Author Topic: Buffett's Early Investments  (Read 12433 times)

randomep

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Re: Buffett's Early Investments
« Reply #10 on: July 02, 2014, 02:39:44 PM »


Thanks for the article, but I am not convinced by the thesis. In the 50's and 60's buffett invested in 400 companies total so the majority must be cigar butts. They must all contribute to his overall results, because if he was getting 30-50% a year he cannot have laggards in his portfolio....

I'd love to have list of his holdings back then (not just the 5 or 6 mentioned in snowball and other books)

There is a chapter one of the editions of Permanent Value authored by Andrew Kirkpatrick that shows a snapshot of the Buffett Partnership holdings in early 1950s. It's a copy of the hand written ledger used by Buffett. There are probably 70 stocks listed with prices and share information.

Great! That's exactly what I was looking for! I got a hold the 1994 edition at the library (the author wants me to buy it as 3 kindle parts of $10 each, too greedy!)

It's probably in the 2008-2010 version or somewhere that timeframe. I can probably send it to you, as I have the pages at home. You might be able to locate the pages on the free book preview on Amazon.

Oh dang, I was dreading that, well if you can send me the pages with just the table of holdings I would be grateful.

If that is not feasible, can someone give an idea of which page/section that table is in? I ask because the kindle version is broken into 3 parts so I'd like to buy just the part I need.



JoelS

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Re: Buffett's Early Investments
« Reply #11 on: July 02, 2014, 02:44:46 PM »
I have the 2014 OPV edition -

In the 1957 Partnership letter he talks about the level of the general market..

"if the general market were to return to an undervalued status our capital might be employed exclusively in general issues and perhaps some borrowed money would be used in this operation at that time.. conversely, if the market should go considerably higher, our policy will be to reduce our general issues as profits present themselves and increase the workout portfolio.. "…

Then he talks specifically about workout/general ratio - given the change in the market..

"The market decline has created greater opportunity among undervalued situations so that, generally, our portfolio is heavier in undervalued situations relative to workouts… At the end of 1956, we had a ratio of about 70-30 between generals and workouts.. Now it is about 85-15."

My 2c is that it doesn't really matter whether the "generals" were cigar butts or "wonderful companies".. Buffett was concerned about the return in each case.. and he was an expert in weighing up all the factors and identifying return on each outlay - he got better at identifying wonderful companies, with Charlie's help etc.. but he was already very very good at it.

It's worth noting that Buffett didn't create this approach to investing - he closely mirrored Ben Graham's operations in weighting holdings in a sort of sliding scale as the market went up and down.. The higher the market went, the more workouts/special situations so as to insulate the portfolio from a general decline.. and more generals when the market as a whole was undervalued so as to participate in the market rise when it came..

randomep

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Re: Buffett's Early Investments
« Reply #12 on: July 02, 2014, 03:58:42 PM »
I have the 2014 OPV edition -

In the 1957 Partnership letter he talks about the level of the general market..

"if the general market were to return to an undervalued status our capital might be employed exclusively in general issues and perhaps some borrowed money would be used in this operation at that time.. conversely, if the market should go considerably higher, our policy will be to reduce our general issues as profits present themselves and increase the workout portfolio.. "…

Then he talks specifically about workout/general ratio - given the change in the market..

"The market decline has created greater opportunity among undervalued situations so that, generally, our portfolio is heavier in undervalued situations relative to workouts… At the end of 1956, we had a ratio of about 70-30 between generals and workouts.. Now it is about 85-15."

My 2c is that it doesn't really matter whether the "generals" were cigar butts or "wonderful companies".. Buffett was concerned about the return in each case.. and he was an expert in weighing up all the factors and identifying return on each outlay - he got better at identifying wonderful companies, with Charlie's help etc.. but he was already very very good at it.

It's worth noting that Buffett didn't create this approach to investing - he closely mirrored Ben Graham's operations in weighting holdings in a sort of sliding scale as the market went up and down.. The higher the market went, the more workouts/special situations so as to insulate the portfolio from a general decline.. and more generals when the market as a whole was undervalued so as to participate in the market rise when it came..

Yes that's all very good points.

I think the student (Buffett) was better than the master (Graham) back when the student was 21 or something. Buffett took value investing to the next level. That's his biggest contribution to us common folk.

My intention is to get a hold of the OPV, copy that list of 75 stocks, and track down the financials of all those stocks on Moody's or some equivalent and see what he saw in them. Then try to replicate it on the set of all global stocks. Because I believe these stocks still exist, just not in the US but they exist somewhere, in some land far far away....

And I find it too hard to find  growth at a reasonable price, I find cigar butts much easier!

peter1234

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Re: Buffett's Early Investments
« Reply #13 on: July 02, 2014, 11:23:43 PM »

Oh dang, I was dreading that, well if you can send me the pages with just the table of holdings I would be grateful.

If that is not feasible, can someone give an idea of which page/section that table is in? I ask because the kindle version is broken into 3 parts so I'd like to buy just the part I need.

That's what I love about this forum, people trying to save every penny. Truly value conscious!
 ;)
The good Buffett books are worth every cent, so $30 for the kindle version sounds like a good deal.
 :)

wachtwoord

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Re: Buffett's Early Investments
« Reply #14 on: July 03, 2014, 06:17:49 AM »
The Chinese are selling the hard copy of the 2007 version for $7.18 http://www.aliexpress.com/store/product/Of-Permanent-Value-The-Story-of-Warren-Buffett-2007-InternFree-shipping-ebook-pdf/1178231_1795397087.html (I ordered stuff from aliexpress before and never had problems except that it takes a while to get there).

EDIT:

Sorry, I misread. Apparently it's epub/mobi/pdf
« Last Edit: July 03, 2014, 06:21:09 AM by wachtwoord »
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Liberty

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Re: Buffett's Early Investments
« Reply #15 on: July 03, 2014, 06:21:58 AM »
I can link you to the 1996 version for free.

The Chinese are selling the hard copy of the 2007 version for $7.18 http://www.aliexpress.com/store/product/Of-Permanent-Value-The-Story-of-Warren-Buffett-2007-InternFree-shipping-ebook-pdf/1178231_1795397087.html (I ordered stuff from aliexpress before and never had problems except that it takes a while to get there).

I wouldn't recommend buying from a source that infringes on Andrew Kilpatrick's copyright (as I'm pretty sure this PDF is), as he obviously put a lot of work into compiling this book over the years. He also reads this forum, afaik.
« Last Edit: July 03, 2014, 06:29:28 AM by Liberty »
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wachtwoord

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Re: Buffett's Early Investments
« Reply #16 on: July 03, 2014, 06:28:41 AM »
The Chinese are selling the hard copy of the 2007 version for $7.18 http://www.aliexpress.com/store/product/Of-Permanent-Value-The-Story-of-Warren-Buffett-2007-InternFree-shipping-ebook-pdf/1178231_1795397087.html (I ordered stuff from aliexpress before and never had problems except that it takes a while to get there).

I wouldn't recommend buying from a source that infringes on Andrew Kilpatrick's copyright (as I'm pretty sure this is), as he obviously put a lot of work into compiling this book over the years. He also reads this forum, afaik.

Yeah, I initially though ti t was a hard copy (and selling second hand books is legal).
"Beware of he who would deny you access to information, for in his heart he dreams himself your master"

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 SODI - NVTR - ADDC - UPGI - HNFSA - IPO.TO - BONL - BWEL - GNW - NYRT - POE.V

randomep

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Re: Buffett's Early Investments
« Reply #17 on: July 03, 2014, 02:17:34 PM »


Hi Folks, please help me here. I am looking at the aforementioned Buffet holdings in 1962. But the handwriting is hard to read (and I may need to get a kindle copy for better resolution), Can anyone tell me what are the following holdings?

BCP
TNP
LNC   (I doubt it is Lincoln National Corp because the price is too different)
Murray ??? There are many companies that start with Murray, but Murray what??

Thanks!
ps. these are not trivial holdings, all are more than 1% of portfolio.


globalfinancepartners

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Re: Buffett's Early Investments
« Reply #18 on: July 03, 2014, 02:20:28 PM »
I believe TNP was Texas National Petroleum - a merger arbitrage position.

EDIT:  yes, here is some more color on this arb:
http://books.google.com/books?id=hOmE143gjMIC&pg=PA93&lpg=PA93&dq=Buffett+Partnership+TNP&source=bl&ots=3GLf55TsfX&sig=aINU_95iYCgqFbO2JlxHg47nIdM&hl=en&sa=X&ei=5Mi1U87KD4-VyAS8moLIBg&ved=0CCsQ6AEwAg#v=onepage&q=Buffett%20Partnership%20TNP&f=false



Hi Folks, please help me here. I am looking at the aforementioned Buffet holdings in 1962. But the handwriting is hard to read (and I may need to get a kindle copy for better resolution), Can anyone tell me what are the following holdings?

BCP
TNP
LNC   (I doubt it is Lincoln National Corp because the price is too different)
Murray ??? There are many companies that start with Murray, but Murray what??

Thanks!
ps. these are not trivial holdings, all are more than 1% of portfolio.
« Last Edit: July 03, 2014, 02:22:18 PM by globalfinancepartners »

OracleofCarolina

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Re: Buffett's Early Investments
« Reply #19 on: July 03, 2014, 02:57:49 PM »
anyone heard of Buffett's thoughts on  United Artists Theatre Circuit in the past?  Buffett apparently bought in Sept 1961 as I have the stock certificate.
« Last Edit: July 03, 2014, 03:03:42 PM by OracleofCarolina »