Wealth Management 47

Warren Buffett is probably the most read, most people ignore, a businessman in the world.

Warren Buffett’s annual letter to (BRK) Berkshire Hathaway shareholders is always eagerly awaited by investors for investment ideas, ingenuity and vision of the market. Year effort will not disappoint.

What remains for many of us by surprise, Buffett is an expert because it has rarely been imitated. Here is the richest man in the world in second place with a lot of U.S. $ 37, winning the applause of investors around the world not only for their statements an investment approach, but also an open and honest communication with its shareholders and yet few seem risky to try to follow in their footsteps.

And mo ‘introduction, Buffett and his partner Charlie Munger have a yield of 22% annually to shareholders issued BRK 40 years – in other words, has made an investment of $ 10,000 in Berkshire in 1965 in the United States 80 million dollar today. None came close to this rate of return over 40 years.

Transfer to a selection of values of Buffett and Munger to better growth and predictability of companies whose future can not judge. “It should not predict the explosion of a massive growth in sectors such as automobiles and airplanes to 1910 in 1930 and television in 1950. But the future of immense competition, most firms in these sectors the tenth.”

The growth is not enough, are people whose income outlook for the coming decades predict. It ‘possible that the profit margins and expected returns on capital.

I think it is very important to maintain a cash margin. “It depends on the kindness of strangers.” Too big, too-not is a fallback position in Berkshire. We always have a lot of liquidity. Our $ 20000000000 cash now earns a meager salary. But we sleep well.

The property market has received some attention in the letter, probably because the ownership of Berkshire Builders, Clayton Homes. “Years ago, people thought it was good news, we had two million housing starts a year, but home training – from the demand side – only about $ 1,200,000 The result was an oversupply of houses and falling prices ..

There are three ways to remedy this false: (a) the failure of many buildings, (2), the formation of families, for example, encourages young people to speed up living together, a program must not suffer from a lack of volunteers or (3) to reduce a number of homes below the rate of family formation. Our country has carefully chosen the third option.

At the height of the financial crisis, Buffett and Munger significant investment both stocks and bonds, but not more roads. “I buy more things (or are). Great opportunities are rare. When it rains did not come to a bucket of gold” Fingerhut.

CEO and recommendations that have been captured by the financial crisis was commissioned by Buffett. “In my opinion, a Board of Directors is required to leave if not the responsibility of the Director General, full of risks. When not in working condition is the administration to seek another job.”

He continued his shareholders that the burden of losses from the financial crisis. “CEOs and executives was largely intact. Your assets can be reduced by disasters supervision, but still live in style. CEO, and in many cases, administrators have received large financial carrot, a party must important center of their employment situation, now.

He also delivered a cutting line on the risks of taking advice on acquisitions of investment banks – “Do not ask the barber if you have a haircut.” The point Buffett must believe that costs can cloud the independence of their advice.

Last year, Buffett closed the largest investment in the history of Berkshire $ 44 billion acquisition by Burlington Northern Santa Fe Railroad. When told that he has revealed his faith in long-term prospects for the U.S. economy. He joked that “All this is due to the fact that my father bought a train, like a child.

Warrent Buffett is expert in wealth management, of course also for individual wealth management.