Comments on: Chart of the day: Warren Buffett’s bolt-ons http://blogs.reuters.com/felix-salmon/2012/02/26/chart-of-the-day-warren-buffetts-bolt-ons/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: EllieK http://blogs.reuters.com/felix-salmon/2012/02/26/chart-of-the-day-warren-buffetts-bolt-ons/comment-page-1/#comment-36542 Mon, 05 Mar 2012 17:45:15 +0000 http://blogs.reuters.com/felix-salmon/?p=12267#comment-36542 Sorry, one more thing I forgot to mention.

Felix: Thank you for this write-up. I appreciate the fact that you provided in-line links to each PDF you cited, the B-H annual shareholder updates. I would not have had the opportunity to access those otherwise. Well, not easily. (David’s comment made me remember to mind my manners better).

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By: EllieK http://blogs.reuters.com/felix-salmon/2012/02/26/chart-of-the-day-warren-buffetts-bolt-ons/comment-page-1/#comment-36540 Mon, 05 Mar 2012 17:40:31 +0000 http://blogs.reuters.com/felix-salmon/?p=12267#comment-36540 TomGrey: I like that expression, “cigar butt” companies! It is so descriptive, and funny too. Warren Buffet is amazing in that he has been so successful, for so long, earning extraordinary returns without help from HFT or computationally-intensive style quantitative finance. I used to wonder if he were an alien (not the immigrant variety!) as he seems to defy everything I’ve learned and observed, by virtue of his consistency over a span of decades.

Another savvy discoverer of “cigar butt” and non-glamorous, small-cap value stocks is Mario Gabelli. One of his mutual funds in particular earns positive returns year in and year out. (No, I don’t believe that Warren Buffet AND Mario Gabelli are aliens, from the same planet!)

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By: cnhedge http://blogs.reuters.com/felix-salmon/2012/02/26/chart-of-the-day-warren-buffetts-bolt-ons/comment-page-1/#comment-36430 Thu, 01 Mar 2012 08:34:34 +0000 http://blogs.reuters.com/felix-salmon/?p=12267#comment-36430 nicely done. Buffett did make some very good catch-ons with his goldman investment.

http://www.jinrongbaike.com/
http://www.cnhedge.com/

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By: DavidMerkel http://blogs.reuters.com/felix-salmon/2012/02/26/chart-of-the-day-warren-buffetts-bolt-ons/comment-page-1/#comment-36409 Wed, 29 Feb 2012 12:24:41 +0000 http://blogs.reuters.com/felix-salmon/?p=12267#comment-36409 Hi Felix, here are my comments:

http://alephblog.com/2012/02/29/notes-on -the-2011-berkshire-hathaway-annual-repo rt-part-3-on-acquisitions/

Really appreciated your article here, as I do with most of what you write.

David

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By: TomGrey http://blogs.reuters.com/felix-salmon/2012/02/26/chart-of-the-day-warren-buffetts-bolt-ons/comment-page-1/#comment-36407 Wed, 29 Feb 2012 10:32:46 +0000 http://blogs.reuters.com/felix-salmon/?p=12267#comment-36407 In the 70s, there was a Value Line set of stock picks which, like Buffett, often included “cigar butt” type companies (buy when below-book value low, sell when they go back up; cigar butt from The Snowball, his bio). It was a LOT of work to look at hundreds of companies and keep the numbers straight, or take enough notes to do so.

Buffett was able, and very very willing, to read a ton of financial statements and keep it all in his head — a HUGE advantage over most others.

Today, far more folks are trying to copy that idea, with computer help, meaning far fewer “good buys” are in the market and remain available. The Market in the 70s was less efficient than it has become in the 00s (tho still not fully meeting the Efficient Market Theory).

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By: EllieK http://blogs.reuters.com/felix-salmon/2012/02/26/chart-of-the-day-warren-buffetts-bolt-ons/comment-page-1/#comment-36340 Sun, 26 Feb 2012 23:15:00 +0000 http://blogs.reuters.com/felix-salmon/?p=12267#comment-36340 It’s difficult to draw conclusions from that yearly historical return comparison chart. Perhaps Berkshire Hathaway performed well during the 1970’s and some of the 1980’s because the U.S. economy in general was enjoying a lot of growth and expansion? Or not: We were transitioning from a manufacturing-based economy to services. It is complicated.

Also, it wasn’t clear (to me) what Buffet meant in the 2010 calendar year letter to shareholders, regarding his itchy trigger finger and the need to maintain a brisk pace of acquisitions. In the preceding sentence, he said that it was relevant to the non-insurance segments of Berkshire. Of the four “sub-groups”, insurance is by far the largest and strongest, according to Warren Buffet. But the wording in that paragraph wasn’t exactly cut-and-dried, about insurance and non-insurance, so Felix’s conjecture is just as likely as not.

Finally, I find it a little sad that Buffet has become so fond of “bolt-on” and “tuck-in” terminology. I don’t see a good reason for that, as it makes things more confusing. Warren Buffet of all people, is supposed to be a plain dealer, nice and straightforward. I complain about N. Taleb creating his own financial nomenclature, that it mostly serves the greater glory of N. Taleb rather than public understanding. But N. Taleb is describing new concepts e.g. anti-fragility. He’s an academician, they’re supposed to be creative. Even more relevant: Aunt Sara and her peers haven’t entrusted their life savings to Taleb, whereas they have done so with Berkshire Hathaway. So why does Buffet use these non-standard, sort of obfuscating terms?

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By: Sechel http://blogs.reuters.com/felix-salmon/2012/02/26/chart-of-the-day-warren-buffetts-bolt-ons/comment-page-1/#comment-36339 Sun, 26 Feb 2012 20:33:05 +0000 http://blogs.reuters.com/felix-salmon/?p=12267#comment-36339 Buffett’s been at this a long time. He’s made a large number of acquisitions. I cannot believe there aren’t a few lemons or under-performers in his portfolio. When investors get knighted, they’re above being questioned. This isn’t to detract from some of his quality writing or his successful spotting of good opportunities, but it’s not always as it seems, and lately a great many of his investments could arguably be the result of his government connections more than pure investing acumen.

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