WEB:The Oracle of Omaha- Warren Buffett
- MichaelC_AU
- Thruhiker
- ourisman
- MichaelC_AU
- DennisL
- MichaelC_AU
- TONYBRIG
- MichaelC_AU
- MichaelC_AU
- MichaelC_AU
This archived discussion is "read only".
For the corresponding "live" discussions, post in the active topic forum here.
« Previous 1 2 3 4 5 6 7 8 9 Next »
» MichaelC_AU - Rule #2, VALUE
It is foolish to pick the internet at infinity PE. Anyway there is no sure play on the internet. Even if you thought Yahoo would be around, Yahoo is priced higher than its next 50 years of earnings! Good luck at the craps table!I pretty much agree with Mr. Buffett on his comment about the Dilly bar.
PE is very important! What else are you buying when you are buying a stock if not future earnings.
-- posted by MichaelC_AU
» ourisman - what new paradigm?
What is a company worth? In the short term, it may be worth whatever someone is willing to spend for it. But in the long term, people go into business to make money... I don't see how any other paradigm can work for long.Would you buy a money-losing travel agency [priceline.com] for more than you'd pay for the country's three largest airlines?
Would you buy a money-losing toy store [eToy] for more than you'd pay for Toys R Us or Mattel?
How can you pay those prices and ever hope to make money? As an owner, you're subsidizing a money-losing company.
By selling NYTimes best-sellers at a loss (Amazon), you're making gifts to your customers. Is this why anyone goes into business?
I agree that the Internet is a new paradigm for a medium in which business is done, and it obviously has tremendous potential. But Internet investing as it is currently being done doesn't represent a new paradigm for how to make money in the long term, at least not in my book.
-- posted by ourisman
» MichaelC_AU - Short yahoo
First of all shorts are not my kind of buy and hold investment!Second, I would not want to bet against the stupidity of all the, never invested until now, baby boomers, who are trying to make up for all of 30 years of under investing with a 3 month investment in AOL.
-- posted by MichaelC_AU
» DennisL - David O.,
I agree with what you said. In your last paragraph, you used the word "potential." I think that those who are investing long term in Internet companies are betting on that potential. For sure, it's not for the faint of heart because it is going to be quite some time before any of that potential is realized, if it is ever realized. The potential may not be realized because, as that Barons "amazon.bomb" article said, these .com companies are just middlemen, and who needs middlemen? Most people, given the opportunity, will buy directly from the company selling the good or service that the people want. Even if that direct purchase is done via the company's Web site, there is no middleman, the company makes profit, and the customer gets great convenience and a great price.-- posted by DennisL
» MichaelC_AU - BRK.A worth $90,000 per share?
An analyst, after considering Berkshire's insurance business, values the company's primary shares in excess of $90,000. BRKa now at $71,000 /share has never experienced a stock split since Warren Buffett gained control in the late 1960's, when it was trading in the low double digits.Article:
http://www.pathfinder.com/fortune/invest...
I really don't think anyone knows how much the stock is really worth, but the general consensus for years has been that Berkshire Hathaway is virtually an over priced closed end mutual fund selling way above its net asset value. Brokers have scoffed at BRK even through its run from $1000/share in the 80's. BRK investors have even conceeded that you are paying a premium for the world's best investment manager, but maybe after a look at the complicated analysis I mentioned above I will be convinced it is undervalued.
-- posted by MichaelC_AU
» 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
« Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 Next »
Please follow the guidelines set forth in the Suite101 Posting Etiquette when adding to the discussion.