Here are some nuggets of wisdom from Warren Buffett's letter to shareholders
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* By year end, investors of all stripes were bloodied and confused, much as if they were small birds that had strayed into a badminton game.
* The watchword throughout the country became the creed I saw on restaurant walls when I was young: "In God we trust; all others pay cash."
* Economic medicine that was previously meted out by the cupful has recently been dispensed by the barrel. These once-unthinkable dosages will almost certainly bring on unwelcome aftereffects.
* Though the path has not been smooth, our economic system has worked extraordinarily well over time. It has unleashed human potential as no other system has, and it will continue to do so. America's best days lie ahead.
* When investing, pessimism is your friend, euphoria the enemy.
* Long ago, Ben Graham taught me that "Price is what you pay; value is what you get." Whether we're talking about socks or stocks, I like buying quality merchandise when it is marked down.
* Some years back our competitors were known as "leveraged-buyout operators." But LBO became a bad name. So in Orwellian fashion,the buyout firms decided to change their moniker. What they did not change, though, were the essential ingredients of their previous operations, including their cherished fee structures and love of leverage. Their new label became "private equity".
* General Re ... is the only reinsurer that is backed by an AAA corporation. Ben Franklin once said, "It's difficult for an empty sack to stand upright." That's no worry for General Re clients.
Putting people into homes, though a desirable goal, shouldn't be our country's primary objective. Keeping them in their homes should be the ambition.
By year end 2007, the half dozen or so companies that had been the major players in this [tax-exempt bond] business had all fallen into big trouble. The cause of their problems was captured long ago by Mae West: "I was Snow White, but I drifted."
* If merely looking up past financial data would tell you what the future holds, the Forbes 400 would consist of librarians.
* Investors should be skeptical of history-based models. Constructed by a nerdy-sounding priesthood using esoteric terms such as beta, gamma, sigma and the like, these models tend to look impressive.
Too often, though, investors forget to examine the assumptions behind the symbols. Our advice: Beware of geeks bearing formulas.
* During 2008, I spent $244 million for shares of two Irish banks that appeared cheap to me. At year end we wrote these holdings down to market: $27 million, for an 89% loss. Since then, the two stocks have declined even further. The tennis crowd would call my mistakes "unforced errors."
* I have pledged - to you, the rating agencies and myself - to always run Berkshire with more than ample cash. We never want to count on the kindness of strangers in order to meet tomorrow's obligations. When forced to choose, I will not trade even a night's sleep for the chance of extra profits.
* When the financial history of this decade is written, it will surely speak of the Internet bubble of the late 1990s and the housing bubble of the early 2000s. But the U.S. Treasury bond bubble of late 2008 may be regarded as almost equally extraordinary.
* Beware the investment activity that produces applause; the great moves are usually greeted by yawns.
When I read the pages of "disclosure" in 10-Ks of companies that are entangled with these instruments [derivatives], all I end up knowing is that I don't know what is going on in their portfolios (and then I reach for some aspirin).
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Buffett said he paid a 16.5 percent tax rate on all his income because the tax rate on investment dividends and long-term capital gains is only 15 percent.
By contrast, a single employee at Buffett’s firm, Berkshire Hathaway, who earns between $33,000 and $83,000 must pay a 25 percent federal income tax rate.
* During 2008, I spent $244 million for shares of two Irish banks that appeared cheap to me. At year end we wrote these holdings down to market: $27 million, for an 89% loss. Since then, the two stocks have declined even further. The tennis crowd would call my mistakes "unforced errors."
* I have pledged - to you, the rating agencies and myself - to always run Berkshire with more than ample cash. We never want to count on the kindness of strangers in order to meet tomorrow's obligations. When forced to choose, I will not trade even a night's sleep for the chance of extra profits.
* When the financial history of this decade is written, it will surely speak of the Internet bubble of the late 1990s and the housing bubble of the early 2000s. But the U.S. Treasury bond bubble of late 2008 may be regarded as almost equally extraordinary.
* Beware the investment activity that produces applause; the great moves are usually greeted by yawns.
When I read the pages of "disclosure" in 10-Ks of companies that are entangled with these instruments [derivatives], all I end up knowing is that I don't know what is going on in their portfolios (and then I reach for some aspirin).
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Buffett said he paid a 16.5 percent tax rate on all his income because the tax rate on investment dividends and long-term capital gains is only 15 percent.
By contrast, a single employee at Buffett’s firm, Berkshire Hathaway, who earns between $33,000 and $83,000 must pay a 25 percent federal income tax rate.
SRIMAN Buffett's pon mozigal are great, how to invest in STOCK !!! , we salaried people in India end up paying taxes as high as 35%,
ReplyDeletedoing business is specific to the individual,
then SRIMAN is not seeman !!!