Following on from my previous posts, given that equity markets are at post-crisis highs currently, it is a useful exercise to sit back and take stock of what this means for me as I prepare to build a portfolio based on value investing principles.
Part of such an exercise should involve a careful study of Warren Buffett
’s latest letter to Berkshire Hathaway shareholders, published on March 1. There has been much discussion online recently suggesting that Buffett is no longer a “true” value investor, given the price paid for Heinz. But the price Buffett paid for his investment in Heinz constituted value for Buffett
. It does not necessarily follow that his
price should also represent value for any other investor – it must be recognized that Buffett is in a unique position as an investor, with accordingly unique requirements in terms of preserving investment capital and earning an adequate return. Continue Reading »