Carnival of Berkshire #2

Collection of links to articles that offer value

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Dec 14, 2017
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Welcome to this week's Carnival of Berkshire, where I share and briefly go over five to 10 stories I found over the past week that somehow relate to value investing.

For example, this week's highlight is Warren Buffett (Trades, Portfolio) explaining how bubbles are formed. The link to the Business Insider article is below. I chose this article and its subsequent sublink to the National Archives due to the current bubble going on in Bitcoin. I briefly wrote about this on my blog (Warren Buffett on Bitcoin) but everywhere you look, Bitcoin is on the news. It just seems like all the publicity is only fueling the bubble.

Warren Buffett on How Bubbles Are Formed

"You can get in a whole lot more trouble in investing with a sound premise than with a false premise." -- Warren Buffett

Understand this simple sentence and then observe what is going on in not just Bitcoin but the other cryptocurrencies as well. Bitcoin is getting most of the publicity but other currencies like Ethereum, Litecoin, Ripple, etc. have also gone parabolic. It has gotten to the point where people are mortgaging their homes in order to buy digital currency. As mentioned above, have a sound premise (if you are to join the frenzy). Don't mortgage your home on the basis that "Bitcoin is going to go up."

Ben Graham: Zero Capital Gains Tax to Discourage Bubbles

Pretty self-explanotary video. The video doesn't state what year the dialogue was taking place, but several proposals were being submitted, including Graham's. The details were not made in the video, but it's obvious Graham was in favor of any proposal that favored long-term investing with low capital gains taxes.

Ben Graham: Senate Stock Market Study

The fact that videos like these exist amazes me. Obviously, it would of been nice to hear Graham's own voice, but the fact that we are able to listen to Graham's thoughts and ideas is something I really value.

Minnesota Teen Writes Book About How to Invest Money

This is a great article about a Minnesota teen who writes about investing. She started investing at the age of 9!!! She is now 15 and has published her own book and already understands the subject of compounding.

According to the article, "Maya invests in products she knows and understands."

Pretty simple, right? Reminds me Peter Lynch's books and his advice of investing in things we understand and use. Pepsi (PEP), Mattel (MAT), Johnson & Johnson (JNJ, Financial) are all well-known companies with simple products. Johnson & Johnson has some biotech, but she invested in Johnson & Johnson based on their household tape. Gilead (GLD, Financial) might be a bit out of her league (I think!!) but the other companies she mentions are simple and easy to understand.