While I admire the brilliance of Warren Buffett I will point out why he has had an unfair advantage and did quite a few things a bit unconventionally to say the least: Buffett’s Dad used to be in Congress. The only people who are allowed to trade on insider information without having criminal charges brought against them are congressmen (btw this is no longer allowed since April 4, 2012) Buffett’s Dad was a stock market broker/trader prior to being elected and going to Congress (he knew the stock market well and had interest in it) Warren from a young age used to go to his Dad at work and spent time in his office because he wanted to escape from his mother, who was a very difficult person with many issues. So Warren learned about stocks and his Dad actually had him buy his first shares in 1942 at age 11 After graduating, Warren Buffett went to his Dad’s acquaintances to raise Capital for his first fund. These were prominent families in Nebraska with big businesses and political connections (ie across the street was the family whose son became the CEO of Coca Cola) that family gave him $10,000 in the 50′s - he could’ve bought several homes for that amount of money (they knew the dad was in Congress!!!) When Buffett’s Dad died in the early 60′s Buffett panicked and closed his fund and returned the money (no more insider info made him worry!) He then met Charlie Munger, who is a freak of nature, brilliant person who helped Buffett a great deal and since Buffett was no dummy and was already well versed on how to analyze the stock market data, Buffett launched another fund that became Berkshire Hathaway Buffett to this day says that if you buy an asset that does not produce income hoping it will go up, you are in fact speculating but his stock NEVER paid a penny in dividends - his stock by his own definition is a speculative one - those who joined him never to this day gotten a penny in dividend pay out - they never needed the income anyway but they knew he was well connected and the stock had no way but up and up in a compounding way To this day Buffett does not buy that much in the open market and often does his transaction off market like when he bought the long term LEAPS (derivative calls) in 2009 betting the economy will go up in a few years and he was right but no one else could do such a transaction Buffett also buys entire companies off market and because he is publicly traded it is like taking them to the market with a ridiculous multiplier Buffett says when he decides to buy a company he goes for it without worrying too much (listen to his story about buying the furniture company from the old Russian immigrant lady) but what he neglects to say is that he has an army of experts doing analysis and lawyers to draft the deals the way he wants His stories about Goldman Sachs fraud and what he did to bail himself out of this mess will take another page to explain but suffice it to say it is a good example of what money, power and connections can do especially if he can in exchange show that he was distant from the decision making process and can promise to say something very positive in the news about the US markets to restore the global faith in the US economy! Buffett would only give up his money when he dies, when he is alive he would not part with one penny (He later changed his mind because he found a way to transfer the shares of Berkshire to various charities - this way he could get the biggest tax breaks while looking great as a Philanthropist, all while Berkshire can remain the mega power house that it is) He disowned his own adopted granddaughter for speaking the truth about money and power and specifically about him His wife Susan left him and moved to California - when they interviewed her she said, I am not sure if he noticed that I even left him! He ended up shacking up with her best friend whom he married after his wife died And now with a few recaps to put it all together: Know that he pulled it all off without anyone complaining so imagine if you can: Get insider information to trade on it Get money from wealthy people to put in your fund when you are in your 20′s are a great sales person and are using your Dad’s great connections of super wealthy people Pay no return and just benefit by half of the growth of any stock you buy without paying taxes or investing any of your own money till later when you have plenty Let the growth compound and grow with institutional money Become so connected on wall street to be able to buy in the secondary market Become so politically connected that the government can seek your help (ie you get to know about the billions in bail out money coming to Wells Fargo and Bank of America in advance and you can buy millions of share at $5 on BofA for instance knowing for sure those shares will be trading at $20 and $30+ in matter of a few years! Be able to sit on billions of dollars waiting for the inevitable economic disaster cycles to hit so you can pounce and buy at pennies on the dollar - imagine you could only do that because you do not have to pay one cent in dividend (no return) on the billions investors and institutions give you in your fund Giving others advice that cash is a position but then explaining that cash is bad because inflation is the silent killer Saying that borrowing and leveraging is bad but that is precisely how he is structured and the difference is he does not have to pay interest and can cash out anyone at anytime because of the structure of funds traded through market makers Being able to set up baby Berkshire Hathaway shares to kill and compete anyone trying to copy his structure by emulating the shares he is holding I can continue but you got the idea - no one will ever outsmart, outwit, outconnect or outsell the master of all masters (who is no saint) Mr Warren Buffett!
even all this aside, what young adult has a bunch of millionaires sitting around them willing to give you money with to play the market.. I don't care how good you are at sales (I am in sales) nobody on earth is that good, they gave this kid money because of his dad and the insider knowledge that was to come from his partnership... essentially it was a sure fire way of making them all rich together.. there is no other logical explanation for it. back then with little tech to find out the details.. all the unofficial info going around post war.... it is pretty obvious that it worked that way. one of the Largest lies in the USA is that it is the land of opportunity and freedom... people with the right connections like anywhere else... get the golden goose.. you sure need the intelligence and smarts to keep it all going yes, but you are nowhere without the initial connections to certain people in this life.
A really important idea to consider here. I suppose the problem with this message is that the old dunning-kruger effect, there are just too many people (me included) who over estimate their ability at stock picking, so we need to be regularly told not to. Like you say we're not all Buffet's. Anyway great video mate, you can be in my 5 a side team any day.
Good vid! Especially appreciate the point about getting caught up in soundbites. It's worth noting that Berkshire has two other portfolio managers who use much smaller amounts of capital. These are included in the Berkshire 13F and so most of the smaller positions are not Buffet. Considering all the businesses they own wholly it is a very large portfolio though.
Thanks Ethan, yes good point on the other managers. I almost went into more detail on that but didn’t want to add too much waffle! Thanks for watching! 👊🏻
Another fantastic video filled with oddly satisfying sexual innuendos, I can just imagine a game of football like Mean Machine played out with Buffet, Munger and Yourself 😂
The biggest lie about Buffet is that he got the majority of his personal fortune by investing. No he got most of his money from running his own investment firm where he got an enormous salary and his publicly tours. I'm not saying he isnt a great investor or that he didn't make a lot of money. I'm just saying most of his original income came from salary.
I think this is less an investment strategy discussion (for folks like Buffett) than a political discussion. I think many people like him hate seeing money thrown into index funds and then inevitably feeding money to businesses that may have terrible fundamentals. Buffett thinks his work of turning around failing business as the greatest public works that could be done. He believes these bad businesses should not receive investment as it undermines the meritocracy. It is his ideology.
This is good videography but you are not fair to Buffett. It is known that Ted and Tod (forgive my spelling) are also making investment decisions. The "smaller" sums invested are generally theirs. True Buffett preaches 5-6 stocks are enough because frankly for the average person that has a work to go every morning and a family to attend to that is the limit of what he can keep track of. I can vouch for that. Many Buffett possessions are decades old now and part of the keep for ever mantra. If you remove them (like Coca Cola and American Express) you end up with a handful of stocks. Really his actual bets are oil companies like OXY, the Japanese trade houses and a failed bet on HP. Also BYD, banks and maybe Kroger. That is IT. Add Apple and you have 7. Judging by his HP bet, 7 may be too many. But You, how have you done with other peoples money compared to the SP500 Index?
PS: Always remember Peter Lynch's saying: In investing the most important organ is the stomach. If one wants to play it safe and "sleep well at night" results will be subpar.
While I admire the brilliance of Warren Buffett I will point out why he has had an unfair advantage and did quite a few things a bit unconventionally to say the least:
Buffett’s Dad used to be in Congress. The only people who are allowed to trade on insider information without having criminal charges brought against them are congressmen (btw this is no longer allowed since April 4, 2012)
Buffett’s Dad was a stock market broker/trader prior to being elected and going to Congress (he knew the stock market well and had interest in it)
Warren from a young age used to go to his Dad at work and spent time in his office because he wanted to escape from his mother, who was a very difficult person with many issues. So Warren learned about stocks and his Dad actually had him buy his first shares in 1942 at age 11
After graduating, Warren Buffett went to his Dad’s acquaintances to raise Capital for his first fund. These were prominent families in Nebraska with big businesses and political connections (ie across the street was the family whose son became the CEO of Coca Cola) that family gave him $10,000 in the 50′s - he could’ve bought several homes for that amount of money (they knew the dad was in Congress!!!)
When Buffett’s Dad died in the early 60′s Buffett panicked and closed his fund and returned the money (no more insider info made him worry!)
He then met Charlie Munger, who is a freak of nature, brilliant person who helped Buffett a great deal and since Buffett was no dummy and was already well versed on how to analyze the stock market data, Buffett launched another fund that became Berkshire Hathaway
Buffett to this day says that if you buy an asset that does not produce income hoping it will go up, you are in fact speculating but his stock NEVER paid a penny in dividends - his stock by his own definition is a speculative one - those who joined him never to this day gotten a penny in dividend pay out - they never needed the income anyway but they knew he was well connected and the stock had no way but up and up in a compounding way
To this day Buffett does not buy that much in the open market and often does his transaction off market like when he bought the long term LEAPS (derivative calls) in 2009 betting the economy will go up in a few years and he was right but no one else could do such a transaction
Buffett also buys entire companies off market and because he is publicly traded it is like taking them to the market with a ridiculous multiplier
Buffett says when he decides to buy a company he goes for it without worrying too much (listen to his story about buying the furniture company from the old Russian immigrant lady) but what he neglects to say is that he has an army of experts doing analysis and lawyers to draft the deals the way he wants
His stories about Goldman Sachs fraud and what he did to bail himself out of this mess will take another page to explain but suffice it to say it is a good example of what money, power and connections can do especially if he can in exchange show that he was distant from the decision making process and can promise to say something very positive in the news about the US markets to restore the global faith in the US economy!
Buffett would only give up his money when he dies, when he is alive he would not part with one penny (He later changed his mind because he found a way to transfer the shares of Berkshire to various charities - this way he could get the biggest tax breaks while looking great as a Philanthropist, all while Berkshire can remain the mega power house that it is)
He disowned his own adopted granddaughter for speaking the truth about money and power and specifically about him
His wife Susan left him and moved to California - when they interviewed her she said, I am not sure if he noticed that I even left him!
He ended up shacking up with her best friend whom he married after his wife died
And now with a few recaps to put it all together:
Know that he pulled it all off without anyone complaining so imagine if you can:
Get insider information to trade on it
Get money from wealthy people to put in your fund when you are in your 20′s are a great sales person and are using your Dad’s great connections of super wealthy people
Pay no return and just benefit by half of the growth of any stock you buy without paying taxes or investing any of your own money till later when you have plenty
Let the growth compound and grow with institutional money
Become so connected on wall street to be able to buy in the secondary market
Become so politically connected that the government can seek your help (ie you get to know about the billions in bail out money coming to Wells Fargo and Bank of America in advance and you can buy millions of share at $5 on BofA for instance knowing for sure those shares will be trading at $20 and $30+ in matter of a few years!
Be able to sit on billions of dollars waiting for the inevitable economic disaster cycles to hit so you can pounce and buy at pennies on the dollar - imagine you could only do that because you do not have to pay one cent in dividend (no return) on the billions investors and institutions give you in your fund
Giving others advice that cash is a position but then explaining that cash is bad because inflation is the silent killer
Saying that borrowing and leveraging is bad but that is precisely how he is structured and the difference is he does not have to pay interest and can cash out anyone at anytime because of the structure of funds traded through market makers
Being able to set up baby Berkshire Hathaway shares to kill and compete anyone trying to copy his structure by emulating the shares he is holding
I can continue but you got the idea - no one will ever outsmart, outwit, outconnect or outsell the master of all masters (who is no saint) Mr Warren Buffett!
Excellent comments
Billionaires are the greediest motherfuckers ever.
even all this aside, what young adult has a bunch of millionaires sitting around them willing to give you money with to play the market.. I don't care how good you are at sales (I am in sales) nobody on earth is that good, they gave this kid money because of his dad and the insider knowledge that was to come from his partnership... essentially it was a sure fire way of making them all rich together.. there is no other logical explanation for it. back then with little tech to find out the details.. all the unofficial info going around post war.... it is pretty obvious that it worked that way. one of the Largest lies in the USA is that it is the land of opportunity and freedom... people with the right connections like anywhere else... get the golden goose.. you sure need the intelligence and smarts to keep it all going yes, but you are nowhere without the initial connections to certain people in this life.
A really important idea to consider here. I suppose the problem with this message is that the old dunning-kruger effect, there are just too many people (me included) who over estimate their ability at stock picking, so we need to be regularly told not to. Like you say we're not all Buffet's. Anyway great video mate, you can be in my 5 a side team any day.
Thanks mate! You’d make my team any day.
Dude what are you trading penny stocks? It's really not that hard to make money in the stock market lmao.
It's rare to chuckle during a video on investing, great content and enjoy the little jokes. Subscribed👍
Thank you! And welcome
Phone call is a great moment. Great story, excellent work. 👍
Thank you as always David!
Good vid! Especially appreciate the point about getting caught up in soundbites. It's worth noting that Berkshire has two other portfolio managers who use much smaller amounts of capital. These are included in the Berkshire 13F and so most of the smaller positions are not Buffet. Considering all the businesses they own wholly it is a very large portfolio though.
Thanks Ethan, yes good point on the other managers. I almost went into more detail on that but didn’t want to add too much waffle! Thanks for watching! 👊🏻
This channel is under appreciated
Thank you for your kind words
Another fantastic video filled with oddly satisfying sexual innuendos, I can just imagine a game of football like Mean Machine played out with Buffet, Munger and Yourself 😂
Haha! Imagine that! Even I might score a goal or 2. Steady…
There is somekind of certainty if all odds are in your favour etc. ... you can design the universe within its laws
This was very funny, thank you.
Thank you! Glad you enjoyed!
'Steady' :-)
Steady……!!!
“Perhaps stick him in goal though” 😂
no gloves, let's sting his hands.
The biggest lie about Buffet is that he got the majority of his personal fortune by investing. No he got most of his money from running his own investment firm where he got an enormous salary and his publicly tours. I'm not saying he isnt a great investor or that he didn't make a lot of money. I'm just saying most of his original income came from salary.
Either way he’s a talented guy for sure!
Most of his wealth was made through insurance look it up.
Thanks a great vid!
Thanks Peter, glad you enjoyed
I think this is less an investment strategy discussion (for folks like Buffett) than a political discussion. I think many people like him hate seeing money thrown into index funds and then inevitably feeding money to businesses that may have terrible fundamentals. Buffett thinks his work of turning around failing business as the greatest public works that could be done. He believes these bad businesses should not receive investment as it undermines the meritocracy. It is his ideology.
This is good videography but you are not fair to Buffett. It is known that Ted and Tod (forgive my spelling) are also making investment decisions. The "smaller" sums invested are generally theirs. True Buffett preaches 5-6 stocks are enough because frankly for the average person that has a work to go every morning and a family to attend to that is the limit of what he can keep track of. I can vouch for that. Many Buffett possessions are decades old now and part of the keep for ever mantra. If you remove them (like Coca Cola and American Express) you end up with a handful of stocks. Really his actual bets are oil companies like OXY, the Japanese trade houses and a failed bet on HP. Also BYD, banks and maybe Kroger. That is IT. Add Apple and you have 7. Judging by his HP bet, 7 may be too many.
But You, how have you done with other peoples money compared to the SP500 Index?
PS: Always remember Peter Lynch's saying: In investing the most important organ is the stomach. If one wants to play it safe and "sleep well at night" results will be subpar.