Another Munger-ism around Berkshire System
Saturday, 26 September 2015
Tuesday, 22 September 2015
Top Twelve Investment Munger - ism
I recently found an investment writer who works for Microsoft by the name of Tren Griffin. This guy has found the top twelve investment Mungerism you should read about.
Go check out a copy of his book :
Take a look and tell me what you think at help@tyronerichards.com
Focus Investment InSight.
Go check out a copy of his book :
Take a look and tell me what you think at help@tyronerichards.com
Focus Investment InSight.
Monday, 14 September 2015
The Art of Great Investing
I was away from writing my blog for a little while, but I am back now. Today I will talk about the art of great investing as simple ideas executed with patience.
I can't but to mention Warren Buffett's simple idea finding cash generating business and being patient with time to build Berkshire Hathaway, and can you believe some fifty years after buying a saggy cotton fabric producing factory in Adams, Massachusetts it has become a cash generating unit capable of financing the any business venture. I dare to say, the bigger the business the better for Berkshire and Buffett.
Buffett was a business stripper and an asset raider searching for cash or cheap float to redeploy and grow like a rolling snowball gathering mass. He is like a tortoise, patient and long living.
But here is an example of a different kind of simple ideas executed with patience by James Tisch. James Tisch calls it his Five Million Test (PDF).
I can't but to mention Warren Buffett's simple idea finding cash generating business and being patient with time to build Berkshire Hathaway, and can you believe some fifty years after buying a saggy cotton fabric producing factory in Adams, Massachusetts it has become a cash generating unit capable of financing the any business venture. I dare to say, the bigger the business the better for Berkshire and Buffett.
Buffett was a business stripper and an asset raider searching for cash or cheap float to redeploy and grow like a rolling snowball gathering mass. He is like a tortoise, patient and long living.
A tortoise
Saturday, 29 August 2015
Thursday, 13 August 2015
What is Warren Bufett buying these days?
- Warren Buffett, chairman of Berkshire Hathaway,
Another grand announcement and media chase for Warren Buffett in his economic castle building pursuit with his mega-spending exercise. $37 Billion for Precision Castparts? He clearly paid premium in this case and that is not normal as he much rather deep discount value investing, but this time around he is talking about earning growth. Funny he is into the airline business again.
I recall him talking about calling a 1-800 number to get counsel on not getting into the airline business again. This time is different and surely don't rhyme with his last airline business investment. The barriers of entry is huge and the aerospace industry requires massive human capital for any possible competition to get a leg up on Precision Castparts.
My interest would to see how this mega merger is structured. In a low interest environment Mr. Buffett has secured a $10 Billion loan to assist with acquisition and just maybe the rest will come from insurance float.
Buffett is constantly growing the Berkshire Hathaway conglomerate and mapping up some ordinary business with extraordinary economic defense around their economic castle. His personal jet "The Indefensible" now has a home and Net Jet has a sugar daddy to take care of them both.
Sunday, 2 August 2015
Ten Alternative Asset Classes for Investment Selection (Part Two)
My last blog spoke about alternative asset classes for investment selection in a broad way in terms of the options available and I listed some of major alternatives available for capital allocation.
The investment option of particular interest to me is the sovereign wealth funds (SWF) and its management and investment selection.
Sovereign fund wealth would appear to form part of an political agenda for the SWF controlling interest and by that I mean the government since most sovereign is owned by the governments in some form of pension fund or some other organized structure.
The politics of it is the Chinese/United States exchange. The Chinese moves into Africa peacefully to build out road network and target infrastructure development while at the same time finding work for four hundred million Chinese nationals into these areas of operations i.e. Ethiopia, Kenya, and Jamaica. The Chinese do this without the threat of war and they don't give a rat's ass about your local conditions, except to provide an appeasing response to a request to help further their cause. The US strategy is somewhat different.
The Americans enters these post Chinese entrance countries and present rhetoric of human rights breaches and corruption as being the root cause for low to no economic growth in these countries i.e. Ethiopia, Kenya and Jamaica. These arguments threaten to disrupt the existing relationship with the Chinese investments in these countries. The Chinese is not looking at population size and distribution channels coming from one place all at once and doesn't seems to be focusing on a mass market model in a concentrated manner, but the Chinese instead appears to like a disperse multiple market model concentrated by continent.
The Chinese is not about rhetoric and seek to make progress to advance their race. Their SWF sets the tone of their intentions and it also accounts for their economic growth too. Their economic success is not only as a result of internal economic growth. Their growth is also what comes from their SWF invested internationally.
(btw) My book of the day is: The China Challenge
What is the Jamaican strategy going forward?
Share and like with ten of your friends.
FII
The investment option of particular interest to me is the sovereign wealth funds (SWF) and its management and investment selection.
- What informs how it is managed?
- How the investment decision is made?
- What kind of returns is expected from a sovereign wealth fund investment?
- Who benefits the most from the capital assets deployed?
Sovereign fund wealth would appear to form part of an political agenda for the SWF controlling interest and by that I mean the government since most sovereign is owned by the governments in some form of pension fund or some other organized structure.
The politics of it is the Chinese/United States exchange. The Chinese moves into Africa peacefully to build out road network and target infrastructure development while at the same time finding work for four hundred million Chinese nationals into these areas of operations i.e. Ethiopia, Kenya, and Jamaica. The Chinese do this without the threat of war and they don't give a rat's ass about your local conditions, except to provide an appeasing response to a request to help further their cause. The US strategy is somewhat different.
The Americans enters these post Chinese entrance countries and present rhetoric of human rights breaches and corruption as being the root cause for low to no economic growth in these countries i.e. Ethiopia, Kenya and Jamaica. These arguments threaten to disrupt the existing relationship with the Chinese investments in these countries. The Chinese is not looking at population size and distribution channels coming from one place all at once and doesn't seems to be focusing on a mass market model in a concentrated manner, but the Chinese instead appears to like a disperse multiple market model concentrated by continent.
The Chinese is not about rhetoric and seek to make progress to advance their race. Their SWF sets the tone of their intentions and it also accounts for their economic growth too. Their economic success is not only as a result of internal economic growth. Their growth is also what comes from their SWF invested internationally.
(btw) My book of the day is: The China Challenge
What is the Jamaican strategy going forward?
Share and like with ten of your friends.
FII
Tuesday, 21 July 2015
Ten Alternative Asset Classes for Investment Selection (Part One)
I found ten alternative asset classes for investment selection or options when exploring capital deployment of your cash consideration. These are all collective investment scheme intended to provide higher than normal yield to the investor with a presumption that an individual investment account may not do as well.
A sovereign wealth fund is not called a wealth fund for no reason. Andrew Ang explains this well. (see video)
Other forms of alternative investment options are not government based investments similar a to sovereign wealth, but are mostly private base investments. A Mutual Fund is a privately held or sponsored collective investment scheme that is organized as a open end fund or closed end fund. In recent years we have seen a cousin of a mutual fund that has seen the birth of the Exchange Traded Fund (ETF).
The cost associated with the different alternative investment schemes does vary and may depend on funds under management or some other variable that determine the fees charged. I never like a managed account. Why? Because without proper control your account can be churned to drive up fees for the manager without consideration for the best return or yield for the investor.
There is also what is called a Family Office that is a little different from most alternative investment and generally more selective and holistic in its investment approach. There are single and multiple family offices. Hedge Funds sometimes start these operations when they no longer need public investors to fund their investment ideas. Hedge fund fees are expensive; the managers will generally take up to twenty percent (20%) of return on investment plus management fees minus operating expenses depending on the strategy used.
Private Equity is slightly different, but have some similarities to other collective investment schemes. You can start a private equity firm too; it is not hard if you know what you are doing. It is not a venture capital fund, but may provide venture capital at times. Then there is also the angel investor who operates a little different from the others.
Finally, we are down to the conglomerate and I just can't help myself but to talk about Berkshire Hathaway ran by Warren Buffett. There are other conglomerate ran by different people, Mr. Prem Watsa runs Fairfax out of Canada.
I hope you find value with my servings.
FII
A sovereign wealth fund is not called a wealth fund for no reason. Andrew Ang explains this well. (see video)
Courtesy of Columbia Business School
The cost associated with the different alternative investment schemes does vary and may depend on funds under management or some other variable that determine the fees charged. I never like a managed account. Why? Because without proper control your account can be churned to drive up fees for the manager without consideration for the best return or yield for the investor.
There is also what is called a Family Office that is a little different from most alternative investment and generally more selective and holistic in its investment approach. There are single and multiple family offices. Hedge Funds sometimes start these operations when they no longer need public investors to fund their investment ideas. Hedge fund fees are expensive; the managers will generally take up to twenty percent (20%) of return on investment plus management fees minus operating expenses depending on the strategy used.
Private Equity is slightly different, but have some similarities to other collective investment schemes. You can start a private equity firm too; it is not hard if you know what you are doing. It is not a venture capital fund, but may provide venture capital at times. Then there is also the angel investor who operates a little different from the others.
Finally, we are down to the conglomerate and I just can't help myself but to talk about Berkshire Hathaway ran by Warren Buffett. There are other conglomerate ran by different people, Mr. Prem Watsa runs Fairfax out of Canada.
I hope you find value with my servings.
FII
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