buffet to logy

8/2/2019 Buffet to Logy

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BuffettologyHow $105,000 Turned into $30

Billion


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Agenda

Why Warren Does Not play the stock Market.

How Warren Makes Good Profit out of BadNews About a Company

How Warren Exploits the MarketsShortsightedness

How Companies make investors rich, theinterplay between ROE and Inventory Turnover

The Type of Businesses Warren Fears andAvoids.

The Kinds of businesses Warren Loves


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Using Warrens Investment Methods to avoid the next hightech Massacre

Interest Rate and Stock Prices

Solving the Puzzle of the Bear/Bull Market and howWarren uses it to his advantage.

How Warren Discerns Buying opportunities others Miss

Where Warren Discovers Companies with Hidden Wealth

Financial Information: Warrens Secrets for Using theinternet to Beat the Wall Street.

Warrens Checklist for Potential Investments. The 10Points of light

How to Determine when a Privately Held Business can bea bonanza.

Warrens Secret Formula for Getting out at the MarketTop.


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Where is Warren Investing Now

Stock Arbitrage: Warrens Best kept secret

for Wealth Building.

Warren Buffets Mathematical Equations

for Uncovering Great Businesses

Thinking the Way Warren Does: The CaseStudies of his most recent Investments

Putting Buffettology to work for you


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Why Warren Does Not play thestock Market.

Warren Does not play the stock market. He is not interested in Current Trends. Does not chart stock prices.

Does not participate in Momentum trading. Warren got super rich not by playing the stock

market but by playing the people and institutionswho play the stock market.

95% of market participants are short sighted. Short Sighted mentality undervalues the long

term prospects of a great business. Warren Buys on Bad News


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How Warren Makes Good Profit outof Bad News About a Company

Selective Contrarian Investment Strategy

Short sightedness of the Mutual Fundbeast.

How Mr Market Helped Buffet to Get Rich.

Companies that have durable competitive

advantage have the economic power topull through out of most bad situations.


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How Warren Exploits the Markets

Shortsightedness

Sports Technique of Baseball Great TedWilliams

Warren looks at businesses into twocategories: Durable competitive advantageand price competitive commoditybusinesses.


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How Companies make investorsrich, the interplay between ROE

and Inventory Turnover Best kind of business to own is one with

high ROE and high Inventory Turnover

Ratio. Second best is a business with either one

of the two above.

Avoid if both are low.


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The Type of Businesses WarrenFears and Avoids.

Internet Portal Internet Service Providers Memory Chip Manufacturers

Airlines Producers of raw food stuff like rice and corn Steel Producers Gas and oil companies

Lumber Industry Paper Manufacturers Automobile Manufacturers.


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AVOID

Price competative businesses regardlessof how great the buying opportunity looks.

They lack the economic might that willensure that they survive downturns.

They carry the additional burden of debtbecause they can only remain in businessby continuously upgrading their PP&E

Th Ki d f b i W


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The Kinds of businesses WarrenLoves

Determine the competitive advantage of thecompany and the durability of the competitiveadvantage.

Producing a unique product or providing aunique service.

That product or service must have durability.

Companies like Intel mat have competitiveadvantage but they lack durable competitiveadvantage.

U i W I t t


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Using Warrens Investment

Methods to avoid the next high tech

Massacre Lack of historical durable competative

advantage keeps Warren from investing in

emerging industries. Is it wise to buy the company as a whole?

If the entire company is not worth investing

then it is not worth even to buy a singleshare.


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Interest Rate and Stock Prices

Will I get a better rate of return if I investedin bonds than in the stock of thiscompany?

Interest rate goes down stock prices goup.

S l i th P l f th B /B ll


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Solving the Puzzle of the Bear/BullMarket and how Warren uses it to

his advantage. Identify the buying opportunity: A goodcompany makes a bad investment if youpaid too much.

Bull/Bear Market cycles, Industryrecessions, Individual calamities,Structural changes and War

H W Di B i


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How Warren Discerns Buyingopportunities others Miss

Industry recessions hurts everyone theweak perish but the strong survive.

Individual Calamities: When greatcompanies do something stupid.

Structural Changes

War


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Where Warren DiscoversCompanies with Hidden Wealth

Durable advantage is created throughcompetitive struggle.

Brand name fast food

Patented Prescription drugs.

Branded food items.

Branded Beverages Branded Toiletries/Home Products.

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