There are people who believe they can beat the market by trading in and out of the market. They could not appreciate, nor could they be taught the beauty and simplicity of buying a good business managed by a good management and sold at a reasonable price, and holding them for a long time. The performance will take care of itself if one does that. Too often we see people recommending buying this and selling that because there is a 20% gain or loss. I usually found report like that skeptical and I am curious how successful the recommender is in managing their own money. Is he or she more successful than Warren Buffett?
Investing is not science, so do pretend it to be. One can easily stretch or shrink a 20% estimate of intrinsic value by changing an assumption here and there.
Warren Buffett, the greatest investor of our times has practiced buy-and-hold strategy for the past 50+ years, has advised young people recently to invest in index fund and don’t try to outsmart the market.
Of course, investing in an index fund is not exactly what Buffett did to make his fortune. You have to take Buffett’s advice there with a grain of salt. Buffett makes money in many ways, more and more his Berkshire Hathaway is becoming a collection of operating businesses. Still, equity investing is still very important component of his wealth-generating machine. As of March 31, 2010, Berkshire owns about $51 billion in 36 US-traded stocks. Click here for a complete list.
Perhaps a young person can learn a thing or two from Bill Gates, the founder, former Chairman and CEO of Microsoft Corp.. Gates has hired a very capable manager by the name of Michael Larson to manage his personal wealth and that of Bill & Melinda Gates foundation. A young person can hire a capable investment manager to manage his/her money. Unfortunately, Larson is out of the question as he is pretty happy to have the Gates as his sole client.
GuruFocus tracks a host of renowned investment managers, some of them, such as Bruce Berkowitz and Donald Yacktman, who manage mutual funds and have a pretty good track record, and their funds are quite accessible.
For the brave souls who want to manage their own money by buying individual stocks, GuruFocus has a host of tools to help you. We believe you could start by reading these articles:
Because we believe the concept of Business Predictability is highly relevant in stock selecting. GuruFocus also feature a number of screeners based on this concept:
Back to Buffett and Gates, GuruFocus also made it easy to find out what stocks they both own. Using the Aggregated Guru Portfolio function and selecting Warren Buffett and Bill Gate, one can find that the two own these stocks in common:
The CocaCola Company (KO, Financial)
The Coca-Cola Company is the world's largest beverage company and is the producer and marketer of soft drinks. The Cocacola Company has a market cap of $120.89 billion; its shares were traded at around $52.4 with a P/E ratio of 16.4 and P/S ratio of 4. The dividend yield of The Cocacola Company stocks is 3.3%. The Cocacola Company had an annual average earning growth of 8.9% over the past 10 years. GuruFocus rated The Cocacola Company the business predictability rank of 3.5-star.
Buffett owns 200,000,000 shares for a long time. The stock accounts for 21.6% of the $50.93 billion portfolio of Berkshire Hathaway. Bill Gates owns 10,182,000 shares as of 03/31/2010, an increase of 52.38% from the previous quarter. This position accounts for 4.42% of the $12.66 billion portfolio of Bill & Melinda Gates Foundation Trust.
WalMart Stores Inc. (WMT, Financial)
Wal-Mart Stores, Inc. is the world's largest retailer. Walmart Stores Inc. has a market cap of $183.37 billion; its shares were traded at around $49.43 with a P/E ratio of 13.2 and P/S ratio of 0.4. The dividend yield of Walmart Stores Inc. stocks is 2.5%. Walmart Stores Inc. had an annual average earning growth of 11.1% over the past 10 years. GuruFocus rated Walmart Stores Inc. the business predictability rank of 5-star.
Buffett owns 39,037,142 shares as of 03/31/2010, which accounts for 4.26% of the $50.93 billion portfolio of Berkshire Hathaway. Gates owns 9,253,000 shares as of 03/31/2010, an increase of 94.68% from the previous quarter. This position accounts for 4.06% of the $12.66 billion portfolio of Bill & Melinda Gates Foundation Trust.
Costco Wholesale Corp. (COST, Financial)
Costco Wholesale Corp. operates membership warehouses. Costco Wholesale Corp. has a market cap of $24.75 billion; its shares were traded at around $56.19 with a P/E ratio of 20 and P/S ratio of 0.3. The dividend yield of Costco Wholesale Corp. stocks is 1.5%. Costco Wholesale Corp. had an annual average earning growth of 7.8% over the past 10 years. GuruFocus rated Costco Wholesale Corp. the business predictability rank of 5-star.
Buffett owns 4,333,363 shares as of 03/31/2010, which accounts for 0.51% of the $50.93 billion portfolio of Berkshire Hathaway. Gates owns 6,128,000 shares as of 03/31/2010, which accounts for 2.89% of the $12.66 billion portfolio of Bill & Melinda Gates Foundation Trust.
Exxon Mobil Corp. (XOM, Financial)
Exxon Mobil Corporation's principal business is energy, involving exploration for, and production of, crude oil and natural gas, manufacturing of petroleum products and transportation and sale of crudeoil, natural gas and petroleum products. Exxon Mobil Corp. has a market cap of $299.68 billion; its shares were traded at around $58.78 with a P/E ratio of 13.3 and P/S ratio of 0.9. The dividend yield of Exxon Mobil Corp. stocks is 3%. Exxon Mobil Corp. had an annual average earning growth of 11.2% over the past 10 years. GuruFocus rated Exxon Mobil Corp. the business predictability rank of 3.5-star.
Buffett owns 421,800 shares as of 03/31/2010, which accounts for 0.06% of the $50.93 billion portfolio of Berkshire Hathaway. Gates owns 6,285,000 shares as of 03/31/2010, an increase of 46.67% from the previous quarter. This position accounts for 3.32% of the $12.66 billion portfolio of Bill & Melinda Gates Foundation Trust.
M&T Bank Corp. (MTB, Financial)
M&T Bank Corp is a bank holding company. They have two primary bank subsidiaries: Manufacturers and Traders Trust Company and M&T Bank, National Association. M&t Bank Corp. has a market cap of $10.73 billion; its shares were traded at around $90.23 with a P/E ratio of 24.7 and P/S ratio of 2.9. The dividend yield of M&t Bank Corp. stocks is 3.1%. M&t Bank Corp. had an annual average earning growth of 1.3% over the past 10 years.
Buffett owns 5,563,281 shares as of 03/31/2010, which accounts for 0.87% of the $50.93 billion portfolio of Berkshire Hathaway. Gates owns 999,998 shares as of 03/31/2010, which accounts for 0.63% of the $12.66 billion portfolio of Bill & Melinda Gates Foundation Trust.
Republic Services Inc. (RSG, Financial)
Republic Services, Inc., is a provider of services in the domestic non-hazardous solid waste industry. Republic Services Inc. has a market cap of $11.68 billion; its shares were traded at around $30.6 with a P/E ratio of 20.1 and P/S ratio of 1.4. The dividend yield of Republic Services Inc. stocks is 2.5%. Republic Services Inc. had an annual average earning growth of 10.3% over the past 10 years. GuruFocus rated Republic Services Inc. the business predictability rank of 4.5-star.
Buffett owns 10,827,700 shares as of 03/31/2010, an increase of 30.6% from the previous quarter. This position accounts for 0.62% of the $50.93 billion portfolio of Berkshire Hathaway. Gates owns 1,350,000 shares as of 03/31/2010, which accounts for 0.31% of the $12.66 billion portfolio of Bill & Melinda Gates Foundation Trust.
Conclusion
From the largest soft drink company, the largest retailer, the largest oil & gas company, to one of the largest garbage collector, Warren Buffett and Bill Gates have each collected a portfolio of successful businesses.
Pay attention to the high business predictabilities that these companies carry. You have to agree with me that predictability is highly relevant in their stock selecting.
GuruFocus provides real time information and insights of Investment Gurus such as Warren Buffett and Bill Gates for Premium Members. If you are not a premium member, click here to sign up or upgrade. 7-Day Free Trial is available.
Investing is not science, so do pretend it to be. One can easily stretch or shrink a 20% estimate of intrinsic value by changing an assumption here and there.
Warren Buffett, the greatest investor of our times has practiced buy-and-hold strategy for the past 50+ years, has advised young people recently to invest in index fund and don’t try to outsmart the market.
Of course, investing in an index fund is not exactly what Buffett did to make his fortune. You have to take Buffett’s advice there with a grain of salt. Buffett makes money in many ways, more and more his Berkshire Hathaway is becoming a collection of operating businesses. Still, equity investing is still very important component of his wealth-generating machine. As of March 31, 2010, Berkshire owns about $51 billion in 36 US-traded stocks. Click here for a complete list.
Perhaps a young person can learn a thing or two from Bill Gates, the founder, former Chairman and CEO of Microsoft Corp.. Gates has hired a very capable manager by the name of Michael Larson to manage his personal wealth and that of Bill & Melinda Gates foundation. A young person can hire a capable investment manager to manage his/her money. Unfortunately, Larson is out of the question as he is pretty happy to have the Gates as his sole client.
GuruFocus tracks a host of renowned investment managers, some of them, such as Bruce Berkowitz and Donald Yacktman, who manage mutual funds and have a pretty good track record, and their funds are quite accessible.
For the brave souls who want to manage their own money by buying individual stocks, GuruFocus has a host of tools to help you. We believe you could start by reading these articles:
- What Worked in the Market In the Decade of 2000-2009?
- What worked in the marketfrom 1998-2008? Part I: Predictability Rank
- What worked in the market from 1998-2008? Part II: Role of Valuations, Under-Valued Predictable Companies and Buffett-Munger Screener
- What worked in the market from 1998-2008? Intrinsic Value, Discounted Cash Flow and Margin of Safety
- GuruFocus Research: What worked in the market from 1998-2008? Revisiting Business Predictability
Because we believe the concept of Business Predictability is highly relevant in stock selecting. GuruFocus also feature a number of screeners based on this concept:
Back to Buffett and Gates, GuruFocus also made it easy to find out what stocks they both own. Using the Aggregated Guru Portfolio function and selecting Warren Buffett and Bill Gate, one can find that the two own these stocks in common:
The CocaCola Company (KO, Financial)
The Coca-Cola Company is the world's largest beverage company and is the producer and marketer of soft drinks. The Cocacola Company has a market cap of $120.89 billion; its shares were traded at around $52.4 with a P/E ratio of 16.4 and P/S ratio of 4. The dividend yield of The Cocacola Company stocks is 3.3%. The Cocacola Company had an annual average earning growth of 8.9% over the past 10 years. GuruFocus rated The Cocacola Company the business predictability rank of 3.5-star.
Buffett owns 200,000,000 shares for a long time. The stock accounts for 21.6% of the $50.93 billion portfolio of Berkshire Hathaway. Bill Gates owns 10,182,000 shares as of 03/31/2010, an increase of 52.38% from the previous quarter. This position accounts for 4.42% of the $12.66 billion portfolio of Bill & Melinda Gates Foundation Trust.
WalMart Stores Inc. (WMT, Financial)
Wal-Mart Stores, Inc. is the world's largest retailer. Walmart Stores Inc. has a market cap of $183.37 billion; its shares were traded at around $49.43 with a P/E ratio of 13.2 and P/S ratio of 0.4. The dividend yield of Walmart Stores Inc. stocks is 2.5%. Walmart Stores Inc. had an annual average earning growth of 11.1% over the past 10 years. GuruFocus rated Walmart Stores Inc. the business predictability rank of 5-star.
Buffett owns 39,037,142 shares as of 03/31/2010, which accounts for 4.26% of the $50.93 billion portfolio of Berkshire Hathaway. Gates owns 9,253,000 shares as of 03/31/2010, an increase of 94.68% from the previous quarter. This position accounts for 4.06% of the $12.66 billion portfolio of Bill & Melinda Gates Foundation Trust.
Costco Wholesale Corp. (COST, Financial)
Costco Wholesale Corp. operates membership warehouses. Costco Wholesale Corp. has a market cap of $24.75 billion; its shares were traded at around $56.19 with a P/E ratio of 20 and P/S ratio of 0.3. The dividend yield of Costco Wholesale Corp. stocks is 1.5%. Costco Wholesale Corp. had an annual average earning growth of 7.8% over the past 10 years. GuruFocus rated Costco Wholesale Corp. the business predictability rank of 5-star.
Buffett owns 4,333,363 shares as of 03/31/2010, which accounts for 0.51% of the $50.93 billion portfolio of Berkshire Hathaway. Gates owns 6,128,000 shares as of 03/31/2010, which accounts for 2.89% of the $12.66 billion portfolio of Bill & Melinda Gates Foundation Trust.
Exxon Mobil Corp. (XOM, Financial)
Exxon Mobil Corporation's principal business is energy, involving exploration for, and production of, crude oil and natural gas, manufacturing of petroleum products and transportation and sale of crudeoil, natural gas and petroleum products. Exxon Mobil Corp. has a market cap of $299.68 billion; its shares were traded at around $58.78 with a P/E ratio of 13.3 and P/S ratio of 0.9. The dividend yield of Exxon Mobil Corp. stocks is 3%. Exxon Mobil Corp. had an annual average earning growth of 11.2% over the past 10 years. GuruFocus rated Exxon Mobil Corp. the business predictability rank of 3.5-star.
Buffett owns 421,800 shares as of 03/31/2010, which accounts for 0.06% of the $50.93 billion portfolio of Berkshire Hathaway. Gates owns 6,285,000 shares as of 03/31/2010, an increase of 46.67% from the previous quarter. This position accounts for 3.32% of the $12.66 billion portfolio of Bill & Melinda Gates Foundation Trust.
M&T Bank Corp. (MTB, Financial)
M&T Bank Corp is a bank holding company. They have two primary bank subsidiaries: Manufacturers and Traders Trust Company and M&T Bank, National Association. M&t Bank Corp. has a market cap of $10.73 billion; its shares were traded at around $90.23 with a P/E ratio of 24.7 and P/S ratio of 2.9. The dividend yield of M&t Bank Corp. stocks is 3.1%. M&t Bank Corp. had an annual average earning growth of 1.3% over the past 10 years.
Buffett owns 5,563,281 shares as of 03/31/2010, which accounts for 0.87% of the $50.93 billion portfolio of Berkshire Hathaway. Gates owns 999,998 shares as of 03/31/2010, which accounts for 0.63% of the $12.66 billion portfolio of Bill & Melinda Gates Foundation Trust.
Republic Services Inc. (RSG, Financial)
Republic Services, Inc., is a provider of services in the domestic non-hazardous solid waste industry. Republic Services Inc. has a market cap of $11.68 billion; its shares were traded at around $30.6 with a P/E ratio of 20.1 and P/S ratio of 1.4. The dividend yield of Republic Services Inc. stocks is 2.5%. Republic Services Inc. had an annual average earning growth of 10.3% over the past 10 years. GuruFocus rated Republic Services Inc. the business predictability rank of 4.5-star.
Buffett owns 10,827,700 shares as of 03/31/2010, an increase of 30.6% from the previous quarter. This position accounts for 0.62% of the $50.93 billion portfolio of Berkshire Hathaway. Gates owns 1,350,000 shares as of 03/31/2010, which accounts for 0.31% of the $12.66 billion portfolio of Bill & Melinda Gates Foundation Trust.
Conclusion
From the largest soft drink company, the largest retailer, the largest oil & gas company, to one of the largest garbage collector, Warren Buffett and Bill Gates have each collected a portfolio of successful businesses.
Pay attention to the high business predictabilities that these companies carry. You have to agree with me that predictability is highly relevant in their stock selecting.
GuruFocus provides real time information and insights of Investment Gurus such as Warren Buffett and Bill Gates for Premium Members. If you are not a premium member, click here to sign up or upgrade. 7-Day Free Trial is available.
