Ray Zee, here's my question for you...

Warren never sells anything unless he thinks their business model has changed in a way he doesn't approve of. Since Coke really hasn't changed its formula over the years how can you expect him to sell? Warren's methods aren't for everyone, that is for sure, but you can't argue with success. I don't think he has been lucky at all, just savvy enough to understand business models and trends that will emerge over time. Put another way, Warren is more than willing to wait for that long run that few do as far as investing in individual names goes. The antithesis of your trading style Dr. Bill, thats all.


I do agree though, if he were to retire or pass away the stock will take some hits and may never live up to its potential. The one thing against it now is that it has gotten so valuable and big, the bets it needs to make to continue its success have gone up to the point where its hard to see it growing that much. This plays out just like what happened with Peter Lynch. A very similar type of investor, he finally got to the point where he just moved the market on his own too much and in that scenario your sells get magnified and your buys don't matter unless you take significant stakes in companies.

"I think Warren is an old fool."

He's not that old, and not that much of a fool. Also note that although Buffett is the front man, BRK is run by two individuals Warren Buffett and Charles Munger. Both are responsible for important decisions.


"Someone flips a coin ten times and guesses right ,that is Warren.He hit that end of the bell curve,nothing more."


Would you say the same thing about Stuart Unger?How many times would someone have to guess the outcome of your coin flipping experiment before you would say they were not just lucky? Separating luck from skill is a hard thing to do, Buffett has been lucky since the mid 1960's. Will he be lucky in the future?


"I thought he was a "value investor" How

could he not sell Coke when it was in the $80.00 range."


BRK owns about 15% of KO. It would not be possible for Buffett to unload that much stock, even over a long period of time. Look at Janus trying to deal with redemptions. The other issue is that the large holding in KO gives BRK control of the board, an advantage not reflected in the price of a single share. Also note that if the dollar collapses in value KO may seem like a good investment again.

I never watched Ungar in action so I would rather not comment.But Warren is different.Why do you make excuses for him.

Think about what you said,he can't sell KO because he owns too much.First off he could have sold some.Secondly does that mean he can never get out?What happens when KO no longer fits his

model(like it probably didn't at 80 bucks)?

If he can't get out why did he buy that much, didn't he know he would have a problem?

If he owns a lot because the stock split he could have sold some as his stake grew.

Sorry..I may be wrong but I think the old coot just got lucky.It should only happen to us!!!


And one last thing,maybe it was his partner who made the right moves.

Ok Dr. Bill, so you are saying Warren should have sold just about everything when the market was at its top? Warren is doing just fine, he keeps his shareholders happy. Don't forget that, he isn't an investor as much as he is the leader of a publicly traded company. That must not be forgotten. He has people buying his stock because they want him invested in the market and making the types of picks he makes. Those investors are comfortable with his style and he obliges them. He is not there to trade his portfolio like you are for that is not his job. It is easy to forget this because people call him the best investor and all that, but Warren is not one to forget who is employing him and what their mandate is to him.

All of what you say may be true..but it doesn't anwer my question.If Warren had NO position in KO

would he have bought it when it was trading at 80 bucks? Of course not,he is a value investor and the P/E was thru the roof.And yet he did not sell.

You refer to Warrens style and the fact that he must appease his investors.KO at 80 ain't his style.

Should he have sold stocks at the top..of course not, just the ones that were ridiculously priced

like KO.He is not a "value investor".He is lucky.

Buffet a fool? The guy is basically the greatest investor ever. His track record is unmatched.


I don't think your analogy with the coin flip applies here. His return vs. the market is statistically significant. He may have missed the tech boom but if he were 30 years younger I would bet on him again. As said though...he's too old now for someone to invest comfortably and his stock is overpriced because of his legend.


Since when does not selling one stock in a huge portfolio at the top make you stupid? He's never really been just a "value" investor. Plenty of his insurance plays were based on growth. The guy was just good.

The greatest investor ever? Not even close.Sir,

I have worked with people who are so superior

to Buffet you just can't imagine.I will give you one example.I worked for a ML in Chicago doing

currency arbitrage.ML was an incredible spreader

in the currency market and interest rate markets.

Of the 100s of positions he took over the 4 years I worked with him there was not one loser.I know you won't believe it but I don't care.NOT ONE LOSER.In addition during the late 70's he called me upstairs from the trading floor and said Get on the phones we have reached the peak in interest rates and I am going long bonds by buying AAA Tax Free.I said "ML How do you know we have peaked"He showed me some formula he had worked out that involved Eurodollars and other instruments.He was salivating..going this is it,

this is the top.I won't have to pay taxes on these

babies!!!He picked the top to the day!!!!

Believe it or not,he had two brothers who were as good or better traders then him.

Please don't tell me about Buffet.The number of decisions he has made have no statistical value.

A coin toss for sure.And by the way he should have dumped Coke!!

... If Buffett lives his current expected lifespan, he will reach 12 figures.

He didnt make that type of money.Don't you mean the value of his holdings or stocks.Big deal,go buy Berkshire if you think he is so smart.Pay a ridiculous premium because Mr.Lucky was involved.

He was too lazy to even research the internet when

it became important.

"He is not a "value investor".He is lucky."


Lucky describes people who go into a casino with $500 and come out of it with $5000. Buffett started with close to nothing and became a billionaire. Perhaps really extremely consistantly lucky?


As to the value investor part maybe you are right, perhaps the correct word is capitalist? Actually BRK is not an investment vehicle, it is an insurance company. Buffett describes his own activities as allocating capital.


As to KO one question is whether the value of a holding increases faster or slower than it's size.


For example:

BRK owns 200 millon shares of KO. Is that more valuable than, equal to, or less valuale than 200 million times owning one share of KO.


Another question was buying KO a good idea at the time. Compare KO to the S&P:


http://finance.yahoo.com/q?d=c&c=&k=...n&z=m&q=l&x=on


Also note that KO paid more dividends than the S&P. BRK also has a significant unrealized cap gain on which taxes would be due if BRK sold any KO. A disadvantage of the buy and hold strategy is that your tax basis gets very low.