WEB:The Oracle of Omaha- Warren Buffett
- MichaelC_AU
- MichaelC_AU
- MichaelC_AU
- Hugs
- Thruhiker
- Thruhiker
- matttheduck
- MichaelC_AU
- Thruhiker
- MichaelC_AU
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» MichaelC_AU - Ok
Sure we'll have to come up with a bet. But time frames will be a factor. I'm thinking like 10 years annualized return of your one or two picks against BRKb. It would be interesting hard to keep up with over ten years. We could bet for 5 and ten with yearly updates!-- posted by MichaelC_AU
» MichaelC_AU - AOL and E-Trade no sure bet.
One day you will pay for ignoring PE!! It is like buying counterfeit stock certificates.There are many hurdles for AOL. What happens when everyone has cable internet connections? It won't be easy for AOL to compete with the existing communication structures. And there will be dozens of such challenges long term, that is important to consider since it will be 100 years or more on AOL's payout ratio.
E-trade might be better. It seems to have a slightly clearer future. One day it might actually be worth twice of what Merrill Lynch's current 27 Billion Market cap. At 10 billion E-trade might be a bargain if earnings can appear to substantiate a 54 billion market cap in the next 20 years. But that would be over $2 billion in earnings.
Hate to spoil your party with the facts.
-- posted by MichaelC_AU
» MichaelC_AU - Dilly Bar
Would you rather have a can of Coke or a Dilly Bar. See Warren's point. He acquired 100% of Dairy Queen for, (I don't know) probably between 7 and 17 PE and it has some degree of Coke like recognition, a bargain, when you consider Coke is trading at 54 PE.By the way Mr. Buffett bought $1 Billion in Coke(KO) in the 80's after the new Coke fiasco. It has gone up at least 20 times since, about 26% annualized.
In stocks patience pays not voodoo speculation!
You often have to buy the gem that everyone is walking over not the one in the limelight!
-- posted by MichaelC_AU
» Thruhiker - SCHOOL IS IN SESSION
A brief lesson from Professor Peter Lynch (not that the internet stock haters are gonna pay attention...)"Stock picking is an ART and a SCIENCE. If it just a SCIENCE only the CPA's would get rich."
I'm a CPA. And when I first starting picking individual stocks I relied on my training. PE was THE most important thing that I looked at. And I gotta admit it worked pretty well when it came to analyzing banking stocks.
But as I became more experienced I started to understand the art part of the equasion. The science part is easy to understand. The art part isn't. But Peter Lynch is right...ya gotta look at both.
So PE is useful. But it ain't the Holy Grail. And those who think it is are gonna miss out on the GIANT winners...the 30-40-50 baggers.
-- posted by Thruhiker
» matttheduck - aol & cable
michael, i'm glad you raised the issue of aol and cable connections. it's not the first time its been raised. it has never been raised around suite 101 with an explanation of how everyone being able to access aol more quickly is going to hurt aol. i'd like your explanation of that.-- posted by matttheduck
» MichaelC_AU - Re: Diamonds
Sorry, that gem metaphor is overused, there is nothing like a good example or two.There is a lot to the way WEB picks his stocks, that we can learn from. The two that I mentioned, buy what you know and always look for a value are part of it. He studied under the ones that wrote the book on value investing and has his own twist on the text books they wrote.
The Motley Fool and Peter Lynch are also similar in their approaches.
Buffett has averaged 24%/yr since the 60's, with out Microsoft, AOL, IBM, or other stocks that he nor we fully understand.
-- posted by MichaelC_AU
» MichaelC_AU - Re: AOL and Cable
The AOL and Cable part was just an example of what these companies face in a rapidly evolving market.As Brinker keeps saying half of these companies will not be around in ten years.
Concerning AOL and cable; I think this is a major concern for the company. They are in the middle of a massive campaign to provide their own high speed access, but I think that the Baby Bells and Cable Companies have an advantage over AOL. Maybe AOL will choose to buddy up with the Bells or maybe a court ruling will allow AOL use of the existing communication infastructure, as is the case in the power industry, and they will manage to survive. MY POINT IS THAT NOBODY KNOWS!!!
In contrast, before Berkshire Hathaway became the $100 Billion pound canary, Buffett could lie in wait until he found a stock selling so cheap that there was very little downside risk. And yes THRUHIKER, he would look at other things besides PE, especially the CEO's philosphy, and business prospects. He would look for companies with very small operating assets to fare well in inflationary times. But to forget about PE is like buying anything without considering its price, very stupid!
These were non-lemming feats such as buying Coke when we were dumping it.
I really think that the only way you can consistantly beat an index fund is through fundamental investing, that is what the Motley Fool, Peter Lynch, and Warren Buffett have and continue to do. You can ride a wild wave like the internet stocks, but it is just one trend. What are you going to do next?
You are correct thruhiker, PE is not everything, but thowing PE out completely is like driving blindfolded!
-- posted by MichaelC_AU
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