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Warren Buffet and value investing

Filed in archive Global Economy by tj on April 28, 2008

Warren Buffet and value investing
I have been spending the last 6 weeks with book after book about value investing and it seems I have caught the value bug. I admit I'm a little late to this party (Ben Graham 'invented' Value Investing back in the 30s) and many investors have been making their luck over the years.

Roger Lowensteins book about Warren Buffet paints a great picture about the most successful investor of modern times. Just to make sure if you have not heard it but Warren Buffet transformed $10k of his self earned money when in his late teens into the 52 billion + nowadays. All this just be the help of compounding interest. Warren never issued Junk Bonds or engaged in 'green mailing' companies. He achieved all this with an investing frame work he found and 50 years ago and while refining it over the years stuck to it forever. He even says many of his investments he makes forever. While this sounds foolish in the beginning after reading through this book you will understand the philosophy and why Warren was able to find such cash generating jewel over and over again over such a long time period.

There are many investors who have adjusted the value approach to other sectors/ industries or situations of companies (i.e. turn-around or even IPOs) but Warren has managed to bring in 22% of portfolio growth on average with hardly any year looing money managing nearly 100 billion now. All this with a head quarter of a dozen or less people, sitting in his chair in Omaha, NE using no tools beside a phone and a mail box.

It sounds too special and too good to be true but when you dive into the world of value investing the interesting point is that less is more. Less (but focused) information extracted from the daily noise is actually what counts.

If you are an open-minded and serious investor give the many books about Value Investing a try - they will surprise you and help to shuffle your picture of the world. That's what they did for me.






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Tags: value  investing  warren  buffet  2007  value+investing  warren+buffet  buffet+value 

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