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Buffettology

How $105,000 Turned into $30 Billion

Agenda

Why Warren Does Not play the stock Market. How Warren Makes Good Profit out of Bad News About a Company How Warren Exploits the Markets Shortsightedness How Companies make investors rich, the interplay between ROE and Inventory Turnover The Type of Businesses Warren Fears and Avoids. The Kinds of businesses Warren Loves

Using Warrens Investment Methods to avoid the next high tech Massacre Interest Rate and Stock Prices Solving the Puzzle of the Bear/Bull Market and how Warren uses it to his advantage. How Warren Discerns Buying opportunities others Miss Where Warren Discovers Companies with Hidden Wealth Financial Information: Warrens Secrets for Using the internet to Beat the Wall Street. Warrens Checklist for Potential Investments. The 10 Points of light How to Determine when a Privately Held Business can be a bonanza. Warrens Secret Formula for Getting out at the Market Top.

Where

is Warren Investing Now Stock Arbitrage: Warrens Best kept secret for Wealth Building. Warren Buffets Mathematical Equations for Uncovering Great Businesses Thinking the Way Warren Does: The Case Studies of his most recent Investments Putting Buffettology to work for you

Why Warren Does Not play the stock Market.


Warren Does not play the stock market. He is not interested in Current Trends. Does not chart stock prices. Does not participate in Momentum trading. Warren got super rich not by playing the stock market but by playing the people and institutions who play the stock market. 95% of market participants are short sighted. Short Sighted mentality undervalues the long term prospects of a great business. Warren Buys on Bad News

How Warren Makes Good Profit out of Bad News About a Company
Selective

Contrarian Investment Strategy Short sightedness of the Mutual Fund beast. How Mr Market Helped Buffet to Get Rich. Companies that have durable competitive advantage have the economic power to pull through out of most bad situations.

How Warren Exploits the Markets Shortsightedness


Sports

Technique of Baseball Great Ted Williams Warren looks at businesses into two categories: Durable competitive advantage and price competitive commodity businesses.

How Companies make investors rich, the interplay between ROE and Inventory Turnover
Best

kind of business to own is one with high ROE and high Inventory Turnover Ratio. Second best is a business with either one of the two above. Avoid if both are low.

The Type of Businesses Warren Fears and Avoids.


Internet Portal Internet Service Providers Memory Chip Manufacturers Airlines Producers of raw food stuff like rice and corn Steel Producers Gas and oil companies Lumber Industry Paper Manufacturers Automobile Manufacturers.

AVOID
Price

competative businesses regardless of how great the buying opportunity looks. They lack the economic might that will ensure that they survive downturns. They carry the additional burden of debt because they can only remain in business by continuously upgrading their PP&E

The Kinds of businesses Warren Loves

Determine the competitive advantage of the company and the durability of the competitive advantage. Producing a unique product or providing a unique service. That product or service must have durability. Companies like Intel mat have competitive advantage but they lack durable competitive advantage.

Using Warrens Investment Methods to avoid the next high tech Massacre
Lack

of historical durable competative advantage keeps Warren from investing in emerging industries. Is it wise to buy the company as a whole? If the entire company is not worth investing then it is not worth even to buy a single share.

Interest Rate and Stock Prices


Will

I get a better rate of return if I invested in bonds than in the stock of this company? Interest rate goes down stock prices go up.

Identify

the buying opportunity: A good company makes a bad investment if you paid too much. Bull/Bear Market cycles, Industry recessions, Individual calamities, Structural changes and War

Solving the Puzzle of the Bear/Bull Market and how Warren uses it to his advantage.

How Warren Discerns Buying opportunities others Miss


Industry

recessions hurts everyone the weak perish but the strong survive. Individual Calamities: When great companies do something stupid. Structural Changes War

Where Warren Discovers Companies with Hidden Wealth


Durable

advantage is created through competitive struggle. Brand name fast food Patented Prescription drugs. Branded food items. Branded Beverages Branded Toiletries/Home Products.