Sunday, November 06, 2005
Buffett's Holdings, Pimco & Mauboussin
Great update on
Here is a link to an academic article for those few who stubbornly believe the Oracle is a coin flipper. The academics prove the absence of luck, risk adjusted.
1) From 1993 Letter to Shareholders: “The strategy we've adopted precludes our following standard diversification dogma. Many pundits would therefore say the strategy must be riskier than that employed by more conventional investors. We disagree. We believe that a policy of portfolio concentration may well decrease if it raises, as it should, both the intensity with which an investor thinks about a business comfort-level he must feel with its economic characteristics before buying into it. In stating opinion, we define risk, using dictionary terms, as "the possibility of loss or injury."”
2) The authors state: “His philosophy places emphasis squarely on the determinants of value: the estimation of future cash flows and growth rates which is also consistent with his principle of investing in businesses that he understands and is not difficult to predict. “
One of my favorite Buffett quotes: “I invest in the absence of change.”
If you haven’t considered the market that I think is headed into a 1982 bull market (exiting price instability, 30% of index trading below book value, etc), consider