This Is Why Warren Buffett Is The Best Investor Of All Time

Ok, I have to read more history before saying Warren Buffett is the best of all time. But my limited historical knowledge says he is the best as far as I can tell. If you want to check out why he is one of the best ever, check out the following chart:



This is the chart of Washington Post (WPO). Whenever best performing stocks are mentioned, investors rarely ever seem to mention a media company like this. Buffett bought WPO starting in 1974 and he never sold it. WPO went up more than 16,000% since the bottom in 1974--and that's without dividends!

The thing is, this isn't even his best investment of all time. That happens to be GEICO. If it weren't for the size bloat in the late 80's and 90's, I believe Buffett would have consistently found more companies like these. Too bad the large portfolio size reduced him to investing in large-cap companies and some unsexy, but successful, PIPE investments. Investing in Kraft these days seems like a joke compared to Buffett's investments during his prime.


And to think, the newspaper industry on its last legs... The paper that brought down one of the most powerful people at that time, Richard Nixon, might not even exist in 10 years... at least if the consensus is to be believed.

Comments

  1. AnonymousAugust 2, 2008 at 12:25 PM

    Just curious, how do you know that geico was the best investment over time? Are you getting this information from bigcharts.com. I have been looking around for a place to find long-term performance of companies over decades.

    hpmst3

    ReplyDelete
  2. Sivaram VAugust 2, 2008 at 12:57 PM

    You can't get a chart for GEICO since it was taken private. I'm basing what I said on what Warren Buffett said (I have to track down when he said it but he did say that Geico was his best investment of all time)...

    As for long term charts, bigcharts.com is the best one I could find.

    ReplyDelete
  3. AnonymousAugust 5, 2008 at 12:03 AM

    Thanks Sivaram.

    There was an article in Barron's about Japanese small caps and the fund manager from Sparx asset management. Apparently the founder of Sparx, Abe is a value investor. I know that you have an interest in Japanese companies, and I thought that you might be interested.

    hpmst3

    ReplyDelete
  4. Sivaram VAugust 5, 2008 at 10:26 AM

    Thanks for the Japanese mention, hpmst3.

    I did run across SPARX before but I have no idea if the manager is a value investor or not (I only know a little from an article I read a while ago.) I'm still hesitant about Japan because of poor corporate governance. Even if a company is undervalued it may stay that way for a long time.

    These days I'm getting more attracted to large-caps (these tend to have been corporate governance.) A lot of the Japanese industrial companies, which are cyclical, are being sold off due to a slowing economies. For example if a company like Toyota drops below book value (it's at 1.2x book value right now) then that would be much safer than the ultra-cheap small-caps. Anyway, just something I'm thinking of.

    ReplyDelete

Post a Comment

Popular Posts

Thoughts on the stock market - March 2020

Image
Right now, DJIA has a P/E of 16.8 and forwand P/E of 15.1, whereas S&P 500 is at 20.1 with forward P/E of 15.8. Source: WSJ market Data If you ignore interest rates and inflation expectations--both of these influence valuations but depends on your macro call-- the market is not cheap. Long-term P/E is around 15. Trailing P/E is around 20% (Dow) to 40% (S&P500) higher than average. Forward P/E is in line with long term average but that assumes a strong V recovery. Consensus forecast is for profits to drop 1.2% in 2020. In 2008, it dropped 25.4% so current forecast is a very mild recession. Covid-19 coronavirus is not going to last more than a few months but these forecasts are still too rosy in my opinion. So I wouldn't rely on forward P/E. The richly valued (mostly tech or high quality) have not fallen much but the distressed ones have. So if you want to outperform in the long run, I think one’s choice right now is to: • Wait for market to fall another, say
✖ READ MORE >>>

Warren Buffett's Evolution and his Three Investment Styles

Image
A Young Warren Buffett In a comment to one of my posts , Mark Carter, who incidentally appears to have a  good blog worth checking out , asked: "Buffett Prime is 1970's to early 1990's" Could you elaborate? I have vaguely indicated how I view Warren Buffett in the past, but I thought I would detail my view of his investing behaviour. This is more of an opinion piece and many others would disagree with me (if you do, I'm curious to hear your thoughts). I don't follow Warren Buffett as closely as many value investors so I may get some facts wrong. My view is that Warren Buffett went through three different phases, with each consisting of different investment techniques. The overall investment theory remained the same—what people call value investing—but his execution, tactics, and strategy differs across the three phases. Some people may break up his career into additional periods but my feeling is that the three I will describe essentially capt
✖ READ MORE >>>

Charlie Munger: Stock market as a pari-mutuel betting system

The model I like to sort of simplify the notion of what goes o­n in a market for common stocks is the pari-mutuel system at the racetrack. If you stop to think about it, a pari-mutuel system is a market . Everybody goes there and bets and the odds change based o­n what's bet. That's what happens in the stock market. —Charlie Munger, "Art of Stock Picking" Although I don't share the same views on politics, I am probably closer to Charlie Munger than Warren Buffett when it comes to how we view the world. Warren Buffett is almost singly focused on business and investing, and is not very opinionated, indeed possibly not knowledgeable, in other areas. In contrast, I am closer to Charlie Munger in the sense that I have diverse interests—you can probably tell by the articles I link to or write about—and have an opinion on almost anything. There is one big difference though: I am not into the field of psychology quite like Munger. So it may be surprising to see me rarely
✖ READ MORE >>>