Dollars and Jens
Thursday, March 25, 2004
Has Buffett Lost It? Or Has Marketwatch?
I just ran across this week-old article. It's funny, in an Ed-Wood-movie kind of way.
Last year, his investment vehicle Berkshire Hathaway underperformed the Standard & Poor's 500 Index by nearly 8 percentage points.
That happens with the share price once in a while, depending on the mood swings of the market. Much less often does it happen with the intrinsic value, or -- more objectively -- book value.
He sidestepped the bubble (and all those gains too).
I'll just let that speak for itself.
He barely participates in the technology sector (besides a reported throw-away personal ownership of 100 shares of Microsoft).
And Microsoft has no exposure to insurance...
And his biggest claim to fame is: buy and hold, otherwise known as value investing.
I hope nobody who read this piece learned the term "value investing" from it. Value investing means valuing stocks as pieces of companies, which they are. One can hold forever, or sell when a company gets overvalued. Similarly, a growth manager -- who looks for a company with good growth prospects, and buys it at whatever price (s)he can get -- could hold a stock for a week or a decade.

Anyway, have a good laugh.

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