Author Topic: Buffett's Early Investments  (Read 12432 times)

Liberty

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 9042
  • twitter.com/libertyRPF
    • twitter.com/libertyRPF
Buffett's Early Investments
« on: July 01, 2014, 03:53:08 PM »
Good blog post on Buffett's early investments.

http://basehitinvesting.com/buffetts-early-investments/
"Most haystacks don't even have a needle." |  I'm on Twitter  | Watch this, please


randomep

  • Hero Member
  • *****
  • Posts: 1001
    • Bull Bear and Value Blog
Re: Buffett's Early Investments
« Reply #1 on: July 01, 2014, 07:02:53 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)

Liberty

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 9042
  • twitter.com/libertyRPF
    • twitter.com/libertyRPF
Re: Buffett's Early Investments
« Reply #2 on: July 01, 2014, 07:07:29 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)

I think it depends what you think the thesis is. I would agree with "Buffett cared about quality earlier than most people think", that he wasn't one-dimensional in his thinking even that early, but I would not agree with "everything he bought back then was high quality rather than cigar butts". There were a bunch of those too, and I'm sure he did quite superbly with them too.

It's a bit like Ben Graham is known for cheap stocks but a lot of his returns came from holding GEICO for a long time.
"Most haystacks don't even have a needle." |  I'm on Twitter  | Watch this, please

peter1234

  • Hero Member
  • *****
  • Posts: 614
Re: Buffett's Early Investments
« Reply #3 on: July 02, 2014, 12:00:08 AM »
Big difference to today is certainly that it was buy and sell rather than buy and hold.

Since holding period was much shorter, compounding was a smaller part, biggest part was multiple expansion.

Making it kind of difficult to pay up for quality and have compounding increase business value.

But yes, if he could find dirt cheap quality (like Western Insurance), I am sure he took it.

 ;)

Liberty

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 9042
  • twitter.com/libertyRPF
    • twitter.com/libertyRPF
Re: Buffett's Early Investments
« Reply #4 on: July 02, 2014, 06:36:21 AM »
Big difference to today is certainly that it was buy and sell rather than buy and hold.

Since holding period was much shorter, compounding was a smaller part, biggest part was multiple expansion.

Making it kind of difficult to pay up for quality and have compounding increase business value.

But yes, if he could find dirt cheap quality (like Western Insurance), I am sure he took it.

 ;)

Indeed. I think the environment he was operating in had something to do with it too, though. He had more bargains than he knew what to do with and seemed to frequently trade up (or trade down, depending how you look at it), which is something he couldn't do as often when 1) overall valuations went up and 2) he had more money, limiting him to bigger companies.
"Most haystacks don't even have a needle." |  I'm on Twitter  | Watch this, please

mn_gophers1

  • Newbie
  • *
  • Posts: 5
Re: Buffett's Early Investments
« Reply #5 on: July 02, 2014, 09:42:10 AM »


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. 

bmichaud

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 1593
Re: Buffett's Early Investments
« Reply #6 on: July 02, 2014, 11:13:31 AM »
I agree 100% with the author. I think Munger gets FAR too much credit for converting Buffett to "quality". In his early letters Buffett routinely talked about finding attractive value in industries with favorable outlooks.

randomep

  • Hero Member
  • *****
  • Posts: 1001
    • Bull Bear and Value Blog
Re: Buffett's Early Investments
« Reply #7 on: July 02, 2014, 12:56:00 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!)

 

Tim Eriksen

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 626
Re: Buffett's Early Investments
« Reply #8 on: July 02, 2014, 01:39:02 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!)

Good luck.  I have the 1998 edition and it is not in there.  It is my understanding that the book gets larger every year.  Not sure what year the information on the holdings first showed up. I would like to see it myself.

mn_gophers1

  • Newbie
  • *
  • Posts: 5
Re: Buffett's Early Investments
« Reply #9 on: July 02, 2014, 01:44:37 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.