I liked HBO's documentary on him, "Becoming Warren Buffett", https://www.youtube.com/watch?v=70nGRBvqFNw
Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]
71–80 of 324 posts
Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]
#72Earlier quoted context omitted.
No, he isn't reading it incorrectly. Buffett is claiming that on aggregate, because of the fees, the passive investors will be better off than the active investors. From page 23: A lot of very smart people set out to do better than average in securities markets. Call them active investors. Their opposites, passive investors, will by definition do about average. In aggregate their positions will more or less approxima…
Yes, but Buffett is not claiming that active investing (as opposed to passive index investing) is negative-sum in aggregate! That would be ludicrous, because Buffett is an active investor himself and the Buffett Annual Report is a long form sales letter to persuade people to buy more Berkshire shares.
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Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]
#73Earlier quoted context omitted.
Of the average 86 year old male, you mean. I think he wouldn't bat an eye on getting the best personal health care on the face of the planet (it's also an important long-term goal for him.) He wouldn't overpay for it, either.
Warren Buffet is not health freak. He enjoys life and according to his own words is "one quarter Coca-Cola" >"If I eat 2700 calories a day, a quarter of that is Coca-Cola. I drink at least five 12-ounce servings. I do it everyday." Really funny: >Asked to explain the high-sugar, high-salt diet that has somehow enabled him to remain seemingly healthy, Buffett replies: "I checked the actuarial tables, and the lowest de…
>"If I eat 2700 calories a day, a quarter of that is Coca-Cola. I drink at least five 12-ounce servings. I do it everyday."
What do you expect? ;) "Warren Buffett, who through Berkshire Hathaway (BRK.A) (BRK.B) owns about 9.3% of Coca-Cola's (KO) outstanding shares"
Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]
#74There's one particular passage I'd like to point out, on page 5: Our efforts to materially increase the normalized earnings of Berkshire will be aided – as they have been throughout our managerial tenure – by America’s economic dynamism. One word sums up our country’s achievements: miraculous. From a standing start 240 years ago – a span of time less than triple my days on earth – Americans have combined human ingenu…
they all represent a net gain for Americans from the barren lands, primitive structures and meager output of 1776. Starting from scratch, America has amassed wealth totaling $90 trillion. This was a gain that was achieved not by starting from scratch but by stealing lands from indigenous people and forcing Africans to work that land. I'm not sure if you can describe the kidnapping, murder, rape and ultimately genocid…
Yes, we took land from indigenous peoples, and enslaved Africans. And yes we did awful things.
But isn't it obvious that neither of these things created the wealth we have today? To my thinking, our current wealth derives from technological innovation, process engineering, psychological insight, most of which would not have been possible without welcoming people from other lands, and being willing to work with those who are different than we are.
Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]
#75Earlier quoted context omitted.
You are probably getting downvoted because it seems unlikely that a multiple of GDP had to anything to do with Mr. Buffets analysis of American Wealth. https://en.wikipedia.org/wiki/Wealth_in_the_United_States
I think my metric is fine. The link you just quoted says "Including human capital such as skills, the United Nations estimated the total wealth of the United States in 2008 to be $118 trillion" - up to you if it's higher or lower 8 years later. His estimation is still low. Anyway value is not usually priced in terms of wealth, though - but on the future.
"U.S. household and non-profit organization net worth rose from $44.2 trillion in Q1 2000 to a pre-recession peak of $67.7 trillion in Q3 2007. It then fell $13.1 trillion to $54.6 trillion in Q1 2009 due to the subprime mortgage crisis. It then recovered, rising consistently to $86.8 trillion by Q4 2015"
Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]
#76Earlier quoted context omitted.
Not only do you get on average better returns, you can do better even when they perform poorly since those funds (in Canada) can charge you anywhere from 1.5% to 3% of your portfolio in fees (MER), while an index fund could charge as low as 0.1%. https://www.wealthsimple.com/ (I'm a customer) has recently expanded into the US from Canada and are one of a group of what is being called Roboinvestors which take these in…
0.64% MER is much higher than what you can get with Vanguard. Mutual funds are about 4x less expensive, some ETFs are 10x less expensive.
My personal view of using Wealthsimple is a stepping stone, I've realise that I've throw away money to the banks with higher then needed MERs and Wealthsimple provide a easy way of transferring my money in and saving money now. When my portfolio is larger and I'm seeing a higher cost with them VS doing it myself I'll look into buying ETFs myself.
The lowest bank mutual fund in Canada that I've seen in from Tangerine at ~1% MER, are there ones lower?
Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]
#77Earlier quoted context omitted.
The areas that used slaves the most are now some of the poorest areas of the USA. Maybe slavery didn't have that big of an impact?
While it's true that there is a bit of incumbent/disruption element involved - the American south was probably the most advanced agricultural civilization ever, while the north invested heavily in the very disruptive industrial revolution - I'd say having broad swaths of their entire society burnt to the ground and then effectively confiscated by Northerners has much more to do with any present-day economic troubles.…
> the [antebellum] American south was probably the most advanced agriculture civilization ever
I don't follow. Certainly the current farming system in the American mid-west is orders of magnitude more productive. But even if we're focussed on pre-industrial history, are you sure that the ancient South American agri-economies weren't better? And for productive land use, what about Japan and south-east Asia, where every square inch ran like clockwork.
Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]
#78Earlier quoted context omitted.
The areas that used slaves the most are now some of the poorest areas of the USA. Maybe slavery didn't have that big of an impact?
While it's true that there is a bit of incumbent/disruption element involved - the American south was probably the most advanced agricultural civilization ever, while the north invested heavily in the very disruptive industrial revolution - I'd say having broad swaths of their entire society burnt to the ground and then effectively confiscated by Northerners has much more to do with any present-day economic troubles.…
I'd like to see a citation for that. Everything that I've read up to an undergraduate level implied that their farming methods were less than ideal, even by the standards of the day, and that in many ways prime land had been exhausted.
Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]
#79Earlier quoted context omitted.
I would argue that index funds make the most sense for most millionaires these days, too. For the most part, if a hedge fund is actually worth investing in (and there are quite a few), only institutions will have the capital to play.
> if a hedge fund is actually worth investing in (and there are quite a few) Apparently it is hard to come up with a collection of 5 of them that would beat the S&P 500 over 10 years. At least Buffett had a hard time finding counterparties for a bet.
Renaissance Technologies claims 71% annualised from 1994 to 2014.
Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]
#80There's one particular passage I'd like to point out, on page 5: Our efforts to materially increase the normalized earnings of Berkshire will be aided – as they have been throughout our managerial tenure – by America’s economic dynamism. One word sums up our country’s achievements: miraculous. From a standing start 240 years ago – a span of time less than triple my days on earth – Americans have combined human ingenu…
they all represent a net gain for Americans from the barren lands, primitive structures and meager output of 1776. Starting from scratch, America has amassed wealth totaling $90 trillion. This was a gain that was achieved not by starting from scratch but by stealing lands from indigenous people and forcing Africans to work that land. I'm not sure if you can describe the kidnapping, murder, rape and ultimately genocid…
I'm not an economist, but as a student of history it seems America's dominance stems from being an arms dealer to Europe during both world wars, not getting its infrastructure razed to the ground in the process, and being both the bank and the builder for the resulting recovery.
It also doesn't hurt that the allies gave the US its best technological secrets during the war and the best minds from both sides emigrated to the US during and after the war.