PICK STOCKS LIKE WARREN BUFFETT PART 1 docx

[...]... 19 82 19 83 19 84 19 85 19 86 19 87 19 88 19 89 19 90 19 91 1992 19 93 19 94 19 95 19 96 19 97 19 98 19 99 2000 12 .0 16 .4 21. 7 4.7 5.5 21. 9 59.3 31. 9 24.0 35.7 19 .3 31. 4 40.0 32.3 13 .6 48.2 26 .1 19.5 20 .1 44.4 7.4 39.6 20.3 14 .3 13 .9 43 .1 31. 8 34 .1 48.3 0.5 6.5 3.9 14 .6 18 .9 (14 .8) (26.4) 37.2 23.6 (7.4) 6.4 18 .2 32.3 (5.0) 21. 4 22.4 6 .1 31. 6 18 .6 5 .1 16.6 31. 7 (3 .1) 30.5 7.6 10 .1 3 37.6 23.0 33.4 28.6 21. 0 (9 .1) 8 .1 1.8... CCC-Boroson 1 (1- 44) 8/28/ 01 1:26 PM Page 10 10 THE ACHIEVEMENT OF WARREN BUFFETT TABLE 2 .1 YEAR Berkshire Hathaway vs the S&P 500 ANNUAL PERCENTAGE CHANGE IN PER SHARE IN S&P 500 BOOK VALUE OF WITH DIVIDENDS BERKSHIRE INCLUDED RELATIVE RESULTS 19 65 19 66 19 67 19 68 19 69 23.8 20.3 11 .0 19 .0 16 .2 10 .0 (11 .7) 30.9 11 .0 (8.4) 13 .8 32.0 (19 .9) 8.0 24.6 19 70 19 71 1972 19 73 19 74 19 75 19 76 19 77 19 78 19 79 19 80 19 81 1982... 18 .6 5 .1 16.6 31. 7 (3 .1) 30.5 7.6 10 .1 3 37.6 23.0 33.4 28.6 21. 0 (9 .1) 8 .1 1.8 2.8 19 .5 31. 9 (15 .3) 35.7 39.3 17 .6 17 .5 (13 .0) 36.4 18 .6 9.9 7.5 16 .6 7.5 14 .4 3.5 12 .7 10 .5 9 .1 12.7 4.2 12 .6 5.5 8.8 0.7 19 .7 (20.5) 15 .6 Source: Berkshire Hathaway CCC-Boroson 1 (1- 44) 8/28/ 01 1:26 PM Page 11 THE ACHIEVEMENT OF WARREN BUFFETT Perhaps other investors have made more money Author John Train, in his latest... CCC-Boroson 1 (1- 44) 8/28/ 01 1:26 PM Page 23 CHAPTER 4 The Influence of Benjamin Graham U.S Steel sold for $262 on September 3, 19 29 On July 8, 19 32, it sold for $22 General Motors fetched $73 on September 3, 19 29 On July 8, 19 32, it was down to $8 Montgomery Ward was $13 8 in 19 29 In 19 32, it was $4 AT&T was $304 in 19 29 In 19 32 it was $72 Those were the better stocks Some of the very worst stocks were... be the greatest investor of our time Warren Boroson Glen Rock, N.J CCC-Boroson 1 (1- 44) 8/28/ 01 1:26 PM Page 1 CHAPTER 1 It’s Easy to Invest like Warren Buffett uying shares of Berkshire Hathaway is the easiest way to invest like Warren Buffett While the A shares cost around $70,000 apiece as of this writing, the B shares sell for only around $2,300 each— roughly 1/ 30 of the A shares The B shares do... 63 18 .4 4.7 Longleaf Partners Yes 50 19 .3 3.2 Vontobel U.S Value Yes 67 19 .3 3.6 *Based on 50% or less of stocks Data Source: Morningstar CCC-Boroson 1 (1- 44) 8/28/ 01 1:26 PM Page 7 A SENSIBLE SOLUTION A Sensible Solution All in all, a sensible solution for a Warren Wannabe is to own: • Some shares of Berkshire Hathaway • Some of the individual stocks that Berkshire owns, or other Buffett -like stocks. .. CCC-Boroson 1 (1- 44) 8/28/ 01 1:26 PM Page 3 BUYING BUFFETT -LIKE MUTUAL FUNDS somewhat outdated, but, again, most of these value stocks should remain reasonably priced You might also balance your portfolio by concentrating on stocks in industries outside the ones you already have covered in your Buffett -like portfolio, along with foreign stocks, which Buffett also tends to avoid For suggestions of foreign stocks. .. that seem Buffett- oriented 7 CCC-Boroson 1 (1- 44) 8/28/ 01 1:26 PM Page 8 CCC-Boroson 1 (1- 44) 8/28/ 01 1:26 PM Page 9 CHAPTER 2 The Achievement of Warren Buffett arren Buffett is widely acknowledged to be the best investor of our time When John C Bogle, founder of the Vanguard Group, named three investors who seem to have been able to beat the market because of their special gifts, they were Buffett, ... individuals One person who harbors doubts about Buffett s abilities is 13 CCC-Boroson 1 (1- 44) 8/28/ 01 1:26 PM Page 14 14 THE ACHIEVEMENT OF WARREN BUFFETT Larry E Swedroe, an advocate of index funds and the author of What Wall Street Doesn’t Want You to Know (New York: St Martin’s Press, 20 01) He professes himself to be an “agnostic” regarding Buffett Certainly Buffett s long-term record is impressive,... % OF ASSETS Berkshire Hathaway A 31. 43 U.S Treasury note 6 .12 5% 14 .98 Freddie Mac 13 .09 First Third Bancorp 10 .23 Progressive 7.88 U.S Treasury note 5.5% 6. 51 Harley-Davidson 4.00 U.S Bancorp 2.47 Household International 1. 79 National Commerce Bancorp 0.58 Mercantile Bankshares 0.27 Data Source: Morningstar CCC-Boroson 1 (1- 44) 8/28/ 01 1:26 PM Page 5 BUYING BUFFETT -LIKE MUTUAL FUNDS strategy is to compare . Gunslinger 97 16 Be Businesslike 11 5 17 Admit Your Mistakes and Learn from Them 12 1 18 Avoid Common Mistakes 12 7 19 Don’t Overdiversify 13 5 20 Quick Ways to Find Stocks That Buffett Might Buy 14 1 21 William. Gustin-Piazza J.K. Lasser’s Pick Stocks Like Warren Buffett by Warren Boroson CCC-Boroson FM (i-x) 8/28/ 01 1:25 PM Page ii J.K. LASSER’S™ PICK STOCKS LIKE WARREN BUFFETT Warren Boroson John Wiley. www.Wiley.com fcopyebk.qxd 10 /10 / 01 5:00 PM Page iv Contents Introduction: What Investors Can Learn from Warren Buffett vii 1 It’s Easy to Invest like Warren Buffett 1 2 The Achievement of Warren Buffett 9 3 Buffett: