比尔盖茨夫妇。Buffett’s motivation for this round-the-world jaunt was the Gates. 巴菲特通过朋友K结识盖茨后就一直很喜欢这个商界天才,甚至为了参加盖茨的婚礼而放芒格的鸽子,没有去参加芒格七十大寿典礼,芒格对巴菲特当然很宽厚,反正巴菲特做什么他都会原谅。有人说盖茨成了巴菲特的第三个儿子;也有人说,讲到对盖茨的爱,巴菲特仅次于盖茨的太太Melinda。when it came to being in love with Gates, Buffett ran a close second to Melinda. 总之,巴菲特第一次来中国,不是为了中国,而是为了盖茨。多年之后,留在巴菲特记忆最深处的不是长城、紫禁城、三峡、钓鱼台宴请时盖茨夫妇特地安排为他做的一道又一道汉堡包和炸薯条,而是神农溪的纤夫。 “There could have been another Bill Gates among those men pulling our boat. They were born here, and they were destined to spend their lives tugging those boats the way they did ours. They didn’t have a chance. It was pure luck that we had a shot at the brass ring.” 在神农溪的船上时他就说:“那些拉船的纤夫中可能就有另一个比尔盖茨,但是他出生在这儿,注定一辈子这样辛苦地拉船,没有出人头地的机会。我们有机会获得这样的财富成功,钟鸣鼎食,纯粹是运气。” 这十五年来,富有恻隐之心的巴菲特每每会想起神农溪的纤夫,感慨命运的安排,人生的际遇。<br /><br /> <br /><br /> 9月29日下午,对话节目邀请了当年纤夫船长来到现场和巴菲特见面。老纤夫出场前,先让巴菲特看了一段节目组寻访老纤夫的录像,老纤夫已经不在神农溪拉船了,全家搬到了县城,住在一幢七层楼的房子里,过着幸福的生活。老纤夫上场,巴菲特和他热烈拥抱,淳朴的老纤夫拍着巴菲特的西装表袋说:“原来你这么有钱啊!” 老纤夫多半不知道在这个有史以来最杰出的投资家、人称股神心目中自己代表的是悲悯、宿命,这十几年他其实过得并不比任何其他人更痛苦,也许只有更开心,毕竟生活水平大大改善了。对于巴菲特来说,这一见面了却了不是心愿的心愿,修复了不是心理创伤的心理创伤,是件释怀快意的乐事。老纤夫的际遇折射了中国经济和社会的大发展,巴菲特深感触动。他在讲到中国发展时,从不吝啬渲染的词汇:“很难想象现在的中国和15年前的中国是同一个中国,城市面貌焕然一新,各项事业蓬勃发展。中央、省、市等各级政府为经济的发展营造了良好的环境,培养了许多像比亚迪这样的优秀企业和像王传福先生这样的优秀企业家,在很短的时间里取得了其他国家一百年也未必能够取得的进步,令人叹为观止!我很荣幸见证了中国过去15年的大发展,我希望我还能见证中国接下来10年20年甚至更长时间的大发展,见证中国成为世界一大强国! ” 当然他时刻不忘为比亚迪争取支持:“我们应该支持像比亚迪这样的公司,因为它的发展不是简单的一家公司的发展,它的技术会给13亿中国人民带来福祉,给 65亿地球人带来福祉,让我们祝愿这项造福人类、泽被子孙的伟大事业获得辉煌成功!<br /><br /> <br /><br /> 总结此次中国之行时,他这样说到:“这几天的中国之行太神奇精彩了(amazing),比亚迪的发展、各大城市的发展、整个中国的发展都给我们留下了十分深刻的印象,我们回去后会告诉我们的股东、告诉美国民众这里中国人民取得的巨大进步。我十五年前首次访华,三年前又去过大连,这次回来考察比亚迪,看到比亚的的大发展很是高兴激动,希望在不久的将来,我们还会来到中国,见证比亚迪年产电动客车年产50万辆的光辉一刻。 ”<br /><br /> <br /><br /> 最后一天在长沙答记者问时,巴菲特说:“这次中国之行所见所闻远远超过了我的预期!我当然也在电视等媒体上经常看到有关中国的报导,听到很多数字,比如 GDP的增长率等等,但是眼见为实,亲眼看到后的震撼力还是十分强烈。中国经济充满活力,孕育了大量的优秀企业和企业家。自我第一次来访至今15年间,中国经济取得了突飞猛进的发展,我坚信这个趋势会继续下去,中国经济将来会获得更大的发展。我向中国、中国人民致敬!”<br /><br /> <br /><br /> 如果说盖茨促成了巴菲特的首次中国行,给了巴菲特了解中国的机会,那么真正让巴菲特对中国产生好感的是芒格。被誉为本世纪最伟大的思想者的芒格很崇尚中国文化;对于很多西方人不能理解接受的一些中国现象,芒格很宽容,认为中国的制度系统“由于历史沿革的原因,有些奇怪,但是行之有效”。 2008年Berkshire Hathway股东年会上,有股民对于中国政府处理西藏问题的方式表示抗议,要求Berkshire Hathway出售可口可乐的股票,因为可口可乐是北京奥运会的赞助商。不愿得罪人、希望所有人都喜欢他的巴菲特碰到这种不涉及利害的冲突争议,一般打马虎眼,息事宁人。芒格则不然,他从不因为怕得罪人而放弃直抒胸臆,而且崇尚理性的他最讨厌用意识形态代替大脑思考。芒格缓缓说到:“西藏问题的是非曲直且不去说,我只问你,中国的民主制度是进步了还是退步了?既然是进步了,我们为什么要打击她呢?你难道是希望它退步吗?再说了,民主是个过程。 1929年美国举办奥运会时美国妇女还都没有选举权呢。 按照你的说法,我们当年就因该阻止美国举办奥运会。” 一番话,说得那股民哑口无言,一天会议从此再无人提中国民主问题。<br /><br /> <br /><br /> 芒格对中国的好感不知来源何处,可能是因为他很推崇孔子的思想的原因,他和孔子有着很强的认同感。他在北京接受采访解释自己为什么在中国比在美国更受欢迎的原因时说:“我觉得主要的原因可能是我的价值观比较接近孔子,重思考、重原则、重家庭、重教育,强调活到老学到老,学习是一种道德义务,life- long learning as a moral duty,主张用智慧改善自身、家人、同胞乃至整个人类的生存条件,use your wisdom to make your family and the world better, 务实,不偏执,我没有传统意义上的宗教信仰。”<br /><br /> <br /><br />慈善公益,见仁见智<br /><br /> 在这次中国之行中,巴菲特表示,把一个企业经营好,特别是像比亚迪这样的企业,为人类造福,本身就是慈善;盖茨认为,在此基础之上,可以以个人或公司的名义进行一些帮助弱势群体、赈灾救难等具体的慈善活动;芒格提到,欧洲包括英国在内,在慈善方面都做得不大,亚洲也不大。他说,“对于Warren和Bill的雄心壮志(笔者:大概就是指劝捐的雄心壮志)我表示同情和理解,不过我不会指示中国人该怎么做慈善,这是他们自己的事情,我可以选择捐我自己的钱,别人的钱捐不捐是他们的事。”<br /><br /> <br /><br /> 尽管巴菲特三天半行程中只有一个晚上参加盖茨基金的活动,但是那晚的慈善晚宴却吸引了全国乃至全球的目光,“劝捐鸿门宴”引发了国内外对于中国慈善业的激烈讨论。<br /><br /> <br /><br /> 有数据显示,美国慈善捐赠资金是GDP的1.7%,欧洲是0.7%,而中国是不到0.01%。为什么中国没有所谓捐赠文化?除了经济发展阶段不同、慈善机构治理透明程度不同等原因外,可能还有一个是价值观、人生观、世界观的原因。<br /><br /> <br /><br /> 巴菲特能捐出99%的财富,这和他价值观中的“娘胎彩票”理论分不开。 他说:“I’ve had it so good in this world, you know. The odds were fifty-to-one against me being born in the United States in 1930. I won the lottery the day emerged from the womb by being in the United States instead of in some other country where my chances would have been way different.”“我很幸运,1930年出生于美国,这个出生时空组合的概率是50比1,我从娘胎里出来的那一刻就好比中了50比1的彩票。如果不是出生在美国,而是其他国家,我的境遇就很不同了。” 他认为,一个社会应该鼓励强者自由翱翔,追求成功,但是成功了一定要帮助由于种种原因而没有成功的人,要回馈社会。 对于那些自以为“I did it all myself”全靠自己、和社会没关系、不愿意回馈社会的所谓成功人士,巴菲特很是反感,说:“你让他去选择,一个是生在孟加拉国,不用付税,另一个是生在美国,看他愿意付出他收入的百分之几以获得生在美国的娘胎彩票!” 巴菲特和盖茨是最早最激烈反对布什总统逐渐撤销遗产税计划的富人。巴菲特义愤填膺地说,我反对世袭相承的王朝,这好比在这一界奥运冠军的孩子中选拔下一界奥运的冠军,还有比这样的制度更背离民主精神的吗?一个少女单身妈妈领些社会福利金,你们富人都要嚷嚷说这样培养了穷人的依赖性,不公平;那你们给子孙后代留了这么多饭票,他们几代人可以完全不劳而获,就因为他们投对了娘胎,这样就公平了吗?!巴菲特对于自己的三个孩子从不纵容惯养,三个孩子上的都是公立学校,衣食住行都很普通,他们并不知道家里很有钱,过着和其他孩子一样的生活。<br /><br /> <br /><br /> 在巴菲特的思想里,有这么相互关联的两点,一是出生的时空是随机的概率事件,出生时空有利,好比中彩;二是致富发财、获得成功不完全是个人的努力,离不开社会这个大环境。所以中彩的富人捐钱做慈善,帮助没有中彩的其他人,是天经地义的。巴菲特不觉得自己有多了不起,他曾经在多个场合讲过以下相似的话:我是很幸运的,如果我出生在非洲,整天要和老虎狮子赛跑的话,我恐怕早就成了老虎的早餐了,因为实在跑不过别人;我很幸运,在我很小的时候我就知道自己喜欢做的是什么事情,我天生的性格使得我很适合做这个事情,并且在后天又获得了将这个事情做好的知识、技能,这个事情做好后又给我带来了巨大的财富和很高的社会地位。我太幸运了!一个士兵保家卫国,功勋卓著,得到的回报是国家颁发的一枚奖章;一个教师,教书育人,桃李天下,得到的是学生的感谢信;像我这样一个投资者,只是做了我该做的事情,得到的竟然是不可想象的巨额财富。他在北京比亚迪成点亮西藏捐赠仪式活动现场说:“Bill and I are extremely lucky. Efforts rewarded, I just get paid very well. Bill和我是超级幸运的,我们当然也很努力,但是我们的回报超级高。其实我没有什么特别之处,很多人比我更聪明更努力,我只是得到的报酬很好而已。我们有幸获得这么多的财富,简直不可思议。 Extra wealth,但是一个人活这一世,吃穿用度,花不了这么多钱的,剩余的财富应该回馈社会,帮助那些没有我们那么幸运的人,他们可能出生在贫穷的地区,没有接受良好教育的机会,或疾病缠身,或遇天灾人祸,我们应该帮助他们,这是我们应尽的义务!”<br /><br /> <br /><br /> 有了这样的价值观、人生观,不捐是不可能的事。这和东方文化不一样,东方文化深受佛教影响,人们多多少少相信因果轮回。投胎投得好,不是随机中奖,是上辈子积的德;既然是我上辈子积的德,这辈子的荣华富贵当然我来享受,凭什么要我捐出来帮助别人?谁让他们上辈子没积那么多德?当然,按照因果关系,如果这辈子捐钱积德了,那么下辈子还会有荣华富贵。问题是,下辈子到底有没有谁也不知道,下辈子等下辈子再说吧。所以,按照这个逻辑,不捐是天经地义的。给定巴菲特的思想,捐是默认状态;给定因果轮回思想,不捐是默认状态。如果不捐是默认状态,那么再加上发展阶段、程序方式上的一些障碍,中国几乎没人响应巴比裸捐号召也就很正常了。<br /><br /> <br /><br /> 除了价值观方面的区别,还有一个区别是立国精神。美国的立国精神是自由、平等、民主,父传子、子传孙的封建意识让崇尚“美国之梦”的巴菲特深恶痛绝;但是他的深恶痛绝倒让大多数中国人不能理解,几千年的封建王朝统治使得封建意识根深蒂固地植入了现代中国人的思想中。有人开玩笑说,美国人是为下一分钟活着,印度人是为下一辈子活着,中国人是为下一代活着。打个不恰当的比方,好比财务年度,美国是一代一结帐,印度是三代一结帐,中国是两代一结帐。既然是为下一代活着,一旦富贵了,把饭票留给下一代以及下一代的下一代,不是很正常吗?别人也没什么好说的,投对娘胎就是最大的本事。所以巴菲特的义愤填膺让马云也一样义愤填膺,马云说一个不把财富留给自己孩子、不照顾自己孩子的人,你怎么能相信他会照顾社会呢?正是这样的思想,才会使得中国权贵资本主义大行天下,而天下还很太平。<br /><br /> <br /><br /> 睿智的芒格在北京活动现场最后补充的一句话或许提示了我们慈善的另一个侧面:“And you are not allowed to take it to grave. More fun to give it away yourself. 反正也带不进坟墓去,不如自己捐掉,这更有意思。”<br /><br /> <br /><br />中国经济:转型与泡沫<br /><br /> 有人问芒格:“中国以前靠劳动力密集型产业发展经济,现在这些行业利润越来越薄,难以为继,而资本密集、技术密集的行业尚未发展起来,而且如果发展资本密集型的行业,那么原来的劳动力到哪儿去找工作呢?您认为中国经济转型的出路在哪里?”芒格回答:“中国还有大量的劳动力没有就业机会,我不觉得劳动力密集型产业就不该发展了;而且,技术密集型、资本密集型行业中国不是已经在发展了吗?很多行业高精尖的技术都在中国啊,中国有很多技术水平领先世界的公司,比如比亚迪。”巴菲特补充:“在人类发展的过程中,一个行业的重要性是会发生变化的,这是规律。比如,1920年,美国1.5亿人中从事农业的人口高占 30%;现在美国3.1亿人口中只有2%的人从事农业。如果1920年的时候你和当时的美国人说,以后只有2%的人从事农业了,他们会很惊讶地问,那么剩下的人不就失业没事做了吗?今天我们知道,其实不是这样。农业在经济中的占比降低了,但是涌现了很多新兴产业,人们不怕没有工作做。比如,八十年代,盖茨他们开创的新行业就给成千上万人提供了就业机会。你们的经济在过去二三十年发展迅猛,我想将来二三十年还会继续发展下去;现在中国的很多工作二三十年前的人是完全想不到的,再过二三十年会有怎样的工作,现在的人们也是同样不可想象的。不用担心以后没有工作,要动态地思考这个问题,只要经济发展,只要你勤奋努力,就不怕没有事做。”<br /><br /> <br /><br /> 有记者问芒格:“您是否认为中国股市有严重的泡沫?” 芒格马上回答:“当然有严重的泡沫啰!中国人天性好赌,没有泡沫才怪呢!不过这也没有什么,哪个国家的股市没有过泡沫呢? Some Chinese are over-obsessed with gambling有的中国人沉溺于赌博,沉溺于急功近利赚快钱,把股票看成赌场的筹码,这太糟糕了!股票背后是有实实在在的企业的,不是赌场的筹码!我们应该做投资,投资于企业,股票只是一个载体,不能投机赌筹码。如果变成了一个职业赌徒,一生都耗在赌博上,就算赚了钱又如何?这是多么糟糕可怕的一生!terrible terrible life!美国已经犯过这种愚蠢的错误了,结果是整个资本市场变成了一个大赌场,欺诈猖獗,疯狂搏傻,泡沫越赌越大,破裂之后损失巨大,惨不忍睹。前车之鉴,后事之师呀,你们不要犯同样的错误了!”<br /><br /> <br /><br />投资理念,4M制胜<br /><br /> 巴菲特说他自己很幸运,很小的时候就知道自己喜欢做什么,并且拥有将这件事情做好的天份以及后天习得的技能。这件事情就是投资。巴菲特认为两件事情很重要,一是赚钱,二是长寿。估计很多人也都这么认为,但是很少有人能都做到。巴爷说,我要赚钱,有钱了我就有了自由,有了自由我就可以做我喜欢做的事情。巧妙的是,他喜欢做的事情还是赚钱,这就形成了一个良性循环。他的财富像雪球一样,从六岁时开始卖口香糖、可口可乐积攒的几分几毛的第一片雪片滚到顶峰时世界首富600亿美金,然后他又将其中的99%捐去做慈善,自己生活十分节俭,至今住着50年前花了31,500美金买的房子,在简陋的办公室办公,穿着很普通甚至可以说很土气的衣服,自己开车上下班,自己搬行李,吃着汉堡和樱桃可乐。我们中国任何一个有点钱的人比他的物质享受都要多不知多少倍,比如,洗头捏脚之类的服务巴菲特估计是没有享受过的。 但是他的生活质量很高,主要是精神思想上的享受。对巴菲特来说,赚钱可以算是一种数字游戏,是智力的较量。他从小喜欢数字,喜欢概率,喜欢收集,喜欢竞争,喜欢伸张正义。他小时候很喜欢跟父母去教堂,大人忙着唱圣歌,他忙着看圣歌作曲者的生卒年份,计算他们的寿命,结果发现这些作曲者并没有因为为上帝谱写赞美诗而比常人多活几年,很是失望。他会坐在街头记录每一辆路过的车的车牌号码,计算每一个数字出现的概率,乐此不疲,因为他相信哪天街角那家银行遭抢劫后,他的记录对警方破案会大有帮助。他小时候喜欢收集小石头、可乐瓶盖、邮票等东西。他把三颗小石头放在浴缸边上,给每一个小石头取好名字,他和姐姐、妹妹各认领一颗,他一摁秒表,三人同时把小石头推进浴缸的水里,看哪一颗小石头最先到达浴缸底部,花了几秒钟。他不厌其烦地天天拉着他姐姐妹妹玩这个游戏,希望小石头天天有进步。这些性格特征的组合十分难得,投资成功正是需要这样的组合。不过,他也完全有可能将这个组合用在其他方面。好在命运没有这样安排,不然我们就见不到有史以来最优秀的投资家了。这要感谢巴菲特的父亲,他在三个孩子十岁时都带他们去进行一趟东部之旅,巴菲特选择去的是华尔街。在证交所的餐厅里,他看到证交所的会员们用完餐后会招呼一个脖子上挂着一个托盘的人,托盘里放着各种烟叶,那人就根据客人挑的烟叶现场卷制雪茄烟。巴菲特看呆了,他意识到这些证交所的人肯定赚了很多很多钱才能在满目苍痍的经济中还过着这样讲究的生活,雪茄都是定制的,这样享受。巴菲特看到卖雪茄烟的人这一天,也是他人生目标明确形成的一天,他暗暗下定决定,一定要赚钱,一定要赚钱!当然,他赚钱不是为了抽雪茄,或者其他的享受,而是为了获得自由,为了不受制于任何人,为自己工作,为自己生活,做自己想做的事情。从那一天开始,他把喜欢数字概率,喜欢收集竞争,喜欢公平正义等性格特征都用到了投资中,慢慢形成了自己独特的一套投资理念和方法,在接下来的70年里创造了巨额财富。<br /><br /> <br /><br /> 对巴菲特投资理念的形成起了最早最大影响的莫过于本·格莱姆,他是巴菲特在哥伦比亚大学读书时的老师,是巴菲特心目中的英雄。格莱姆的投资公司在20年间平均每年跑赢市场2.5个百分点,这在巴菲特出现之前是很十分了不起的成绩。格莱姆取得这样骄人成绩的主要原因是他分析数字的能力非常了得。在他之前,股票的估值没有什么道理可讲,基本上全是臆想猜测。格莱姆建立了第一套系统全面评估股票价值的方法。不过他只分析公开现有的数据,一般是公司的财务报表,而不愿意去打探非公开现有的信息,他拒绝走访公司,了解管理层,他认为这是作弊,因为他把投资看成纯粹的智力游戏。<br /><br /> <br /><br /> 巴菲特师从格莱姆,学到了三大道理:一、股票是拥有一个企业的一小部分的凭证,它的价值不是虚无缥缈的,它有内在价值,它的内在价值取决于它所代表的企业的价值;二、投资决策的依据是估算分析,估算分析难免会有误差,所以,为了保证投资结果不被误差寝室殆尽,需要设立一个较大的价格安全边际;三、“市场先生”是你的仆人,不是你的主人,格莱姆将市场比拟为一个人,这位先生喜怒无常,情绪阴晴不定,又恐惧又贪婪,不要让他影响你对价值的判断,他的喜怒好恶不能代表任何问题,他只是你的仆人,给你提供买卖股票的工具场所而已。<br /><br /> <br /><br /> 这三点让巴菲特受益匪浅,但是一定程度上也束缚了他的投资。因为格莱姆超级冷静的理性导致了沉闷的悲观主义,表现在投资上,就是所谓“烟屁股投资法”。他会很辛苦地寻找市值大大低于资产账面价值的股票,甚至有一段时间只找市值低于流动资金(流动资产减掉流动负债)的股票,这些死了比活着更值钱的企业(清盘资产变卖所得资金高于股票价格)被称为香烟头,意思是它们像被人抽得差不多的扔掉的香烟头,格莱姆会买进大量不同的香烟头,分散风险,总有一些香烟头可以抽到最后一口烟。这样的投资尽管很辛苦,又平淡,回报也不是非常高,但是它的风险很低,相对于承受的风险来说回报是很高的。<br /><br /> <br /><br /> 巴菲特早年的投资就是这样捡香烟头,接触菲舍的理论和认识芒格之后才有所改变。芒格认为格莱姆的悲观理性主义使得他错误地认为将来充满着风险而不是同样充满着机会,这种不对称的认识阻碍了投资。和格莱姆正相反,芒格喜欢优秀的企业great businesses,管理层能力强,品牌强大,这些别的企业模仿起来都需要很长一段时间;可以自我造血,不需要隔一段时间就要投入资本以维持营运。芒格一旦看准了投资机会,还会去借所有能够借到的钱去投资,充分运用融资杠杆,这在巴菲特也是匪夷所思的。芒格常说,投资要稳准狠,你要认为不好,那你就索性不投;你要认为真的值得投,那为什么不多投一点?任何中间状态在逻辑上都不成立的。 1963-64年间,巴菲特和芒格处于“热恋期”,每天通话不少于三个小时,芒格将巴菲特视为投资之王,但同时也认为自己也很聪明,能在认为自己正确的时候坚持己见。他的名言是:“你会同意我的观点的,Warren,因为我是正确的,而你是聪明的。” 在芒格的影响下,巴菲特慢慢开始将格莱姆的悲观谨慎和芒格的乐观从容结合起来了,其实巴菲特对于美国经济和企业的长期发展是很有信心的,芒格的投资理念也暗合了他的思想,他开始不再捡烟屁股,不再在一堆金子里找金针,最终形成了现在倍受世人推崇的“价值投资法”。为了方便记忆,笔者用4M来解释对“价值投资法”的理解。<br /><br /> <br /><br /> 第一个M可以理解为市场,或者行业,也就是这个企业所在的行业是一个能够赚钱的行业。有些行业就是不能赚钱,这可以用波特的五力分析模型来分析,即同业竞争、进入壁垒、替代品、供应商的议价能力、买方的议价能力五个方面,在现代经济中,可能还要增加一个互补品这一力量。五力分析模型的精髓是全面性,每一个单独的力量都只是必要非充分条件,缺了任何一个力量,这个行业的获利能力就会受影响。比如,飞机制造业,同业竞争者少、进入壁垒高、替代品少、供应商的议价能力弱,这对这个行业都很有利,但是最后一个力量,买方议价能力很强,这个行业盈利能力就不强。所以,一个行业一个企业的盈利能力高低要综合分析,不是说经济发展了所有行业企业的获利能力都会提高,不是说新兴技术的行业企业肯定能赚钱。 1999年7月,在因特网泡沫鼎盛的时候,巴菲特参加太阳谷的峰会并发言,他旁征博引历史数据委婉地说明他的判断:这是个泡沫!1964年12月31号到 1981年12月31号,这17年间,美国经济总量翻了5倍,财富500强企业总销售收入翻了不止5倍,道琼斯指数在这两个时点的数字分别是874.12 和875.00。他又举了汽车行业的例子,美国曾经有2000家汽车公司,最后幸存下来的只有3家,就这3家,曾经一度市值都低于账面价值。汽车是二十世纪上半叶最伟大的发明之一,给人类带来了巨大的便利,对美国经济具有重大贡献,对于投资者,它的影响也很大,但是是负面的。他还提到了二十世纪上半叶另一个伟大发明,飞机,几年前,对于航空业的股票投资累计回报是为零(笔者:我们知道,现在是负数)。他还开玩笑说,如果当年他在莱特兄弟试飞第一架飞机的现场的话,他希望自己有勇气把那架飞机射下来,“这是我向未来投资者应尽的义务”。他后来还曾说,似乎所有带翅膀的东西都投不得。巴菲特几乎从不投高科技企业,这可能是个原因。诚然,科技造福人类,但是人类不是投资者。<br /><br /> <br /><br /> 第二个M是管理层,管理层要能干可靠,人是至关重要的,同样的事情,不同的人去做结果会很不同。有的人适合做管理,做得好;有的人不适合做管理,做不好,这是客观规律。芒格对于管理人才的问题是这么看的,“我们不培养他们,我们寻找他们。”<br /><br /> <br /><br /> 第三个M是护城河(moat),即可持续的竞争优势,比如需求方来讲的品牌效应、供应方来讲的规模经济效应等。<br /><br /> <br /><br /> 第四个M是安全边际,即购入的价格应该远远低于价值,这样就算分析估算有误差,投资回报也不会荡然无存。<br /><br /> <br /><br /> 每一个单独的M都只是必要非充分条件,缺了任何一个M,这个企业就不会成功。所以说,成功的企业个个相似,不成功的企业各有各的不成功。如果投资符合这四大条件,那么就是一个理想的投资,它不断地带来很高的投资回报,我们再把它产生的资金配置到回报率同样高的地方去,这就形成了一台滚雪球的机器 (compounding machine),财源滚滚来了。 Berkshire Hathway当年是美国服装衬里最大的生产商,但是这个行业本身不赚钱,最后巴菲特不得不将它转型成他做投资的平台。可口可乐当年的首席执行官 Ivester食品安全问题处理不当、过度压榨瓶装商,没有能力,最后巴菲特不得不请他走人,至于把老婆买浴帘的1500美金发票拿到公司报销的首席执行官那当然更不能用。巴菲特旗下七十多家公司几乎都有由品牌或者规模经济效应等形成的护城河,比如喜诗糖果属于前者,GEICO属于后者。最后一个M,安全边际,这是很容易理解的,前面三个M讲的都是分子,投资回报,这第四个M讲的是分母,投资本钱,企业再好,如果股价已经很高了,再买就危险了,投资回报就不高了。<br /><br /> <br /><br /> 巴菲特为什么会投资比亚迪呢?众所周知,是因为芒格的强烈推荐。都想把莱特兄弟试飞的第一架飞机射下来的巴菲特没有想炸掉比亚迪出品的世界第一辆纯电动车反而投资占了10%的股份,这的确让很多巴迷百思不得其解。其实,投资比亚迪并不违背巴菲特的4M投资理念,巴芒从来没有说绝对不投高科技,只是说不投不能理解、看不懂的技术,巴菲特此次访比答记者问时也一再强调“我们只投我或者芒格看得懂的企业”,尽管巴爷对电动车、新能源可能不太懂,但是博览群书、对科技一向很感兴趣的芒格对这个领域应该是比较了解的,此次86岁高龄随行访比,足见芒格对自己判断的信心。另外三个M当然更符合了,对于王传福挂帅的比亚迪管理层巴芒是越看越欢喜,在各个场合都给予了最高评价。比亚迪的护城河也很深,铁电池技术独占鳌头,无人能敌;品牌也有一定优势。安全边际更是没有问题,巴菲特的比亚迪投资现在已经翻了7倍。当然,巴菲特力挺比亚迪,也有可能是属于芒格说的“结婚前睁大两只眼,结婚后睁一只眼闭一只眼”的情况,反正在巴菲特近2000亿的投资组合中比亚迪是沧海一粟。但是这是我们中国人唯一的一粟,还是让我们祝福比亚迪一路走好,不辜负巴芒,不辜负国人。<br /><br /> <br /><br />三人行,必有我师<br /><br /> 巴菲特、芒格、盖茨此次锵锵三人行,估计是历史上最后一次了。三人的关系很是有趣,巴菲特和芒格是半个世纪故交,巴菲特和盖茨是忘年交,两人相差25岁。芒格和盖茨都是巴菲特的朋友,不过相互之间没有太多的交往,两人都是属于绝顶聪明也意识到自己绝顶聪明很难和不聪明的人打交道很难忍受不聪明人的不聪明的那种聪明人。巴菲特相对比较能和别人相处,尽管他也会不耐烦,但是他会努力掩饰。由于他母亲的关系,他从小缺乏安全感和自信心,所以一辈子都很努力地去讨好别人,希望大家都喜欢他,他还专门去听卡耐基的课,学习和别人团结友爱的方法。他很会激励旗下公司的管理层,用他自己的话说,会“卡耐基”他们。对于身边的工作人员也是一样,他会夸奖翻译说:“你真是翻得太好了!” 怕翻译翻饿了,递一盒打开的巧克力过去说:“你吃块巧克力吧。” 吃到巧克力和边上看到的人都十分感动。<br /><br /> <br /><br /> 比亚迪的投资是芒格主导的,所以这次访比,可以说是盖茨陪巴菲特陪芒格,这样三人就一串儿都来了,往台上一坐,整整1000亿美金坐在那儿,蔚为壮观。芒格对于中国和比亚迪的推崇完全可以理解,巴菲特看在老哥的面上对于中国和比亚迪的推崇也可以理解,倒是盖茨很不容易,一路从深圳陪到北京,陪到长沙,而且发言时十分谦虚,中国的发展举世瞩目,令人叹为观止,比亚迪创新为本,造福人类,十分了不起,云云。长沙站有记者问盖茨,盖茨先生,您是世界上最优秀的企业家,您对比亚迪有什么建议吗?盖茨回答说:“比亚迪有着最优秀的领导人,做得非常好,不需要我给他们提什么建议吧,他们的创新能力和快速增长倒是值得我们好好学习。如果说微软有什么经验的话,那就是要有长远的目光战略、要注重人才的培养发展、要重视客户基础的打造,但是这几点我觉得比亚迪都已经意识到了,也都做到了,所以芒格先生才会这样推崇比亚迪,告诉Warren一定要投资。我很荣幸这次能够一起来拜访比亚迪,见证比亚迪的成功发展。”<br /><br /> <br /><br /> 现年55岁的盖茨不再是哈佛辍学创业的毛头小伙了,两鬓斑白,满脸斑纹,但是举手投足还是和往年一样,一种慵懒倦怠百无聊懒的样子,太聪明的人似乎多多少少都这样,不过说起话来就完全不同,声音清晰犀利,很有穿透力,逻辑缜密,用词精当。主持人寒暄中问到盖茨,“听说您是twitter微博的粉丝,是这样吗?”在待人接物、世故人情方面比较冷淡“微薄”的盖茨,说到技术就热情了,说:“微博是个好东西,这几天在中国出访,我随时发微博给我在美国的家人朋友同事,告诉他们我的行程,所见所闻,这样的沟通实时性和现场感很强,太好了!”<br /><br /> <br /><br /> 在和比亚迪员工对话时,他还详细谈到了未来技术发展的四大趋势。一是输入方式的革新,目前为止,信息输入系统主要靠键盘,以后手写、语音等技术将降低键盘作为信息输入方式的重要性,这是最最大的趋势;二是收看界面,以后人们通过视觉获得信息的界面会统一起来,书、电视、因特网等等都会统一到一个界面上;三是教育的数字化,将来顶级学校的顶级教授的授课世界各地的学生都可以接受到,你可以按照自己的特别度身定制教育的内容,这将大大提高教育的效果和效率;四是机器人的普及将会成为现实,我想比亚迪以后就会开发出机器人,软件和硬件高度结合,这方面微软也许可以和比亚迪合作。<br /><br /> <br /><br /> 巴菲特带着他这两位同样是几百年也出不了一个的朋友造访中国,造访比亚迪,给比亚迪带来了无限的动力,给巴迷们带来了又一次思想的盛宴,给中国人带来了骄傲和自豪!祝巴芒健康长寿,祝巴比心想事成!<br />兄弟情深,相敬如宾<br /><br /> 巴菲特和芒格半个多世纪的友谊一直是投资界的美谈,此次老哥俩携手来华访问,让我们近距离感受到了巴芒相敬如宾的兄弟深情。<br /><br /> 比芒格小六岁的巴菲特处处照顾着芒哥,芒格视力听力不好,但说话滔滔不绝,每次坐在主席台上发言往往忘了翻译的存在,巴菲特会拉拉他的衣袖,然后指着翻译站的方向,提醒芒哥注意停顿给翻译时间翻译,几次之后,芒格形成了条件反射,只要巴爷一碰他,他就马上闭嘴,很听话的样子。而巴菲特对于翻译特别重视,开场白就说:“一般我在中国会用中文发言,不过考虑到翻译小姐的就业问题,我还是改用中文吧。”全场大笑。<br /><br /> 听众提给巴菲特的问题,巴菲特总是找各种理由转给自称爱说教的芒格,给芒格表演的机会,特别是第一个问题和最后一个问题。和比亚迪员工对话时,第一个问题问巴爷对于新能源发展前景的看法,巴爷回答说,“这个问题还是让Charlie回答吧,尽管他只比我大六岁,但是他的智慧比我高深很多,特别是讲到新能源,我就更不是他的对手了。” 最后一个问题是关于再生能源,盖茨回答后,芒格补充了几句,提问者再问巴菲特的观点,巴爷说,“一般一个问题Charlie回答后就盖棺定论了,我没有补充了。” 说完,三人在台上相视而笑。在对话节目中,巴菲特甚至说芒格是我的秘密恋人,对于芒哥的崇敬珍惜溢于言表。精神上如此契合的朋友确实应该比珍惜恋人更珍惜。<br /><br /> 芒格对于巴菲特也是十分尊重,有人问芒格,“您和巴菲特半个世纪的友谊是不是巴菲特成功的重要因素,尽管巴菲特经常抛头露面,而您十分低调,还是有人认为您比巴菲特更重要,对此您怎么看?” 芒格正言道:“完全不是这样!Warren才是最重要的,他比我重要得多,他是一把手,我是二把手,我只能说我在他的事业发展中起到了一定的作用而已。他在幕前我在幕后,这不是有意的安排,是自然而然形成的局面,我觉得这样很好;我没有他那么显赫重要,对此我没有一点点遗憾,我其实比较喜欢这样在幕后。 Warren能力强、人品好,德才兼备,又是个很有趣的人,我很幸运有这样的朋友。在中国关注我的人比在美国多,我觉得主要的原因可能是我的价值观比较接近孔夫子,重原则、重家庭、重教育,强调活到老学到老,学习是一种道德义务,life-long learning as a moral duty,主张用智慧改善人类生存条件,<span style="font-weight:bold;">use your wisdom to make your family and the world better</span>, 务实,不偏执,我没有传统意义上的宗教信仰。但是如果没有巴菲特,我不会得到这么多的关注。” 有时记者会问巴菲特暗藏机关的问题,芒格担心巴菲特落入陷阱,会挺身出来掩护。在长沙站,国外媒体Bloomberg问:“巴菲特先生,您对于人民币汇率问题怎么看?这几天我跟着你们从深圳到北京到长沙,所见所闻都是很积极向上的,中美民间往来还是很友好互惠的。但是美国国会日前通过了一个强迫人民币升值的法案,您是否认为国会通过这样的法案是脱离实际,不识时务?” 芒格代巴菲特回答:“我们只能代表公司说话,我们没有代表政府发言的权利和兴趣,汇率问题是中美两国政府的事,我们不便置喙。我们希望美国政府能够妥善处理好这个问题。” 有时他也会打趣巴菲特,比如,主持人问完巴菲特一个问题,再问芒格怎么看,芒格就说:“我完全同意巴菲特主席的意见(巴菲特是伯克希尔哈斯威的董事局主席,芒格是副主席)。”装出一副跟班小弟的样子。和比亚迪员工对话时,有人问巴菲特,中国有很多优秀的年轻人都以您为榜样,希望能成为“中国的巴菲特”,您觉得他们有机会成为您吗?巴菲特立马把这个问题转给芒格,芒格说:“这个问题得你自己回答了,他们是问能不能成为中国的巴菲特,而不是中国的芒格,我不能代劳。”<br /><br /> 半个多世纪的情谊,创造了500多亿的财富,激励了成千上百万年轻人,一个86岁的老哥,一个80岁的小弟,兄弟情深,令人感动!<br /><br />王传福高,比亚迪强<br /><br /> 此次巴菲特携芒格、盖茨来访,目的何在,众说纷纭。减持说是其中的一个。有人怀疑巴菲特此次拜访比亚迪就像当年拜访中石油一样,是吻别,最后的亲密。众所周知,巴菲特的性格是属于十分不愿意得罪人的那种,他很害怕被人讨厌,一辈子都在很努力地获得大家的好感,所以减持比亚迪之前先来抚慰一下也不是没有可能。但是巴芒在各种场合的言行都彻底粉碎了减持说。 <br /><br /> 在和比亚迪员工对话时,到下半场,终于有人提出了一个萦绕大家心头的尖锐问题,“请问巴菲特先生,您认为比亚迪的股价可以涨到多高?您准备持有多久?” 巴爷不慌不忙地回答:“<span style="font-weight:bold;">我从不预测股价,也不看短期的股价波动,我不在乎我投资的公司下一个星期、下一个月、下一个季度利润好不好、股价高不高,我不看短期,只看长期。我投的是这个企业,而不是股票,这是两个概念。我们寻找投资机会时,要看一个企业的市场潜力,比如比亚迪,不管是它所从事的汽车行业还是新能源行业,以后都会发生巨大变化,市场需求巨大,有很多需求尚未得到满足;再看这个企业的竞争优势,比亚迪在这些市场有着显著的竞争优势,技术创新能力很强,你不需要很聪明就可以明白比亚迪是个优秀的公司,它过往的业绩摆在那儿;再看这个企业的领导者,王传福先生十分优秀,年富力强,有的是干劲和激情,他的目标是到2025年成为世界第一大汽车生产商,我觉得这个目标很可能提前几年就可实现了。总之,比亚迪具备一个成功企业的所有要素,只要能够保持前十年的发展势头,不成功是小概率事件。</span>”<br /><br /> 有的记者比较直接,“您会减持比亚迪的股票吗?”巴菲特直摇头:“当然不会! 我估计在我葬礼上,大家还会说,他还拿着比亚迪的股票呢。” 芒格更是字字铿锵:“到死也不会!” 记者又问了:“既然你们这么看好比亚迪,是否会考虑增持?” 芒格回答:“增持不是我们能说了算了,我们得获得管理层的批准许可,比亚迪并不需要资金以获得更大的成功。”<br /><br /> 巴菲特还多次讲到他当时决定投资比亚迪的故事:“我和Charlie相处51年,他一共给过我三个推荐投资的电话,前面两次也都很不错,第三次就是建议投资比亚迪,我一开始没有马上采取行动,他就打电话来说,如果你不投王传福,就错过第二个亨利福特了,我不为所动;他又打电话来,说,你不投就错过第二个爱迪生了,我还是不为所动;第三次他打电话来,说,你再不投就错过第二个比尔盖茨啦,我一听立马就投了。”说完俏皮地看一眼旁边的比尔盖茨,在全场欢笑中,盖茨也露出了稍带羞涩的笑容。<br /><br /> 有人追问巴菲特:“您和盖茨先生是好朋友,现在和王传福先生也是好朋友,同样是好朋友,为什么王先生的企业您投了,盖茨先生的企业您就没投呢?” 盖茨和芒格都笑眯眯地侧头看着巴菲特,看他怎么回答。这个难不倒巴菲特,只见他呵呵呵笑了几声,开始快速给出他万变不离其中的回答:“这和两个公司的相对规模有关。做投资,说到底,就是现在付一笔钱,放到一个你认为很有潜力的企业去,希望这个企业随着时间的推移能够释放实现它的潜力,将来给你带来可观的回报。 Charlie跟我解释了比亚迪的情况后,<span style="font-weight:bold;">我觉得这个企业潜力巨大,而且有实现潜力、创造价值的能力,值得投资。如果当时你有钱,我也会建议你投比亚迪,而不是微软;别说是微软,我都不建议你投我们的公司Berkshire Hathway。</span>” 这样的自嘲抹去了可能会给盖茨带来的尴尬不悦,巴菲特不愧是卡耐基的信徒。<br /><br /> 巴菲特2008年9月投资比亚迪,这是第一次实地考察,也是第三次来华访问。他说,他是抱着很高的期望来考察的,他对于这次考察所见所闻十分满意,比亚迪的技术、产品、管理团队、员工队伍、和政府的关系等各方面让他感到十分满意,他对比亚迪充满了信心。在比亚迪经销商大会上,巴菲特也一再强调,“我选择比亚迪,是明智的;你们选择比亚迪,也是明智的。”<br /><br /> 如果说巴菲特的表达还算比较含蓄的话,那么芒格的表达就十分热情了,生性挑剔、怀疑一切的芒格对于中国、对于比亚迪、对于王传福有着如此纯粹、强烈的好感,让很多人感到困惑惊讶。当比亚迪员工问到芒格,他觉得比亚迪有什么欠缺的地方,他有什么建议时,芒格的回答几乎让中国人感动得掉泪:“我们是来向你们学习的,不是来说教传经的,你们的事业十分伟大,你们的技术领先世界,你们的抱负无人能比,你们的人民勤劳智慧,精诚合作,所以成功是必然的,就像比亚迪一样!”<br /><br /> <br /><br /> 芒格还将王传福比作爱迪生与韦尔奇的结合体,可能是他这辈子对一个人的最高评价了,当然除了他的老弟巴菲特。芒格认为王传福有着崇高的理想、惊人的毅力以及团结鼓舞人们的魅力。王传福慷慨大方地将股权分给高管和员工,不安插一个亲戚进公司,这是很难能可贵的。王传福能带领大家创新开拓,日以继夜地搞科研开发,不断学习,不断试验,不断进取。芒格对于那些投机取巧、豪赌爆发的有钱人十分不屑,强调,有钱人不一定是高尚的人,生财要有道。当被问到他认为什么样的人算高尚的有钱人呢,他毫不犹豫地回答说,像王传福这样的人才是生财有道的高尚的有钱人。他的事业造福人类,泽被子孙,值得大家学习。<br /><br /> <br /><br /> 这几天,巴菲特和芒格不是穿着打着比亚迪标识的T恤衫,就是打着比亚迪的领带,口口声声比亚迪、王传福,真是成了比亚迪的代言人。当记者问芒格,这种情况常见吗?芒格说,支持所投资的公司当然是正常的,不过像我们这样支持比亚迪当然是不同寻常的,我们一般也不会这样力挺我们旗下投资的公司,上次这样做好像是投See’s糖果的时候,那是好多年以前的事了。像比亚迪这样年轻的公司需要我们的支持以便更快地获得公信力,这样才能发展得更好。我不会说我自己都不相信的话,I don’t say things I don’t believe.我不说言不由衷的话;所以,我对比亚迪的褒奖句句是真心话,你们尽可照单全收。”<br /><br /> <br /><br /> 当被问到是否会考虑投资于中国其他企业时,巴菲特客气地回答,对于世界各地的投资机会我们都是很关注的,只要符合我们的投资标准,我们都会考虑投资。芒格的回答更明确:“We got so charmed with BYD. 比亚迪让我们太心驰神往了,其他公司和比亚迪比起来总是相形见绌。”<br /><br /> <br /><br /> 总之,巴芒给我们传达的信息是:王传福是高尚的,比亚迪是强大的。<br /><br /> <br /><br />中国神话,高山仰止<br /><br /> 巴菲特十五年前第一次访华,为期十七天,主要是为了追随比尔盖茨夫妇。Buffett’s motivation for this round-the-world jaunt was the Gates. 巴菲特通过朋友K结识盖茨后就一直很喜欢这个商界天才,甚至为了参加盖茨的婚礼而放芒格的鸽子,没有去参加芒格七十大寿典礼,芒格对巴菲特当然很宽厚,反正巴菲特做什么他都会原谅。有人说盖茨成了巴菲特的第三个儿子;也有人说,讲到对盖茨的爱,巴菲特仅次于盖茨的太太Melinda。when it came to being in love with Gates, Buffett ran a close second to Melinda. 总之,巴菲特第一次来中国,不是为了中国,而是为了盖茨。多年之后,留在巴菲特记忆最深处的不是长城、紫禁城、三峡、钓鱼台宴请时盖茨夫妇特地安排为他做的一道又一道汉堡包和炸薯条,而是神农溪的纤夫。 “There could have been another Bill Gates among those men pulling our boat. They were born here, and they were destined to spend their lives tugging those boats the way they did ours. They didn’t have a chance. It was pure luck that we had a shot at the brass ring.” 在神农溪的船上时他就说:“那些拉船的纤夫中可能就有另一个比尔盖茨,但是他出生在这儿,注定一辈子这样辛苦地拉船,没有出人头地的机会。我们有机会获得这样的财富成功,钟鸣鼎食,纯粹是运气。” 这十五年来,富有恻隐之心的巴菲特每每会想起神农溪的纤夫,感慨命运的安排,人生的际遇。<br /><br /> <br /><br /> 9月29日下午,对话节目邀请了当年纤夫船长来到现场和巴菲特见面。老纤夫出场前,先让巴菲特看了一段节目组寻访老纤夫的录像,老纤夫已经不在神农溪拉船了,全家搬到了县城,住在一幢七层楼的房子里,过着幸福的生活。老纤夫上场,巴菲特和他热烈拥抱,淳朴的老纤夫拍着巴菲特的西装表袋说:“原来你这么有钱啊!” 老纤夫多半不知道在这个有史以来最杰出的投资家、人称股神心目中自己代表的是悲悯、宿命,这十几年他其实过得并不比任何其他人更痛苦,也许只有更开心,毕竟生活水平大大改善了。对于巴菲特来说,这一见面了却了不是心愿的心愿,修复了不是心理创伤的心理创伤,是件释怀快意的乐事。老纤夫的际遇折射了中国经济和社会的大发展,巴菲特深感触动。他在讲到中国发展时,从不吝啬渲染的词汇:“很难想象现在的中国和15年前的中国是同一个中国,城市面貌焕然一新,各项事业蓬勃发展。中央、省、市等各级政府为经济的发展营造了良好的环境,培养了许多像比亚迪这样的优秀企业和像王传福先生这样的优秀企业家,在很短的时间里取得了其他国家一百年也未必能够取得的进步,令人叹为观止!我很荣幸见证了中国过去15年的大发展,我希望我还能见证中国接下来10年20年甚至更长时间的大发展,见证中国成为世界一大强国! ” 当然他时刻不忘为比亚迪争取支持:“我们应该支持像比亚迪这样的公司,因为它的发展不是简单的一家公司的发展,它的技术会给13亿中国人民带来福祉,给 65亿地球人带来福祉,让我们祝愿这项造福人类、泽被子孙的伟大事业获得辉煌成功!<br /><br /> <br /><br /> 总结此次中国之行时,他这样说到:“这几天的中国之行太神奇精彩了(amazing),比亚迪的发展、各大城市的发展、整个中国的发展都给我们留下了十分深刻的印象,我们回去后会告诉我们的股东、告诉美国民众这里中国人民取得的巨大进步。我十五年前首次访华,三年前又去过大连,这次回来考察比亚迪,看到比亚的的大发展很是高兴激动,希望在不久的将来,我们还会来到中国,见证比亚迪年产电动客车年产50万辆的光辉一刻。 ”<br /><br /> <br /><br /> 最后一天在长沙答记者问时,巴菲特说:“这次中国之行所见所闻远远超过了我的预期!我当然也在电视等媒体上经常看到有关中国的报导,听到很多数字,比如 GDP的增长率等等,但是眼见为实,亲眼看到后的震撼力还是十分强烈。中国经济充满活力,孕育了大量的优秀企业和企业家。自我第一次来访至今15年间,中国经济取得了突飞猛进的发展,我坚信这个趋势会继续下去,中国经济将来会获得更大的发展。我向中国、中国人民致敬!”<br /><br /> <br /><br /> 如果说盖茨促成了巴菲特的首次中国行,给了巴菲特了解中国的机会,那么真正让巴菲特对中国产生好感的是芒格。被誉为本世纪最伟大的思想者的芒格很崇尚中国文化;对于很多西方人不能理解接受的一些中国现象,芒格很宽容,认为中国的制度系统“由于历史沿革的原因,有些奇怪,但是行之有效”。 2008年Berkshire Hathway股东年会上,有股民对于中国政府处理西藏问题的方式表示抗议,要求Berkshire Hathway出售可口可乐的股票,因为可口可乐是北京奥运会的赞助商。不愿得罪人、希望所有人都喜欢他的巴菲特碰到这种不涉及利害的冲突争议,一般打马虎眼,息事宁人。芒格则不然,他从不因为怕得罪人而放弃直抒胸臆,而且崇尚理性的他最讨厌用意识形态代替大脑思考。芒格缓缓说到:“西藏问题的是非曲直且不去说,我只问你,中国的民主制度是进步了还是退步了?既然是进步了,我们为什么要打击她呢?你难道是希望它退步吗?再说了,民主是个过程。 1929年美国举办奥运会时美国妇女还都没有选举权呢。 按照你的说法,我们当年就因该阻止美国举办奥运会。” 一番话,说得那股民哑口无言,一天会议从此再无人提中国民主问题。<br /><br /> <br /><br /> 芒格对中国的好感不知来源何处,可能是因为他很推崇孔子的思想的原因,他和孔子有着很强的认同感。他在北京接受采访解释自己为什么在中国比在美国更受欢迎的原因时说:“我觉得主要的原因可能是我的价值观比较接近孔子,重思考、重原则、重家庭、重教育,强调活到老学到老,学习是一种道德义务,life- long learning as a moral duty,主张用智慧改善自身、家人、同胞乃至整个人类的生存条件,use your wisdom to make your family and the world better, 务实,不偏执,我没有传统意义上的宗教信仰。”<br /><br /> <br /><br />慈善公益,见仁见智<br /><br /> 在这次中国之行中,巴菲特表示,把一个企业经营好,特别是像比亚迪这样的企业,为人类造福,本身就是慈善;盖茨认为,在此基础之上,可以以个人或公司的名义进行一些帮助弱势群体、赈灾救难等具体的慈善活动;芒格提到,欧洲包括英国在内,在慈善方面都做得不大,亚洲也不大。他说,“对于Warren和Bill的雄心壮志(笔者:大概就是指劝捐的雄心壮志)我表示同情和理解,不过我不会指示中国人该怎么做慈善,这是他们自己的事情,我可以选择捐我自己的钱,别人的钱捐不捐是他们的事。”<br /><br /> <br /><br /> 尽管巴菲特三天半行程中只有一个晚上参加盖茨基金的活动,但是那晚的慈善晚宴却吸引了全国乃至全球的目光,“劝捐鸿门宴”引发了国内外对于中国慈善业的激烈讨论。<br /><br /> <br /><br /> 有数据显示,美国慈善捐赠资金是GDP的1.7%,欧洲是0.7%,而中国是不到0.01%。为什么中国没有所谓捐赠文化?除了经济发展阶段不同、慈善机构治理透明程度不同等原因外,可能还有一个是价值观、人生观、世界观的原因。<br /><br /> <br /><br /> 巴菲特能捐出99%的财富,这和他价值观中的“娘胎彩票”理论分不开。 他说:“I’ve had it so good in this world, you know. The odds were fifty-to-one against me being born in the United States in 1930. I won the lottery the day emerged from the womb by being in the United States instead of in some other country where my chances would have been way different.”“我很幸运,1930年出生于美国,这个出生时空组合的概率是50比1,我从娘胎里出来的那一刻就好比中了50比1的彩票。如果不是出生在美国,而是其他国家,我的境遇就很不同了。” 他认为,一个社会应该鼓励强者自由翱翔,追求成功,但是成功了一定要帮助由于种种原因而没有成功的人,要回馈社会。 对于那些自以为“I did it all myself”全靠自己、和社会没关系、不愿意回馈社会的所谓成功人士,巴菲特很是反感,说:“你让他去选择,一个是生在孟加拉国,不用付税,另一个是生在美国,看他愿意付出他收入的百分之几以获得生在美国的娘胎彩票!” 巴菲特和盖茨是最早最激烈反对布什总统逐渐撤销遗产税计划的富人。巴菲特义愤填膺地说,我反对世袭相承的王朝,这好比在这一界奥运冠军的孩子中选拔下一界奥运的冠军,还有比这样的制度更背离民主精神的吗?一个少女单身妈妈领些社会福利金,你们富人都要嚷嚷说这样培养了穷人的依赖性,不公平;那你们给子孙后代留了这么多饭票,他们几代人可以完全不劳而获,就因为他们投对了娘胎,这样就公平了吗?!巴菲特对于自己的三个孩子从不纵容惯养,三个孩子上的都是公立学校,衣食住行都很普通,他们并不知道家里很有钱,过着和其他孩子一样的生活。<br /><br /> <br /><br /> 在巴菲特的思想里,有这么相互关联的两点,一是出生的时空是随机的概率事件,出生时空有利,好比中彩;二是致富发财、获得成功不完全是个人的努力,离不开社会这个大环境。所以中彩的富人捐钱做慈善,帮助没有中彩的其他人,是天经地义的。巴菲特不觉得自己有多了不起,他曾经在多个场合讲过以下相似的话:我是很幸运的,如果我出生在非洲,整天要和老虎狮子赛跑的话,我恐怕早就成了老虎的早餐了,因为实在跑不过别人;我很幸运,在我很小的时候我就知道自己喜欢做的是什么事情,我天生的性格使得我很适合做这个事情,并且在后天又获得了将这个事情做好的知识、技能,这个事情做好后又给我带来了巨大的财富和很高的社会地位。我太幸运了!一个士兵保家卫国,功勋卓著,得到的回报是国家颁发的一枚奖章;一个教师,教书育人,桃李天下,得到的是学生的感谢信;像我这样一个投资者,只是做了我该做的事情,得到的竟然是不可想象的巨额财富。他在北京比亚迪成点亮西藏捐赠仪式活动现场说:“Bill and I are extremely lucky. Efforts rewarded, I just get paid very well. Bill和我是超级幸运的,我们当然也很努力,但是我们的回报超级高。其实我没有什么特别之处,很多人比我更聪明更努力,我只是得到的报酬很好而已。我们有幸获得这么多的财富,简直不可思议。 Extra wealth,但是一个人活这一世,吃穿用度,花不了这么多钱的,剩余的财富应该回馈社会,帮助那些没有我们那么幸运的人,他们可能出生在贫穷的地区,没有接受良好教育的机会,或疾病缠身,或遇天灾人祸,我们应该帮助他们,这是我们应尽的义务!”<br /><br /> <br /><br /> 有了这样的价值观、人生观,不捐是不可能的事。这和东方文化不一样,东方文化深受佛教影响,人们多多少少相信因果轮回。投胎投得好,不是随机中奖,是上辈子积的德;既然是我上辈子积的德,这辈子的荣华富贵当然我来享受,凭什么要我捐出来帮助别人?谁让他们上辈子没积那么多德?当然,按照因果关系,如果这辈子捐钱积德了,那么下辈子还会有荣华富贵。问题是,下辈子到底有没有谁也不知道,下辈子等下辈子再说吧。所以,按照这个逻辑,不捐是天经地义的。给定巴菲特的思想,捐是默认状态;给定因果轮回思想,不捐是默认状态。如果不捐是默认状态,那么再加上发展阶段、程序方式上的一些障碍,中国几乎没人响应巴比裸捐号召也就很正常了。<br /><br /> <br /><br /> 除了价值观方面的区别,还有一个区别是立国精神。美国的立国精神是自由、平等、民主,父传子、子传孙的封建意识让崇尚“美国之梦”的巴菲特深恶痛绝;但是他的深恶痛绝倒让大多数中国人不能理解,几千年的封建王朝统治使得封建意识根深蒂固地植入了现代中国人的思想中。有人开玩笑说,美国人是为下一分钟活着,印度人是为下一辈子活着,中国人是为下一代活着。打个不恰当的比方,好比财务年度,美国是一代一结帐,印度是三代一结帐,中国是两代一结帐。既然是为下一代活着,一旦富贵了,把饭票留给下一代以及下一代的下一代,不是很正常吗?别人也没什么好说的,投对娘胎就是最大的本事。所以巴菲特的义愤填膺让马云也一样义愤填膺,马云说一个不把财富留给自己孩子、不照顾自己孩子的人,你怎么能相信他会照顾社会呢?正是这样的思想,才会使得中国权贵资本主义大行天下,而天下还很太平。<br /><br /> <br /><br /> 睿智的芒格在北京活动现场最后补充的一句话或许提示了我们慈善的另一个侧面:“And you are not allowed to take it to grave. More fun to give it away yourself. 反正也带不进坟墓去,不如自己捐掉,这更有意思。”<br /><br /> <br /><br />中国经济:转型与泡沫<br /><br /> 有人问芒格:“中国以前靠劳动力密集型产业发展经济,现在这些行业利润越来越薄,难以为继,而资本密集、技术密集的行业尚未发展起来,而且如果发展资本密集型的行业,那么原来的劳动力到哪儿去找工作呢?您认为中国经济转型的出路在哪里?”芒格回答:“中国还有大量的劳动力没有就业机会,我不觉得劳动力密集型产业就不该发展了;而且,技术密集型、资本密集型行业中国不是已经在发展了吗?很多行业高精尖的技术都在中国啊,中国有很多技术水平领先世界的公司,比如比亚迪。”巴菲特补充:“在人类发展的过程中,一个行业的重要性是会发生变化的,这是规律。比如,1920年,美国1.5亿人中从事农业的人口高占 30%;现在美国3.1亿人口中只有2%的人从事农业。如果1920年的时候你和当时的美国人说,以后只有2%的人从事农业了,他们会很惊讶地问,那么剩下的人不就失业没事做了吗?今天我们知道,其实不是这样。农业在经济中的占比降低了,但是涌现了很多新兴产业,人们不怕没有工作做。比如,八十年代,盖茨他们开创的新行业就给成千上万人提供了就业机会。你们的经济在过去二三十年发展迅猛,我想将来二三十年还会继续发展下去;现在中国的很多工作二三十年前的人是完全想不到的,再过二三十年会有怎样的工作,现在的人们也是同样不可想象的。不用担心以后没有工作,要动态地思考这个问题,只要经济发展,只要你勤奋努力,就不怕没有事做。”<br /><br /> <br /><br /> 有记者问芒格:“您是否认为中国股市有严重的泡沫?” 芒格马上回答:“当然有严重的泡沫啰!中国人天性好赌,没有泡沫才怪呢!不过这也没有什么,哪个国家的股市没有过泡沫呢? Some Chinese are over-obsessed with gambling有的中国人沉溺于赌博,沉溺于急功近利赚快钱,把股票看成赌场的筹码,这太糟糕了!股票背后是有实实在在的企业的,不是赌场的筹码!我们应该做投资,投资于企业,股票只是一个载体,不能投机赌筹码。如果变成了一个职业赌徒,一生都耗在赌博上,就算赚了钱又如何?这是多么糟糕可怕的一生!terrible terrible life!美国已经犯过这种愚蠢的错误了,结果是整个资本市场变成了一个大赌场,欺诈猖獗,疯狂搏傻,泡沫越赌越大,破裂之后损失巨大,惨不忍睹。前车之鉴,后事之师呀,你们不要犯同样的错误了!”<br /><br /> <br /><br />投资理念,4M制胜<br /><br /> 巴菲特说他自己很幸运,很小的时候就知道自己喜欢做什么,并且拥有将这件事情做好的天份以及后天习得的技能。这件事情就是投资。巴菲特认为两件事情很重要,一是赚钱,二是长寿。估计很多人也都这么认为,但是很少有人能都做到。巴爷说,我要赚钱,有钱了我就有了自由,有了自由我就可以做我喜欢做的事情。巧妙的是,他喜欢做的事情还是赚钱,这就形成了一个良性循环。他的财富像雪球一样,从六岁时开始卖口香糖、可口可乐积攒的几分几毛的第一片雪片滚到顶峰时世界首富600亿美金,然后他又将其中的99%捐去做慈善,自己生活十分节俭,至今住着50年前花了31,500美金买的房子,在简陋的办公室办公,穿着很普通甚至可以说很土气的衣服,自己开车上下班,自己搬行李,吃着汉堡和樱桃可乐。我们中国任何一个有点钱的人比他的物质享受都要多不知多少倍,比如,洗头捏脚之类的服务巴菲特估计是没有享受过的。 但是他的生活质量很高,主要是精神思想上的享受。对巴菲特来说,赚钱可以算是一种数字游戏,是智力的较量。他从小喜欢数字,喜欢概率,喜欢收集,喜欢竞争,喜欢伸张正义。他小时候很喜欢跟父母去教堂,大人忙着唱圣歌,他忙着看圣歌作曲者的生卒年份,计算他们的寿命,结果发现这些作曲者并没有因为为上帝谱写赞美诗而比常人多活几年,很是失望。他会坐在街头记录每一辆路过的车的车牌号码,计算每一个数字出现的概率,乐此不疲,因为他相信哪天街角那家银行遭抢劫后,他的记录对警方破案会大有帮助。他小时候喜欢收集小石头、可乐瓶盖、邮票等东西。他把三颗小石头放在浴缸边上,给每一个小石头取好名字,他和姐姐、妹妹各认领一颗,他一摁秒表,三人同时把小石头推进浴缸的水里,看哪一颗小石头最先到达浴缸底部,花了几秒钟。他不厌其烦地天天拉着他姐姐妹妹玩这个游戏,希望小石头天天有进步。这些性格特征的组合十分难得,投资成功正是需要这样的组合。不过,他也完全有可能将这个组合用在其他方面。好在命运没有这样安排,不然我们就见不到有史以来最优秀的投资家了。这要感谢巴菲特的父亲,他在三个孩子十岁时都带他们去进行一趟东部之旅,巴菲特选择去的是华尔街。在证交所的餐厅里,他看到证交所的会员们用完餐后会招呼一个脖子上挂着一个托盘的人,托盘里放着各种烟叶,那人就根据客人挑的烟叶现场卷制雪茄烟。巴菲特看呆了,他意识到这些证交所的人肯定赚了很多很多钱才能在满目苍痍的经济中还过着这样讲究的生活,雪茄都是定制的,这样享受。巴菲特看到卖雪茄烟的人这一天,也是他人生目标明确形成的一天,他暗暗下定决定,一定要赚钱,一定要赚钱!当然,他赚钱不是为了抽雪茄,或者其他的享受,而是为了获得自由,为了不受制于任何人,为自己工作,为自己生活,做自己想做的事情。从那一天开始,他把喜欢数字概率,喜欢收集竞争,喜欢公平正义等性格特征都用到了投资中,慢慢形成了自己独特的一套投资理念和方法,在接下来的70年里创造了巨额财富。<br /><br /> <br /><br /> 对巴菲特投资理念的形成起了最早最大影响的莫过于本·格莱姆,他是巴菲特在哥伦比亚大学读书时的老师,是巴菲特心目中的英雄。格莱姆的投资公司在20年间平均每年跑赢市场2.5个百分点,这在巴菲特出现之前是很十分了不起的成绩。格莱姆取得这样骄人成绩的主要原因是他分析数字的能力非常了得。在他之前,股票的估值没有什么道理可讲,基本上全是臆想猜测。格莱姆建立了第一套系统全面评估股票价值的方法。不过他只分析公开现有的数据,一般是公司的财务报表,而不愿意去打探非公开现有的信息,他拒绝走访公司,了解管理层,他认为这是作弊,因为他把投资看成纯粹的智力游戏。<br /><br /> <br /><br /> 巴菲特师从格莱姆,学到了三大道理:一、股票是拥有一个企业的一小部分的凭证,它的价值不是虚无缥缈的,它有内在价值,它的内在价值取决于它所代表的企业的价值;二、投资决策的依据是估算分析,估算分析难免会有误差,所以,为了保证投资结果不被误差寝室殆尽,需要设立一个较大的价格安全边际;三、“市场先生”是你的仆人,不是你的主人,格莱姆将市场比拟为一个人,这位先生喜怒无常,情绪阴晴不定,又恐惧又贪婪,不要让他影响你对价值的判断,他的喜怒好恶不能代表任何问题,他只是你的仆人,给你提供买卖股票的工具场所而已。<br /><br /> <br /><br /> 这三点让巴菲特受益匪浅,但是一定程度上也束缚了他的投资。因为格莱姆超级冷静的理性导致了沉闷的悲观主义,表现在投资上,就是所谓“烟屁股投资法”。他会很辛苦地寻找市值大大低于资产账面价值的股票,甚至有一段时间只找市值低于流动资金(流动资产减掉流动负债)的股票,这些死了比活着更值钱的企业(清盘资产变卖所得资金高于股票价格)被称为香烟头,意思是它们像被人抽得差不多的扔掉的香烟头,格莱姆会买进大量不同的香烟头,分散风险,总有一些香烟头可以抽到最后一口烟。这样的投资尽管很辛苦,又平淡,回报也不是非常高,但是它的风险很低,相对于承受的风险来说回报是很高的。<br /><br /> <br /><br /> 巴菲特早年的投资就是这样捡香烟头,接触菲舍的理论和认识芒格之后才有所改变。芒格认为格莱姆的悲观理性主义使得他错误地认为将来充满着风险而不是同样充满着机会,这种不对称的认识阻碍了投资。和格莱姆正相反,芒格喜欢优秀的企业great businesses,管理层能力强,品牌强大,这些别的企业模仿起来都需要很长一段时间;可以自我造血,不需要隔一段时间就要投入资本以维持营运。芒格一旦看准了投资机会,还会去借所有能够借到的钱去投资,充分运用融资杠杆,这在巴菲特也是匪夷所思的。芒格常说,投资要稳准狠,你要认为不好,那你就索性不投;你要认为真的值得投,那为什么不多投一点?任何中间状态在逻辑上都不成立的。 1963-64年间,巴菲特和芒格处于“热恋期”,每天通话不少于三个小时,芒格将巴菲特视为投资之王,但同时也认为自己也很聪明,能在认为自己正确的时候坚持己见。他的名言是:“你会同意我的观点的,Warren,因为我是正确的,而你是聪明的。” 在芒格的影响下,巴菲特慢慢开始将格莱姆的悲观谨慎和芒格的乐观从容结合起来了,其实巴菲特对于美国经济和企业的长期发展是很有信心的,芒格的投资理念也暗合了他的思想,他开始不再捡烟屁股,不再在一堆金子里找金针,最终形成了现在倍受世人推崇的“价值投资法”。为了方便记忆,笔者用4M来解释对“价值投资法”的理解。<br /><br /> <br /><br /> 第一个M可以理解为市场,或者行业,也就是这个企业所在的行业是一个能够赚钱的行业。有些行业就是不能赚钱,这可以用波特的五力分析模型来分析,即同业竞争、进入壁垒、替代品、供应商的议价能力、买方的议价能力五个方面,在现代经济中,可能还要增加一个互补品这一力量。五力分析模型的精髓是全面性,每一个单独的力量都只是必要非充分条件,缺了任何一个力量,这个行业的获利能力就会受影响。比如,飞机制造业,同业竞争者少、进入壁垒高、替代品少、供应商的议价能力弱,这对这个行业都很有利,但是最后一个力量,买方议价能力很强,这个行业盈利能力就不强。所以,一个行业一个企业的盈利能力高低要综合分析,不是说经济发展了所有行业企业的获利能力都会提高,不是说新兴技术的行业企业肯定能赚钱。 1999年7月,在因特网泡沫鼎盛的时候,巴菲特参加太阳谷的峰会并发言,他旁征博引历史数据委婉地说明他的判断:这是个泡沫!1964年12月31号到 1981年12月31号,这17年间,美国经济总量翻了5倍,财富500强企业总销售收入翻了不止5倍,道琼斯指数在这两个时点的数字分别是874.12 和875.00。他又举了汽车行业的例子,美国曾经有2000家汽车公司,最后幸存下来的只有3家,就这3家,曾经一度市值都低于账面价值。汽车是二十世纪上半叶最伟大的发明之一,给人类带来了巨大的便利,对美国经济具有重大贡献,对于投资者,它的影响也很大,但是是负面的。他还提到了二十世纪上半叶另一个伟大发明,飞机,几年前,对于航空业的股票投资累计回报是为零(笔者:我们知道,现在是负数)。他还开玩笑说,如果当年他在莱特兄弟试飞第一架飞机的现场的话,他希望自己有勇气把那架飞机射下来,“这是我向未来投资者应尽的义务”。他后来还曾说,似乎所有带翅膀的东西都投不得。巴菲特几乎从不投高科技企业,这可能是个原因。诚然,科技造福人类,但是人类不是投资者。<br /><br /> <br /><br /> 第二个M是管理层,管理层要能干可靠,人是至关重要的,同样的事情,不同的人去做结果会很不同。有的人适合做管理,做得好;有的人不适合做管理,做不好,这是客观规律。芒格对于管理人才的问题是这么看的,“我们不培养他们,我们寻找他们。”<br /><br /> <br /><br /> 第三个M是护城河(moat),即可持续的竞争优势,比如需求方来讲的品牌效应、供应方来讲的规模经济效应等。<br /><br /> <br /><br /> 第四个M是安全边际,即购入的价格应该远远低于价值,这样就算分析估算有误差,投资回报也不会荡然无存。<br /><br /> <br /><br /> 每一个单独的M都只是必要非充分条件,缺了任何一个M,这个企业就不会成功。所以说,成功的企业个个相似,不成功的企业各有各的不成功。如果投资符合这四大条件,那么就是一个理想的投资,它不断地带来很高的投资回报,我们再把它产生的资金配置到回报率同样高的地方去,这就形成了一台滚雪球的机器 (compounding machine),财源滚滚来了。 Berkshire Hathway当年是美国服装衬里最大的生产商,但是这个行业本身不赚钱,最后巴菲特不得不将它转型成他做投资的平台。可口可乐当年的首席执行官 Ivester食品安全问题处理不当、过度压榨瓶装商,没有能力,最后巴菲特不得不请他走人,至于把老婆买浴帘的1500美金发票拿到公司报销的首席执行官那当然更不能用。巴菲特旗下七十多家公司几乎都有由品牌或者规模经济效应等形成的护城河,比如喜诗糖果属于前者,GEICO属于后者。最后一个M,安全边际,这是很容易理解的,前面三个M讲的都是分子,投资回报,这第四个M讲的是分母,投资本钱,企业再好,如果股价已经很高了,再买就危险了,投资回报就不高了。<br /><br /> <br /><br /> 巴菲特为什么会投资比亚迪呢?众所周知,是因为芒格的强烈推荐。都想把莱特兄弟试飞的第一架飞机射下来的巴菲特没有想炸掉比亚迪出品的世界第一辆纯电动车反而投资占了10%的股份,这的确让很多巴迷百思不得其解。其实,投资比亚迪并不违背巴菲特的4M投资理念,巴芒从来没有说绝对不投高科技,只是说不投不能理解、看不懂的技术,巴菲特此次访比答记者问时也一再强调“我们只投我或者芒格看得懂的企业”,尽管巴爷对电动车、新能源可能不太懂,但是博览群书、对科技一向很感兴趣的芒格对这个领域应该是比较了解的,此次86岁高龄随行访比,足见芒格对自己判断的信心。另外三个M当然更符合了,对于王传福挂帅的比亚迪管理层巴芒是越看越欢喜,在各个场合都给予了最高评价。比亚迪的护城河也很深,铁电池技术独占鳌头,无人能敌;品牌也有一定优势。安全边际更是没有问题,巴菲特的比亚迪投资现在已经翻了7倍。当然,巴菲特力挺比亚迪,也有可能是属于芒格说的“结婚前睁大两只眼,结婚后睁一只眼闭一只眼”的情况,反正在巴菲特近2000亿的投资组合中比亚迪是沧海一粟。但是这是我们中国人唯一的一粟,还是让我们祝福比亚迪一路走好,不辜负巴芒,不辜负国人。<br /><br /> <br /><br />三人行,必有我师<br /><br /> 巴菲特、芒格、盖茨此次锵锵三人行,估计是历史上最后一次了。三人的关系很是有趣,巴菲特和芒格是半个世纪故交,巴菲特和盖茨是忘年交,两人相差25岁。芒格和盖茨都是巴菲特的朋友,不过相互之间没有太多的交往,两人都是属于绝顶聪明也意识到自己绝顶聪明很难和不聪明的人打交道很难忍受不聪明人的不聪明的那种聪明人。巴菲特相对比较能和别人相处,尽管他也会不耐烦,但是他会努力掩饰。由于他母亲的关系,他从小缺乏安全感和自信心,所以一辈子都很努力地去讨好别人,希望大家都喜欢他,他还专门去听卡耐基的课,学习和别人团结友爱的方法。他很会激励旗下公司的管理层,用他自己的话说,会“卡耐基”他们。对于身边的工作人员也是一样,他会夸奖翻译说:“你真是翻得太好了!” 怕翻译翻饿了,递一盒打开的巧克力过去说:“你吃块巧克力吧。” 吃到巧克力和边上看到的人都十分感动。<br /><br /> <br /><br /> 比亚迪的投资是芒格主导的,所以这次访比,可以说是盖茨陪巴菲特陪芒格,这样三人就一串儿都来了,往台上一坐,整整1000亿美金坐在那儿,蔚为壮观。芒格对于中国和比亚迪的推崇完全可以理解,巴菲特看在老哥的面上对于中国和比亚迪的推崇也可以理解,倒是盖茨很不容易,一路从深圳陪到北京,陪到长沙,而且发言时十分谦虚,中国的发展举世瞩目,令人叹为观止,比亚迪创新为本,造福人类,十分了不起,云云。长沙站有记者问盖茨,盖茨先生,您是世界上最优秀的企业家,您对比亚迪有什么建议吗?盖茨回答说:“比亚迪有着最优秀的领导人,做得非常好,不需要我给他们提什么建议吧,他们的创新能力和快速增长倒是值得我们好好学习。如果说微软有什么经验的话,那就是要有长远的目光战略、要注重人才的培养发展、要重视客户基础的打造,但是这几点我觉得比亚迪都已经意识到了,也都做到了,所以芒格先生才会这样推崇比亚迪,告诉Warren一定要投资。我很荣幸这次能够一起来拜访比亚迪,见证比亚迪的成功发展。”<br /><br /> <br /><br /> 现年55岁的盖茨不再是哈佛辍学创业的毛头小伙了,两鬓斑白,满脸斑纹,但是举手投足还是和往年一样,一种慵懒倦怠百无聊懒的样子,太聪明的人似乎多多少少都这样,不过说起话来就完全不同,声音清晰犀利,很有穿透力,逻辑缜密,用词精当。主持人寒暄中问到盖茨,“听说您是twitter微博的粉丝,是这样吗?”在待人接物、世故人情方面比较冷淡“微薄”的盖茨,说到技术就热情了,说:“微博是个好东西,这几天在中国出访,我随时发微博给我在美国的家人朋友同事,告诉他们我的行程,所见所闻,这样的沟通实时性和现场感很强,太好了!”<br /><br /> <br /><br /> 在和比亚迪员工对话时,他还详细谈到了未来技术发展的四大趋势。一是输入方式的革新,目前为止,信息输入系统主要靠键盘,以后手写、语音等技术将降低键盘作为信息输入方式的重要性,这是最最大的趋势;二是收看界面,以后人们通过视觉获得信息的界面会统一起来,书、电视、因特网等等都会统一到一个界面上;三是教育的数字化,将来顶级学校的顶级教授的授课世界各地的学生都可以接受到,你可以按照自己的特别度身定制教育的内容,这将大大提高教育的效果和效率;四是机器人的普及将会成为现实,我想比亚迪以后就会开发出机器人,软件和硬件高度结合,这方面微软也许可以和比亚迪合作。<br /><br /> <br /><br /> 巴菲特带着他这两位同样是几百年也出不了一个的朋友造访中国,造访比亚迪,给比亚迪带来了无限的动力,给巴迷们带来了又一次思想的盛宴,给中国人带来了骄傲和自豪!祝巴芒健康长寿,祝巴比心想事成!Dance With Mehttp://www.blogger.com/profile/11452760400913968147noreply@blogger.com0