Warren Buffett: How To Trade Derivatives

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While Warren Buffett is famous for calling derivatives ‘financial weapons of mass destruction’, in his 2008 Shareholder Letter he explained his strategy for trading derivatives. Here is an excerpt from the letter which covers put options: Considering the ruin I’ve pictured, you may wonder why Berkshire is a party to … Read More

Warren Buffett: Selling Your Successful Investments Is Akin To The Bulls Trading MJ Because He’s Become Too Important To The Team

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In his 1996 Chairman’s Letter, Warren Buffett provides a great example of why you should never sell portions of your most successful investments. Here’s an excerpt from the letter: Our portfolio shows little change: We continue to make more money when snoring than when active. Inactivity strikes us as intelligent … Read More

Warren Buffett: “I’ll Pay You $10,000 For Your Dog By Giving You Two Of My $5,000 Cats”)

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In his most recent Berkshire Hathaway 2020 Annual Report, Warren Buffett discussed a number of topics including why Berkshire is different to the prototype conglomerate, and the shenanigans around paying for overpriced acquisitions. Here’s an excerpt from that report Berkshire is often labeled a conglomerate, a negative term applied to … Read More

Warren Buffett: 1959 Activist

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In Alice Schroeder’s book – The Snowball, she recounts a great story about Warren Buffett, the twenty nine year old activist, who was fed up with Sanborn Board members refusing to distribute the company’s investments to its shareholders, and instead wasting shareholders money on cigars. It’s also an early illustration … Read More

Warren Buffett: Investors Think Stocks Are Different To Other Investments Because They Can Make Decisions Every Second On Stocks

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During his recent CNBC interview with Becky Quick, Warren Buffett explained that the reason investors treat stocks differently to other investments is because they can make decisions every second with stocks. Here’s an excerpt from the interview: In 1932 General Motors had 19,000 dealers. That’s more than all the auto … Read More

Warren Buffett: Top Buys, Top Sells

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One of the best resources for investors are the publicly available 13F-HR documents that each fund is required to submit to the SEC. These documents allow investors to track their favorite superinvestors, their fund’s current holdings, plus their new buys and sold out positions. We spend a lot of time … Read More