thanks for the info. i am enjoying your new book-"trade like a hedgefund" great data and well written. do you know where i read about buffett's palatial mansions ? i can't seem to locate the source and may have him confused with another. thanks ! surfer d.
yes. vishnu is a very knowledgeable hedge fund manager and he writes from a high level of experience. any trader would benefit from this book. best, surf
Vishnu First let me say I am very pleased we have individuals of your intellect on this board. Thank you for taking your time to post here! With that said, Buffet a TRADER? I am reminded of a question/quote by Abraham Lincoln, âHow many legs does a three legged dog have if you call the tail a leg? It is three! Calling a tail a leg does not make it a leg.â Considering the following statement by Buffet from the Berkshire Hathaway 2003 annual report page 20 âWe bought some Wells Fargo shares last year. Otherwise, among our six largest holdings, we last changed our position in Coca-Cola in 1994, American Express in 1998, Gillette in 1989, Washington Post in 1973, and Moodyâs in 2000. Brokers donât love us.â I must confess, given my perception of the connotation of âtraderâ, I still do not believe Buffet to be a trader. Asset allocating investor, probably, but trader, not really. In fairness to your statements, it is (now lets not get into a big discussion over âWhat is, is!!! Vs What is, is??), it is probably more a question of semantics, subjective such as âProgressâ vs objective such as âPregnantâ. But wait....... Student: âThe pregnant fireman wiped the sweat as he came down the ladder.â Teacher: âIf the fireman was a man he can not be pregnant!!!â Student âBut I looked it up in the dictionary. It said, Pregnant meant with or carrying child.â Again Vishnu I want to say I am glad that you are taking your time to post on this board. Thank You. But, I must still profess I believe, given his statement above and past purchases and sales record, I do not believe Buffet to be a trader (although he might be a little bit, but I sure hope you donât tell me he is a little bit pregnant). I don't mean to offend anyone. Just having a little fun.
one more item for the list- Buffet's "down home, aw shucks, I don't buy tech because I can't understand that newfangled stuff" persona is contradicted by his investment in Level 3.
Marketsurfer: Thanks for the compliment! The book was a pleasure to write and I've been enjoying the feedback from people (in addition to the research it took to make the book). Puffy: LVLT (and AMZN) are good examples of Buffett not sticking to what he knows. Not to mention his 2002 investments in IPPs (at 20%+ yields which, I have to say, were brilliant) and even his investment in the derivatives portfolio that Gen Re owned which, years later, Buffett is still trying to figure out. Nut: In terms of trading I have to agree and disagree. Obviously Buffett is not sitting there scalping spooz. However, a large part of Buffett's work over the past 50 years has been arbitrage, in some cases in transactions lasting no more than a few days. He says as much in, I believe the 1989 letter to investors as well as many of the letters he wrote to the investors of his hedge fund from 1957-1969 (not publicly available btw as the BRKa letters are). The only reason he is not doing more arb now, he says, is that its hard to put $50B to work that way. But you look at many of the convert arb deals he did in 2002 and those are already off his books - trade over. Also, when he says "a large part of my holdings...has not changed" this is simply not true. He rolled over a $30B bond portfolio last year which was by far his biggest holding at the time. He's also bought and dumped 125M oz of silver recently and we can't forget the investment in West End Capital which is involved in trading fixed income paper all day long. The media focuses on Buffett as a long-term owner of stocks but its simply not what Buffett does and only represents a small portion of the increase in book value of the entire company, particularly over the past 15 years. And, again, in his first 12 years of investing a good chunk of his profits came from arbitrage and other short-term trading techniques.
Vishnu It looks like we must establish a lexicon specifically for this thread. when he says "a large part of my holdings...has not changed" this is simply not true. lier= his hedge fund from 1957-1969 & in his first 12 years is= was= trader= semi strong trader= strong trader= weak trader= (now I don't want anyone putting "NUTSNEAL" in here) Vishnu, obviously I am just poking you with a stick. No offence intended. I must confess I was unaware Buffet may be as nimble with his investments as a result of hedging and arbing as you indicate. Although, I must defer to Mr. Lincoln. I do not believe Mr. Buffet is a trader. Although, this lexicon may prove me wrong.
Good Afternoon, I'll take a position here, which requires that before we can agree or disagree about what Mr. Buffett is or isn't, some definitions would be in order. The definitions of investor or trader, & what the holding period of said individual is? Once that's determined, we would need to be able to discern what proportion of his gains were derived from these two activities. Then we could begin to lean one way or the other on what we believe him to be. However, what we belive him to be is really of little value, & a moot point isn't it? As it appears the man himself believes he's an investor, & many on the surface seem to agree. Now for those who don't agree, it would appear the burden is upon you to disprove the validity of it. Which leads to 1st paragraph, and who will define the terms, & in what context? As we know there will be agreement, & diagreement. Which ultimately begs the ?, is this an issue that one really wnats to expend the effort upon, & @ what cost, & @ what gain? Have a Nice Day! God Bless & GF2U! Kelly P.S. If I'm not mistaken on the LVLT, wasn't that a purchase of convertible which was yielding about 10%, with a duration of 10 yrs., & the option to buy in the 3 area? I believe this was taken advantage of & sold for a profit of 100% just last year. The hold time was around 1.5 yrs., so in your book was this an investment or a trade? TIA for the reply!
I don't see how anyone can really call Buffett a "trader". A trader like Soros or Cohen or Neiderhoffer? Hardly. It's like saying Michael Jordan is a 3 point shooter. Yeah, he's taken 3 point shots before. But it's not his specialty. It's not what he's known for. His major focus and major love of the last 50 years has been buying and holding great companies. Because market values are so rich and because he has so much cash to deploy, he has looked to other opportunities in the last few years (i.e. silver, bonds, foreign currencies). And with interest rates at 1%, sitting in cash is not very profitable. A very underrated aspect of Buffett is how humble he is. He's unlike any other CEO or hedge fund manager out there. He puts his mistakes in plain english and he doesn't cover them up with PR puffery.
Yeah. I'm not sure if I should move this thread to trading or chit chat, but it clearly does not belong in Econ. EDIT: After review, it's clear that it was posted in the right forum to begin with IMO (the poster was apparently hoping to discuss Econ), but devolved to a discussion about Buffet (and man, I'm getting hungry now ). So it's going to Chit Chat.