A variety of opportunities exist in China the next day
held in the face of the annual global press conference a reporter, Buffett deliberately walked in front of the economic half-hour news, showed reporters his brand of wearing the suit, and specifically pointed out that this is a local clothing brand from China, this kind of behavior, so that the people have felt, Buffett more and more attention to China.
Reporter: China's economy is staggering growth rate of world Bank or even the Chinese growth this year is expected to increase to 9.5%, do you think the Chinese market, the existence of the Chinese economy overheating?
Buffett: I do not understand the market, but I think the Chinese economy over time will be high speed. it does not mean every month, every year increase, because the middle will encounter obstacles. Nothing is perfect. But think about what happened in China over the past two decades, the good things, like to the number of development to know that this will not stop, the economy will continue to grow. However, there may be a bad situation, or a few years the economy is not very good, all economies there have been such a problem, but that will be 10 years from now or 20 years time.
Buffett confident of China's economic development, but at the end of April, in China's economic growth ranks first in the world, Europe, Japan and the stock market in 18-month high circumstances, the Chinese stock market has suffered oscillation frequency, stock all the way down, bottom in the global stock market performance, which makes Chinese investors confused.
Reporter: say the stock market is a barometer of the economy, but now you see the Chinese stock market are very depressed, how do you view China's stock market performance and economic development of the deviation?
Buffett: The stock market and the economy is not closely linked at all times, but if the economy is in a very long time all the better, then the stock market also in a very long period of time within the well. If the economy is not good, then the stock market will also not very good. but specific for each week, every month I am not so concerned about change, if the economy is good, the last stock market will get better . I do not know what the market next year or the next two years, how. I do not want to be known as the Chinese stock market expert, I do not understand the Chinese stock market.
(in topics about China, Buffett admitted, Whether the stock market or real estate, he did not know the details of the Chinese market)
Reporter: Are you so bullish on China, valued in the end what is it?
Buffett: I think China has a variety of opportunities for economic growth environment, you look at every place, can find opportunities, we have invested in the automotive company, BYD, and their car market in China is developing very rapidly, but there will be growth in all areas .
(opportunities, Buffett praised China, the most used word. In Buffett's view, whether it is a system, or an interactive relationship, as long as the opportunity to produce as much as possible to lay the basis of wealth creation, which also includes China-US trade relations.)
Buffett: great powers taking into account its national interests may often produce friction. but if beneficial to China, is also advantageous when the United States, we co-operate. The world is not a
Buffett confident of China's economic development, but at the end of April, in China's economic growth ranks first in the world, Europe, Japan and the stock market in 18-month high in the circumstances, the Chinese stock market has suffered oscillation frequency, stock all the way down, bottom in the global stock market performance, which makes Chinese investors confused.
Reporter: If you come to evaluate their own performance last year, out of 10, then you give the decision you have made last year, and implementation how many points to play the situation?
Buffett: If you really allow shareholders to score, this score should be good, Berkshire Hathaway in 2009, has withstood the test of the financial crisis, most businesses are a gain. However, if enough shareholders scoring critical, he might note the fact that Berkshire Hathaway shares rose 19.8%, 26.5% behind the S & P 500 Index increase, which is the company since 1965 7th since underperformed the broader market.
Reporter: This is the value of the company by adhering to the investment philosophy is a challenge?
Buffett: I'm not very worried. there are so few of our stock years more than the entire market, there are so few is not good. If the whole, there are 15-20 years we are better than the big city, then our job is good.
(vertical View Warren Buffett's investment performance characteristics of Berkshire's earnings is a good few years in the market to lag behind the market average, but in the event of significant economic oscillations, Berkshire must be substantially more than the market average.)
Buffett: Value investing is now functioning pretty well, apparently the operation of the operation of large sums of money than the small amount of money work better, my job is to do well in the long period of time, As I said, if I am within in the long run, can not do, then they should find other people to take this seat.
very optimistic about the Chinese market
Buffett Warren Buffett says he can win because Luckily, born in the United States, by a good education, and the U.S. GDP has been growing, the United States to his creation of the huge economy. But now he felt the Chinese people very, very fortunate, for they are living in a very fast growing countries And there is great potential in this country, and now China is found in the world, the world is found in China, as long as this potential can become reality, China's future will be incredible. Warren Buffett guaranteed a few years, China must be the world gains the most.
Buffett value investing principles:
1, the method used to buy companies to buy shares. This is the core of Buffett's investment philosophy, although Buffett's investment in securities with a single that won the the throne of the world's richest man may, in fact Buffett is a His understanding of business through various channels, business operations (products and services, labor relations, raw material costs, plant equipment, capital reinvestment requirements, inventory, accounts receivable, working capital requirements, etc.), never on the market on attention ;
2, the risk from you do not know what they are doing;
3, passion is the driving force of success, honesty is the basic condition for success, should have the courage to admit its mistakes;
4, not to disclose his trade secrets;
5, the future is always do not understand;
6, long-term investment. in a good price right time to buy stocks, as long as these companies to maintain good performance, do not send them to put out. < br> 7, to maintain the margin of safety, to prevent loss. safety first, when the price is far below the intrinsic value of business investment, and market trends that will rise again.
8, good at learning, standing on the shoulders of giants.
9, to be a successful and happy investors;
10, bear market investment opportunities. the market is often more jump off the bear market that often appear in large undervalued companies, it is rare investment opportunities.
11, once it determines that substantial investment to continue, like quantity. (modern portfolio theory is mainly based on Magnus Markowitz, William Sharpe and others based on the model, the use of mathematical methods to measure with covariance risk, to seek balance between risks and benefits to meet investors of risk and return preferences.)
12, paranoid investment. Do not follow the flock to go, according to the will of their own work independently. establish a correct concept of investment, and then stick to it, look for a target dry in the end.
13, the choice of investment companies:
�� focus on the corporate liquidation value, earnings growth and other indicators to quantify the investment value of the stock. according to the analysis of Graham Greene, find out the real value of the degree higher than the market value of the stock
�� high gross profit margin of companies;
�� Enterprise is simple and easy to understand;
�� stable history;
�� optimistic about the long-term development;
�� create profits for shareholders;
�� physical assets, business assets =
�� 10 + years of information assets compound rate of return> 15%;
�� have sound management, financial quality, long-term bullish 100% stake in the enterprise;
�� yourself away from the general lack of confidence in the management of commercial enterprises, and;
�� management of the Company to be rational, honest, do not blindly follow institutional.
�� business management excellence and honesty. there is no leadership excellence and frankly there will be a valuable business
�� only important factor is the company's profitability. has investment value should be a steady stream of future cash receipts to the company.
�� investment has the exclusive right and franchise businesses. Fisher taught Buffett exclusive rights on the consumer (with consumer demand, no similar alternative products, from legal norms) of the stock selection method, according to Fisher's logic, choose to have a high reputation in the market dominance is the Select the value of Buffett's investment in stocks with growth. such as investment Coca-Cola, The Washington Post.
�� required rate of return used in the 30-year long-term U.S. government bond rate.
�� not vote do not understand, there are problems not vote. precisely because Buffett high-tech companies do not understand (because most companies can not quantify the value of analysis), which he successfully survived the Internet bubble in 2000. is unknown because of the secondary housing, Lane Buffett real estate mortgage bonds (in fact, the real estate mortgage bonds by several Wall Street's so-called genius, packaging, and even genius are dizzy, simply could not understand how much leverage in the end), so he clears all of the relevant early bonds. < br> �� focus on return on equity (operating earnings / equity). In the calculation of operating surplus, securities should be measured at cost, the investor must be able to control that affect the operating surplus of unusual factors.
14, six types of enterprises:
�� development of slow, some large old companies, do not buy;
�� rapidly progressive, small-scale, energy intensity, the annual growth of 20-25% of the enterprises, buy;
�� steady moderate type, an increase of 20-25% of large enterprises to buy;
�� cycle of ups and downs type, influenced by economic cycles, such as automotive, aviation, steel, chemicals, etc., to see the specific economic circumstances, may be buy;
�� possible recovery type, can be bought;
[6] assets concealed type, such as cash, real estate, land, patents, franchises, buying
timeless value investing s Pension Buffett's shareholders meeting in person at the time, heard his explanation of value investing is so: principle is the same. I had to spend 10 million dollars to buy 20 million shares, with 10 billion now spent, or even 100 billion to the acquisition of a business principle is the same as its standard has not changed. If the principle can be outdated That principle is also called what? a lot of people are going to buy when the market rally. This is called the value of the investment? the real value of the investment is to buy after the stock market crash, and I do-raised funds, Many public fund this growth, growth, including many retail investors are into 4000 points, 5000 points into the after. And this time, when the stock market rose quickly rose to the high point, I would have quit. > In fact, Buffett's shares are basically all the money to buy after the crash. After his first fall, 1973, 1974, the U.S. stock market fell by 40%, bought the Washington Post, 10 million into 13 billion. The second is probably the stock market crash of 1987, the day down 22.6%, he in 1988, Coca-Cola bought in 1989, bought a 1.3 billion profit on a stock in which 100 billion. third time is the U.S. network bubble, 2001,2002, the U.S. stock market fell by half. Buffett believes that the time when the stock market is very popular it is difficult to make money.
as a representative of value investing, Lee Chi is also adhere to the share price fell after the buy. He said: I also went to a sightseeing tour. fell 2,500 below the trap, and I slept very relieved, because I hold the doll in the hands of gold. in terms of his value for the price is right, he can buy, but do not have to wait until the price. Buffett's size, he bought, it is possible to buy other people will follow, so as a representation in terms of After the crash it may be cheap, but in fact the core of his concept of the real market value is looked at to buy.
Buffett principle in China's stock market specific applications:
1, used to buy business method to buy stocks. Forget stocks, forget the market, key points to look at the stock company, assuming you will buy the business entity. more attention to the business enterprises in the real market conditions, operating conditions and so on. (Note: This is the investment very different concepts) there are several permanent investment in shares of Warren Buffett, that life may have in stock. This shows that the intrinsic value of his focus on business, he simply ignored it, and the attitude index is consistent from top to bottom. < br> 2, ask your heart, your own business is the emperor's new clothes, or a solid source of profits;
3, enthusiasm, happiness, honesty is the necessary condition for success; Chinese investors are not happy most of the time , watching the market's fluctuations, there is little reason for joy.
4, investment plans to be confidential. This prevents someone else's criticism and shaken their confidence.
5, abandon the technical analysis. Technical analysis is a lie person's investment. Here clarify, is not to find a similar large-cap stocks to euphemistically called aim is to obtain corporate earnings growth. (including dividends and corporate earnings value added).
7, financial security first. because of their research in order to prevent mistakes, which led to stock selection error, the purchase price of the stock options and real price gap must be large enough.
8, adhere to the study. It should be noted, most successful investors have a deep understanding of investment theory of people such as Warren Buffett (Columbia University, Master of Economics), Soros ( London School of Economics, Master). but not yet been finalized for the understanding of the macroeconomic importance of blocking action is the use of Soros pound development of the EU macroeconomic imbalances.
9, bear market investment theory is relatively easy to understand, especially for the value investment, bear market paved with gold, as long as you have enough patience and vision;
10, ratio must not be desperate to prevent the accidental errors;
11, the core of value investing is to uphold and against the trend of psychological investment. Because most people are wrong, either sheep or class of sheep are wrong. This is the most critical, is also closely related and investment purposes. because the real purpose of investing in stocks is the investment industry, so do not ignore the market's ups and downs. buy can watch, and wait for the dividend and the market price of value-added, do not have to guess the stock changes daily and prices.
12, the real value of stock options:
�� valuation by discounted cash flow model, the necessary rate of return over a 10-year Treasury rate. Why should I choose as a risk-free interest rate required rate of return on investment is a hundred percent for the lowest income security and point of view. Of course, according to Buffett's investment experience, simply choose the correct rate of return will be far more than the necessary rate of return.
�� the use of financial index analysis, such as earnings, book value and so on. the choice of financial indicators to take into account all the unknown factors, such as asset inventory to be considered part of the turnover and liquidity.
�� select growth companies. only the net value of the stock and real the ratio of the value will still fall into operating difficulties. because very often you can not find the real value of the specific value is less than 50% of the shares. and even find such a stock, the company mostly is a sunset industry, future growth cause for concern. That is why , the introduction of the concept of growth, the valuation for the company's growth.
�� with exclusivity and concession business. that the white monopoly-type enterprises, such as brand monopoly, monopoly, monopoly and other products. Here to stress, Do not be swayed by short-term market bearish as Insurance with the provision of 157 million (in the future may reach 23.8 billion) of the impairment loss, if there is no investment in Ping An Insurance worth it? not. any business may be in the development of setbacks, the key essence of business can decide whether damage to corporate value.
�� be familiar with the stock, do not touch the issue shares, subject shares. here is familiar with the company familiar with the market performance of stock prices is not , because Buffett does not look nearly stock market performance. by doing a lot of homework, familiar with a company's business and specific situation.
�� other content easily understood with reference to the principles of Buffett, is no longer here interpretation;
fact, investments in securities with a core, is the valuation of securities. The reason Buffett different, not what he invented a new method of valuation, but the choice of a number of different real targets. If required rate of return, price-earnings ratio, return on shareholder returns and so on, determined the choice of these indicators is relatively high and low stock price changes, but also determines the choice of investment decisions, and finally determines the success or failure of the investment.
excellent Buffett eyes Investors should have?
you?
Buffett: I think they can replicate this comprehensive concept. I was a man named BenGraham people to learn. I read what he told me, very good book. I think the investment, the most important thing is not always stare at prices rose or fell, the price is around the turn, but to look at it is a business. If you know this one transaction, you think you are paying for this business capital, then you should buy the stock. If you do not think this business is good, then do not buy. people tell you the stock to rise or fall in the end amount to nothing. to like to buy a farm, to purchase an apartment, a house or something else you need to understand is that this asset, the whole business, and then decide you are not worth the money, if you think not worth it even if the.
Reporter: In addition to individual investors to buy shares, should also do?
Buffett: The best thing you have to do is to invest on your own. If you can improve your , you can change a lot. When I talk with students, facing the young man, I always encourage them to invest their skills. If they can learn more and to better communicate, no matter how the future, no one take away from you these skills, inflation can not, no one can! you will have a better capital, so the best investment that you do run out all the stops for their investment.
Reporter: So, a good investor, you need to do with what kind of quality?
Buffett: I think we can learn to analyze a company, there are potential quality, both are important, some people are gifted in certain areas, But you can still learn a lot of things, you must control your emotions, if you are an emotional investor must be the failure of investors.
(for investors to follow their own, Buffett is willing to share of his investment philosophy, but he also hopes to television, to tell all investors, do not blindly follow anyone, including himself.)
Buffett: to have the ability to think logically, which is the same for others truth. so I do not care how others evaluate investment, I only care about the transaction itself, I try to understand, I try to think about this single transaction in 10 to 20 years will look like, as well as its expectations, if I feel good, and the attractive price, I'll buy it.
Reporter: What to buy you a stock price will soar, your investment in our oil and BYD frenzy when they saw this, how do you view your own this influence you? Buffett: I just bought a period of time I think the stock will appreciate, if no one knows what we buy, that's pretty good for me. I do not worry I am on the stock market influential, no one will buy what we buy stock which stock away to follow suit, they should choose the value that they believe the stock a good investment.
Reporter: But you do have influence on the stock market too. < br> Warren Buffett: I hope I do not have such influence.
(in the meeting with Warren Buffett, the exchange process, a reporter for China Buffett can feel the confidence and enthusiasm.) < br> Warren Buffett: But I bet the Chinese economy in the next ten or twenty years will be very good, I view the U.S. economy, too, I think China's economic growth will be faster, because its relatively low starting point But I think there will be a lot of good things will happen in China.
Fighting The stock market does not leave you defeat Huiyanshizhu
investment by Buffett's easy to understand the business
10 years of preparation, so even the ten minutes have not held such stock, Buffett's Berkshire. Hathaway 32 years of annual investment performance and the American Standard - Poor's 500 stock price index than the performance can be found in one of the 29 years Buffett beat the index, only three years behind index, which is more commendable is that five years into a bear trend when the U.S. stock market retreated on the occasion, Buffett was a record year 23 billion U.S. dollars of wealth, the stock selection method is also well worth studying global investors.
is modeled after Warren Buffett's stock picking master the basic school. Graham (Ben Graham) and Philip. Fisher (Philip Fisher). The first is a (Margin Of Safety) of prudent investment concepts, in his view, the end of the real value of the stock value Intrinsic value), namely, the existence of such stock , regardless of the market's performance. Because of his contribution to the quantitative analysis, has been recognized for his later father of financial analysis. Graham, > Fisher is advocating investment growth rate is higher than average, relative growth and has excellent profit management company. He and Graham, the biggest difference is that Fisher simply read the Company's financial report that is not sufficient to determine Should investment, and as far as possible from people familiar with the company to obtain first-hand information, this way the fund manager has become a prerequisite before picking. Buffett sucked the two investment approaches to be carried forward.
the end of 1996, Buffett's investment portfolio (Table omitted) illustrate, the market value of which accounted for eight major Berkshire holdings. Hathaway shares to the market value of $ 27,750,000,000 87% If such stock by the end of 1996 this rate of return be calculated so far, in 14-month portfolio return and further rose to 37.72%.
focused niche moving steadily
Buffett held the eight observed stocks, almost every stock is a household name the world's leading companies, including Coca-Cola is the world's largest beverage company, Gillette is to facilitate the razor 60% share of the global market, the American Express Card and American Express Bank traveler's checks are an essential tool for cross-border travel, Wells Fargo has the largest commercial real estate markets in California and among the top ten banks in the United States, the Federal Home Loan Mortgage Corporation are the two major U.S. home loan industry, one of Disney in the acquisition of large city / ABC after to become the world's largest communication and entertainment companies, McDonald's is also the world's largest fast-food industry, the Washington Post is one of America's most respected newspaper, far higher than the profitability of the industry .
of the common characteristics of these enterprises is that every company have a strong market niche, Buffett has made these companies have so-called ; commodities products, but consumers will still be across the street to find such products. and advantages of this product in the foreseeable future are very difficult to change, and this is his br> More importantly, companies such as Warren Buffett's business prospects for this very , because in too many cases the number of companies, the manager can not reach the operating conditions of each company, the results part of the funds actually increased the risk of loss.
sharp rise in the recent years, many high-tech stocks, Buffett also admitted because he can not know more about this industry, so he risk investment, as br> buy and overweight:
According to 5,605,314 shares 2. Waste management company Republic Services: buy 2,537,200 shares 3. Document and information management company Iron Mountain: buying 794,800 shares 4. surgical products maker Becton Dickinson: to buy 244,128 shares of
reduction:
It MarketWatch reported that Buffett holdings of the first quarter of Kraft Foods (Kraft Foods Inc.), Johnson & Johnson (Johnson & Johnson) and Procter & Gamble Company (Procter & Gamble Co.) shares.
submitted according to Monday U.S. securities regulators of the documents show, Buffett's holding company sold 23% stake in Kraft Foods, he was accused of Kraft in the acquisition of Cadbury (Cadbury PLC) when the bid is too high.
Berkshire . Hathaway also sold a health care company UnitedHealth Group Inc. and the health insurance giant Wellpoint Inc.'s position, which is caught in a public relations crisis and a new general meeting convened blamed. Meanwhile, Warren Buffett also sold the company for all SunTrust Bank (SunTrust Banks Inc.) equity, and sell a small amount of Travelers Cos.'s shares.
In addition, during the same period the stock holdings of Berkshire. Hathaway completed 270 billion acquisition of Burlington Northern Santa Fe Railway Company railroad transportation companies (Burlington Northern Santa Fe.) transactions. It is reported that Buffett also sold 80 billion in debt, and used to sell part of portfolio transactions for the financing of this railway .
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