Warren Buffett, Chairman of the Board of Berkshire Hathaway and the second-wealthiest person in the world, met with 80 GSB students in an event organized by the Buffett Club. The Oracle of Omaha very generously gave the students two hours in which he would answer any questions asked of him, and said that no subject matter, from religion, to investing, to personal questions, was off-limits. Mr. Buffett's only request was not to prompt him "to say anything libelous." Following the Q&A session, Mr. Buffett treated the entire group to lunch at Gorat's, the self-proclaimed "World's Best Steakhouse."
Investment Philosophies
When asked which items taught at business schools were most valuable and least valuable in becoming an astute investor, Mr. Buffett struck deep at the GSB's heart by saying he didn't give a lot of credence to the efficient markets theory or the importance of beta. Rather, he said, the first thing he looks for are companies with business models that he could thoroughly understand. This allows him to focus on companies like American Express and Coca-Cola, and excludes some of the higher-technology companies.
To further describe his philosophy, Mr. Buffett explained that his investment decisions are based on identifying significantly undervalued companies that can offer substantial returns in the future. He recounted when he invested in The Washington Post in the early 1970s. At the time the company was valued at $100 million when it fell out of favor with President Nixon. He said, "If an auction for the company was held in the middle of the Atlantic Ocean on a cold winter day, people would swim out to bid at least $500 million for it," based on the Post's newspaper and television station assets. At the time, Mr. Buffett took a 10% position in the firm, which today is worth over $1 billion.
http://www.chibus.com/global_user_elements/printpage.cfm?storyid=954656
By Andrew Van Fossen
Investment Philosophies
When asked which items taught at business schools were most valuable and least valuable in becoming an astute investor, Mr. Buffett struck deep at the GSB's heart by saying he didn't give a lot of credence to the efficient markets theory or the importance of beta. Rather, he said, the first thing he looks for are companies with business models that he could thoroughly understand. This allows him to focus on companies like American Express and Coca-Cola, and excludes some of the higher-technology companies.
To further describe his philosophy, Mr. Buffett explained that his investment decisions are based on identifying significantly undervalued companies that can offer substantial returns in the future. He recounted when he invested in The Washington Post in the early 1970s. At the time the company was valued at $100 million when it fell out of favor with President Nixon. He said, "If an auction for the company was held in the middle of the Atlantic Ocean on a cold winter day, people would swim out to bid at least $500 million for it," based on the Post's newspaper and television station assets. At the time, Mr. Buffett took a 10% position in the firm, which today is worth over $1 billion.
http://www.chibus.com/global_user_elements/printpage.cfm?storyid=954656
By Andrew Van Fossen
