I have always been interested in How Warren Buffet made his money.

I recently bought a book "Buffetolgy" by Mary Buffet, his ex-daughter in law.

I am finding the book quite an interesting read so I decided to start this thread to enable me rub minds with other people who are enamoured with Buffet and his methods .

So let us analyse the man, his methods, and their applicability to the Nigerian situation

See you at the top.

I would love to read that book.
Where can I get a copy.
Please analyse the book here for us.
I love Warren

i have two books written about Warren Buffet ' the warren buffet way ' and ' 101 reasons to own the world greatest investments ' I think the man invests for the long term and is also very patient ,i also think that he isn't the show off type , lives modestly and don't spend when its not an absolute necessity .
i think most of his pattern of investments can be applied to Nigerian investor ,but i think all could not work with just everyone, for example institutional investors some other financial managers like mutual fund managers ,may not agree with all of buffets method as they need to buy shares and gain from the capital appreciation unlike buffet who would surely not sell his shares so fast even when the price may have gone up .
in summary i think young people would gain much from Mr Buffet,his simple way of living despite his riches should be a good example .

I think the best book ever written about Warren Buffet is 'Buffet, the making of an american capitalist. This book started to tell the Buffet story from when he was around six years old, living in Omaha, Nebraska US. The guy was a real whiz kid back then and can do a lot with numbers, which proved very useful to him as he discovered investments. He was a newspaper distributor in his early teens.

He also started investing early, and had never looked back ever since. An avid reader who can read the annual report of almost every company from back to back. He lived for investments and started managing peoples money in his teens, starting from his friends and relatives. Honest and transparent in his dealings with money.

He is a long timer in his investments, believing that a company is not worth buying if you cant see it in your minds eye still performing after after around ten years from the time you bought. This book is a bible to investors. I think everybody interested in investments should first study the topic called BUFFETOLOGY.

some quotes about Mr Buffet ;

There was a one hour interview on CNBC with Warren Buffet, the second
richest man in the US who has donated $31 billion to charity. Here are some very
interesting aspects of his life:

1) He bought his first share at age 11 and he now regrets that he started too late!



2) He bought a small farm at age 14 with savings from delivering newspapers.



3) He still lives in the same small 3 bedroom house in mid-town Omahathat
he bought after he got married 50 years ago. He says that he has everything
he needs in that house. His house does not have a wall or a fence.



4) He drives his own car everywhere and does not have a driver or security people around him.



5) He never travels by private jet, although he owns the world's largest
private jet company.



6) His company, Berkshire Hathaway, owns 63 companies. He writes only one
letter each year to the CEOs of these companies, giving them goals for the
year. He never holds meetings or calls them on a regular basis.



7) He has given his CEO's only two rules.

Rule number 1: Do not lose any of your share holder's money.

Rule number 2: Do not forget rule number 1



Cool He does not socialize with the high society crowd. His past time after
he gets home is to make himself some pop corn and watch television.



9) Bill Gates, the world's richest man met him for the first time only 5
years ago. Bill Gates did not think he had anything in common with Warren
Buffet. So he had scheduled his meeting only for half hour. But when Gates
met him, the meeting lasted for ten hours and Bill Gates became a devotee
of Warren Buffet.


10) Warren Buffet does not carry a cell phone, nor has a computer on his desk.



11) His advice to young people: Stay away from credit cards and invest in yourself.

Berkshire Hathaway share stand at $108,849 for one single share. Would you buy one share if you had the money. Its hard to find someone selling anyways,

egoldman:




10) Warren Buffet does not carry a cell phone, nor has a computer on his desk.

This particular habit would not hold with many of us. If it were not for the computer we would not be holding this discussion. The fact that Warren does not carry a cell phone or have a system on his table does not mean that he does not recognise the importance of one.
Aside from discussing the his lifestyle I beleive that discussing his methods in selecting stocks and their adaptability to the Nigerian situation would benefit us more.
For instance, though I have not finished reading the book, I can already deduce that a driving force behind Warren's strive for long term investment and a major reason why he parted ways with his ideological mentor and friend Benjamin Graham was his quest to avoid the impact of taxation on his capital gains. However in the Nigerian situation there are no taxes on the capital gains realised form the sale of shares. So If Warren were to play in the Nigerian market he change his approach to the situation.

Hello Mr Frank ,
i said earlier in my post on this thread that its not all his method of investments that would work in the modern time especialy in nigeria ,but all the same i think we have lots to gain from the man method of selecting stocks .

hello egoldman
I know.
The books you read which method did you find most fascinating and which have you put into practice

One of Mr buffet's advice in those two books was to invest in stocks of companies that have the edge over others in their area of operation and also should maintain same in the foreseeable future.

This was why i went for firstbank shares and also dunlop ,in the case of first bank ,i have seen that they have history of paying good dividends and as i don't plan to sell it any time soon ,i would be adding more of them shares with whatever they pay as dividends ,this strategy i learned from mr buffet also

Dunlop after the exit of michelin stands to dominate tyre business in nigeria especialy truck tyres , though their shares is not doing too well now ( i bought from the floor ) the newly built ASRT project could change their profits this year.The effect of tokunbo tyres is mostly on small car tyres and not trucks ones where dunlop specializes, also with the current goverment efforts, tyre importation is likely to be banned for good in the near future.

Mr. Buffet's investment strategies could be applied in the Nigerian environment, essentially its the buy and hold strategy. He does't also buy every stock. He narrows his stock picks to well researched companies with sound fundamentals but for one reason or the other, Mr Market has failed to notice the hidden values of the stock.

A lot of investment gurus and money managers who seemed to be speeding down at the opposite direction all got their fingers burnt, these people seemed to buy everything and sell everything without any consideration to the Buffet methodology.

There is a certain example of one Fred Carr, whos ideology is like 'we fall in love with nothing, every morning every stock in the portfolio is for sale, including my coat and tie! .
Their only consideration is about how much did we make and how fast.
For the dicerning investor, there are quite a number of stocks with hidden potentials we can buy and enjoy in the future, The uncertainities notwithstanding.

Mr buffet once said of those class of money managers and highly paid invesment analysts who believed his methods are outdated,'if you are so smart, how come am so rich?
He likened their system of stock selection like flipping coins or throwing darts at stock names to use it for stock selection, without any regard for the individual company in consideration.

Dear all ,

Warren buffet is without doubt the most successful investor ever.He is the only person in the top5 of the world richest that made his money from the stock market.He is 2nd behind Bill Gates,and worth $52.4billion as at 28march this year.
Having said that, WHAT LESSONS CAN WE LEARN FROM HIM AND HIS METHOD. Personally, i like his idea of buying stocks which he believes,after thorough analysis,are at a DISCOUNT or below their INTRISIC VALUE. For me a practical example is Fidelity Bank share price. Also he likes to buy solid companies with temporary problems.Another example here is Cadbury share price.This however requires PATIENCE for the firm to get out of the woods.We can also learn from guys like Peter Lynch.

Warren buffet is the greatest investor in the world yes but how long did it take him to be one.

I think it all got to do with your goal, what do you want to achieve with wahtever investment; what time span is your goal??what other influencing factors are there.??if Warren buffet was a nigerian he would probably be one of the richest 'clean biz' nigerians but then he would have started investing very early in uac/fisrt bank/ lever bros/ cadbury/etc a.s.a he had money but for naija other influences nko extended family alone?? the poverty around us instability of the country generally He invested well but had a long term goal!!!! but most nigerians have a Very Short term goal!!!! so we tend to want to trade mostly even for medium term becos papa n mama no go suffer anymore and siblings get to school!!!and all that!!!
I hail the man becos he used his environment to get to his goal!!!
I hail all naijalanders too becos we are seraching to get to ours too

By the way who is the richest 'cleanbiz' investor in naija Guess we may learn one or two things from him!!!

Chionyins:

Warren buffet is the greatest investor in the world yes but how long did it take him to be one.

I think it all got to do with your goal, what do you want to achieve with wahtever investment; what time span is your goal??what other influencing factors are there.??if Warren buffet was a nigerian he would probably be one of the richest 'clean biz' nigerians but then he would have started investing very early in uac/fisrt bank/ lever bros/ cadbury/etc a.s.a he had money but for naija other influences nko extended family alone?? the poverty around us instability of the country generally He invested well but had a long term goal!!!! but most nigerians have a Very Short term goal!!!! so we tend to want to trade mostly even for medium term because papa n mama no go suffer anymore and siblings get to school!!!and all that!!!
I hail the man because he used his environment to get to his goal!!!
I hail all naijalanders too because we are seraching to get to ours too

By the way who is the richest 'cleanbiz' investor in naija Guess we may learn one or two things from him!!!

I agree that if Warren Buffet was a Nigerian he would have adapted his principles to our situation but I still think he would have become one of the richest men in the world.
He would definitely have played more in the short term end as one of his primary reasons for holding onto stocks for a long time is that he can defer capital gains tax that way.
But in Naija there are no taxes on capital gain on sale of shares so he ould be encouraged to take his profit more often.

@FRANK,
i do not think he would have been the richest investor if he was a nigerian becos of our environment . He would have done all what you said but i am getting at your environment determines alot to getting you there maybe he would have invested abroad as much as possible also factoring that would be all his focus , no extended family consideration, etc ; get what i getting at?
My thinking is in niaja right now most investors are traders n speculators to get at much as possible: their are pressing issues around everyone our environment is not stable, too much poverty, but with the middle class emerging? (Thanks to the market and HYIS) hope people are inesting in what would empower them, the class divide must be shorten by all means,

Hello people,

I have been reading through the posts and i think there's a misconception that Warren Buffet made his money as an individual investor.

Warren started out with a limited partnership where he had seven people including himself contribute $15,000 each. From this pool of funds, he started buying shares off the floor of the stock exchange. After some time he decided to dissolve the partnership leaving his partners with either of two options:
1. Obtain your share of the cash at hand OR
2. Leave your share with him while he continues to invest,

He now started mopping up shares of Berkshire Hathaway, which was an insurance company, why he did this was to use the cashflow obtained from premiums to purchase shares of companies he liked/ met his investment objectives. All he had to focus on was owning a majority % in Berkshire Hathaway, and you all know the rest of the story,

I just want you guys to understand that he made his money using a business (Berkshire Hathaway) as his investment vehicle and not as an individual investor purchasing units of the floor.

Chionyins:

@FRANK,
i do not think he would have been the richest investor if he was a nigerian because of our environment . He would have done all what you said but i am getting at your environment determines alot to getting you there maybe he would have invested abroad as much as possible also factoring that would be all his focus , no extended family consideration, etc ; get what i getting at?
My thinking is in niaja right now most investors are traders n speculators to get at much as possible: their are pressing issues around everyone our environment is not stable, too much poverty, but with the middle class emerging? (Thanks to the market and HYIS) hope people are inesting in what would empower them, the class divide must be shorten by all means,

Dangote is a Nigerian and he has made his money inspite of having extended family .
I beleive that Buffet would have even been richer if he had been a Ngerian.

@Frank,
I am not doubting you only doubting if he would have been this rich if he was a nigerian. My piont been that our environment is very different. THIS IS NAIJA!!!
Ok dangote clean biz made man abi But not in investing in stock abi?? I was trying to liken spmeone naijaman to buffett, do we have any one cleanbiz that started from the scratch. I emphasis our niaja factors so that we dont look at buffet too much but our fellow naija man that would have gone thru the naija factors of instability extrended family and etc unique only to niaja environment. Our stock market even defiles all indices.
I think discussing buffet na academic exercise abi

Buffet always regarded his investment from a business perspective, the way a Dangote wuld look at a business and invest. That's a reason why he adopted a long term approach to investing. In fact his first preference is to buy up the whole stock of any company that he is interested in, whch effectively places him in control of the management of the company. This is not much different from the way Dangote invests. For him to be into diverse industries tells me that his major role if plotting the strategic path of the companies and not gettting overly involved in the day to day management of the company.
I personally beleive that , in spite of how harsh the Nigerian environment is, it provides excellent opportunities for making wealth.
So I think that Buffet wuld have made it in Naija.

I read somewhere that buffet has a cardianl rule:

do not invest in any business you do not fully understand.

in the 90s he fell out of favor with industry analysts because he refused to invest in the dot com boom(for those very reasons) .and he was proved right.i think thats a lesson so many of us as Nigerians need to imbibe.i cannot honestly claim to have thoroughly studied the companies i have shares in(which means i'm gambling with my money).

Hi all! Thanks Frank 4 starting this thread. With the current boom in Nigeria's capital market, it's very important for us know to know how to play the market succesfully. So, there's no end to how much information we'll be needing as investors.Please forum let's focus on Buffet's methods- which have become legendary in any case, rather than argue about his methods. One thing about Nigerian youths is that they are very intelligent. I'm sure if we familiarise ouselves with the methods, we'll be able to adapt them to our environment.

By the way, anyone know where I can get the books in FCT?

junegirl:

Hi all! Thanks Frank 4 starting this thread. With the current boom in Nigeria's capital market, it's very important for us know to know how to play the market succesfully. So, there's no end to how much information we'll be needing as investors.Please forum let's focus on Buffet's methods- which have become legendary in any case, rather than argue about his methods. One thing about Nigerian youths is that they are very intelligent. I'm sure if we familiarise ouselves with the methods, we'll be able to adapt them to our environment.

By the way, anyone know where I can get the books in FCT?

My main point for starting this thread is for us to analyse his methods and not his lifestyle. I beleive that his methods if adapted to the Nigerian situation can help us corner our share of the national cake.

Ok Frank, do you intend to catalogue the methods so we (forum) can analyse or we just pick at random. In any case, what r we waiting for?

Do we have books on Niaja stocks/shares investing yet?. If there is any please let us know. Thank you.

I agree we shld adapt his methods but my thinking is will his methods necessarily apply to naija. He operated in a stable economy and nigeria is not one yet; every sphere of niaga polity has defiled the books:have defiled theory!!!
In essence i suggest we maxime this times.Guess that would by trading. So maybe naijarise buffett methods!!!

Rlst84sale:

Do we have books on Niaja stocks/shares investing yet?. If there is any please let us know. Thank you.

You can buy one from wealthzone. Very good book, their seminar I heard is equally good.

Can't we just tailored ours to fit Naija system?, then we work on perfecting it as times come by. We have seen how it works in organized societies, under and just being organized or what have you. Why can't we just take bits from each and combine them with Naija system and work it out?. If we can put it together well, I assure u we will make it work.

@Load,

Where is the book store located?. Please give details

Chionyins:

I agree we shld adapt his methods but my thinking is will his methods necessarily apply to naija. He operated in a stable economy and nigeria is not one yet; every sphere of niaga polity has defiled the books:have defiled theory!!!
In essence i suggest we maxime this times.Guess that would by trading. So maybe naijarise buffett methods!!!

Yes. They would apply to Nigeria with some minor modifications to take advantage of our peculiar situations.

.

When will we start analyzing Buffet?