Category: Warren Buffett & Berkshire Hathaway
Investing Errors Come From Psychology, Not Information — Charlie Munger (2 of 2)
“A latticework of mental models” describes ways that Charlie Munger sees intelligence and wisdom. Mental models describe more than simple IQ, or Intelligence Quotient. Munger Avoids Investing Errors by Many Mental Models Munger believes a wise person is best served by 80 to 90 mental… Continue reading
Dodging Bullets Keys Investment Success
Great investors have skills to seize opportunities and get into good situations. Equally as important can be the skill at “scrambling out of bad situations,” as Charlie Munger would say, or “dodging bullets” as it sometimes feels when helping companies solve challenges. At the Berkshire meeting… Continue reading
Rational Investing vs Irrational Entrepreneurship (Admirable Idealism)
When asked at this year’s meeting, “What matters most at Berkshire Hathaway?” Charlie Munger and Warren Buffett quickly agreed: “Seeing things the way they are.” Rational As Opposed to Smart Warren and Charlie then went to one of their favorite topics about how the success of… Continue reading
Portfolio Churn — Enemy of Investment Returns
Churn destroys investment return. Strangely, traditional private equity builds itself to churn. Churn reduces investment returns for several reasons such as transaction costs, business disruption, and the difference in tax rates between ordinary income and capital gains. This last difference is the easiest to quantify as… Continue reading
Private Equity Trending Toward Longer Term Models Like Greybull Stewardship
Momentum is growing toward private equity structures with longer term time horizons and movement toward more “permanent capital” — structures that are more similar to Berkshire Hathaway and Greybull Stewardship (my private equity fund focused on companies with $1-3 million in profit). Blackstone private equity… Continue reading
2014 Berkshire Hathaway Annual Letter – Buffett and Munger Observations From 50 Years
Saturday, Feb. 28, 2015, Berkshire Hathaway posted their 2014 Berkshire Hathaway annual letter. As this is the 50th anniversary of Warren Buffett taking control of Berkshire, this letter included two extra sections. Both Buffett and Vice Chairman Charlie Munger wrote about their observations about the first fifty… Continue reading
Super Investor, Seth Klarman, on Lessons Learned from Buffett
Seth Klarman has a legendary hedge fund that you may not know, the Baupost Group. His returns in that fund have been Buffett-like. He is a value investor . . . truly, not just someone who likes to say that word. His insights are treasured,… Continue reading