Wednesday, October 10, 2007 1 comments ++[ CLICK TO COMMENT ]++

Insightful Articles: Buffett's Washington Post & See's Candies;

I have been on a reading streak (very little to do investingwise) and here are some articles I found useful. Simply mentioning articles already linked by other blogs seems lame but it is worth reiterating in the hope that some of your find them benefitial.

Warren Buffett's Investments in Washington Post and See's Candies

Courtesy of Gannon On Investing, I came across some insightful articles on Warren Buffett's decisionmaking regarding Washington Post and See's Candies. The articles were written by Max Olson of Max Capital and I recommend that you read them if you are interested in why Buffett invested in those companies. I'm quoting below some things I found insightful.

Here's an analysis of how Warren Buffett may have analyzed at Washington Post

Part I of See's Candies

Part II of See's Candies

Warren Buffett keeps referring to See's Candies as a textbook example of a good business so anyone interested in value investing should check out those two articles above.


Value Investing Articles

Here are some good articles mentioned by Reflections on Value Investing (I highly recommend that blog to anyone interested in value investing or Warren Buffett).

Leithner & Co. have a lot of interesting articles for value investors. Go to their website and click on Circulars to Shareholders and pick the articles you find interesting. Here are some I found interesting:

Value Investing, Risk, and Risk Management (sort of provides a logical reason for following value investing principles)

VALUE INVESTING AND THE (MIS)MEASUREMENT OF RESULTS (talks about what really matters when measuring your returns, and it ain't the stock price movement)

THE ROBINSON CRUSOE ETHIC VERSUS THE DISTEMPER OF OUR TIMES (haven't read this yet but it looks interesting)

RISK AND RETURN: RESTATING SOME FUNDAMENTALS FOR VALUE INVESTORS (Sort of generic but some may find the analysis interesting)

I don't necessarily agree with everyone that is said in the documents above but, nevertheless, they provide some new ways--at least to me--of justifying some value-investing-type strategies.



Young Buffett vs the Old One

Contrary to what many people think, Warren Buffett did not initially become wealthy by buying & holding forever. A lot of the stuff Buffett eschews depends on the context. He generally recommends buying & holding forever but that is primarily due to the large amount of capital he needs to allocate and the impact of taxes. When Buffett was younger--during his partnership days--he was more of a classic Graham investor, looking to buy assets below book value. He was also into merger-arbitrage and situations like that. He hardly held assets for a long period of time.

Buffett has remarked that he can get 50%/year returns if he had a small portfolio. People always wonder how and this post sheds some light on how Buffett was able to achieve such high returns in his younger days. In essence, you need to look for price discrepancies (i.e. stocks trading way below instrinsic value of a firm). This likely implies small-caps and micro-caps (although that's not the only place to find them).

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1 Response to Insightful Articles: Buffett's Washington Post & See's Candies;

Anonymous
February 10, 2008 at 2:38 PM

There is a quote from Buffett on www.madmergers.com. Check it out!

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