Friday, August 1, 2008 4 comments ++[ CLICK TO COMMENT ]++

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.

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4 Response to This Is Why Warren Buffett Is The Best Investor Of All Time

Anonymous
August 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

August 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.

Anonymous
August 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

August 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.

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