Is Warren Buffett a stock picker?
“Warren Buffett was generally considered the greatest stock picker of all time.
Buffett returned to Omaha and worked as a stockbroker while taking a Dale Carnegie public speaking course. Using what he learned, he felt confident enough to teach an "Investment Principles" night class at the University of Nebraska-Omaha. The average age of his students was more than twice his own.
What is Warren Buffett's Investing Style? Warren Buffett is a famous proponent of value investing. Warren Buffett's investment style is to “buy ably-managed businesses, in whole or in part, that possess favorable economic characteristics.” We also look at his investment history and portfolio.
| Company | Shares held | Percent of portfolio |
|---|---|---|
| American Express (AXP) | 151,610,700 | 8.18% |
| Coca-Cola (KO) | 400,000,000 | 6.79% |
| Chevron (CVX) | 126,093,326 | 5.41% |
| Occidental Petroleum (OXY) | 248,103,025 | 4.06% |
Buffett is also uninterested in gold. In his 2011 letter to shareholders, he noted that gold has two significant shortcomings, “being neither of much use nor procreative.” “If you own one ounce of gold for an eternity, you will still own one ounce at its end.
Key Takeaways
In picking stocks, Warren Buffett looks for companies that have provided a good return on equity over many years, particularly when compared to rival companies in the same industry. Buffett also reviews a company's profit margins to ensure they are healthy and growing.
Email or write to Warren Buffet at Berkshire Hathaway, Inc. for large investment requests that meet his published criteria. Email, call, or write to Warren Buffet at the Bill and Melinda Gates Foundation for charitable requests.
Warren Buffet's 2013 letter explains the 90/10 rule—put 90% of assets in S&P 500 index funds and the other 10% in short-term government bonds.
Lowenstein traces Warren's life from his birth in Omaha, Nebraska in 1930 to his first stock purchase at age 11, and from his study of the securities profession under Columbia University's legendary Benjamin Graham to his founding of the Buffett Partnership at age 25.
- Invest within your circle of competence.
- Think like a business owner when buying equities.
- Buy at inexpensive prices to provide a margin of safety.
What stocks does Nancy Pelosi invest in?
- Nvidia Corp. (ticker: NVDA)
- Apple Inc. (AAPL)
- Microsoft Corp. (MSFT)
- Alphabet Inc. (GOOG, GOOGL)
- Tesla Inc. (TSLA)
- AllianceBernstein Holding LP (AB)
- Walt Disney Co. (DIS)
- PayPal Holdings Inc. (PYPL)
| Ticker | Company | % Portfolio |
|---|---|---|
| MSFT | Microsoft Corp. | 33.98% |
| BRK.B | Berkshire Hathaway Inc. | 16.80% |
| CNI | Canadian National Railway Co. | 16.29% |
| WM | Waste Management Inc. | 14.92% |
By all accounts, Buffett lives a frugal and simple lifestyle, and as such chooses to drive a 2014 Cadillac XTS.
A 70/30 portfolio is an investment portfolio where 70% of investment capital is allocated to stocks and 30% to fixed-income securities, primarily bonds.
The rule's origin is reported as advice given by Buffet to his personal pilot, Mike Flint. Flint asked Buffet for career advice, leading to Buffet thinking of the 5/25 rule. Buffet asked Flint to list his top 25 career goals, pick the top five, and avoid the rest until the top five are achieved.
Indeed, the Oracle of Omaha has said that he spends “five or six hours a day” reading books and newspapers. And while it may be difficult to set aside nearly a full work day's worth of hours to read, it recently got a little bit easier to consume information like Warren Buffett.
- Podcast Discussion: Warren Buffett's 4 Rules to Investing.
- Rule 1: Vigilant Leadership.
- Rule 2: Long-Term Prospects.
- Rule 3: Company Stability and Understanding.
- Rule 4: Understanding Intrinsic Value.
Ten Year Stock Price Total Return for Berkshire Hathaway is calculated as follows: Last Close Price [ 418.62 ] / Adj Prior Close Price [ 123.13 ] (-) 1 (=) Total Return [ 240.0% ] Prior price dividend adjustment factor is 1.00.
What Berkshire is currently doing with its cash hoard. In the near term, Buffett appears content with holding the majority of Berkshire's cash in Treasury bills -- a short-term security backed by the U.S. Treasury Department with a maturity of one year or less.
Buffett insists on always keeping a minimum of $30 billion in cash reserves, so the actual spending power is about $127 billion.
Where does Warren Buffett give his money?
Buffett is one of the world's most generous philanthropists.
He pledged in 2006 to donate about 85% of his Berkshire Class A shares to five foundations: the Bill & Melinda Gates Foundation, the Susan Thompson Buffett Foundation (named after his late wife), and three foundations run by his three children.
Since 2006, he has donated over $50 billion—a figure that exceeds his net worth when he began giving away his holdings 17 years ago. Buffett has long been clear that he wants to give away his billions of dollars.
Buffett's Two Lists is a productivity, prioritisation and focusing approach where you write down your top 25 goals; circle your 5 highest priorities; then focus on those 5 while 'avoiding at all costs' doing anything on the remaining 20.
“One bequest provides that cash will be delivered to a trustee for my wife's benefit,” he wrote. “My advice to the trustee could not be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund.” Buffett recommended using Vanguard's S&P 500 index fund.
Experts with the Motley Fool suggest allocating an even higher percentage to stocks until at least age 50 since 50-year-olds still have more than a decade until retirement to ride out any market volatility.
