Mr. Buffett singled out Burlington Northern, for which he paid $26 billion last year for the 77.4 percent he didn’t already own, for hefty praise. Here’s how he sees the benefits of owning a majority stake in the railroad operator, which earned $3.6 billion last year, on $15.1 billion in revenueWhat a cheap buy! 26/0.774/3.6=9.3, that means 10.7% profit a year...And Burlington still grows...
Showing posts with label Investment. Show all posts
Showing posts with label Investment. Show all posts
Thursday, March 3, 2011
Burlington Northern -- a cheap buy
A report from NYTimes:
Wednesday, July 7, 2010
Why Paul Samuelson Does Not Support Leverage Investing
It is quite strange that academic fellows still advocate leverage investing, even though one of the greatest economists Paul Samuelson declared against it and Warren Buffett was mentioned.
Obviously, I think professor Samuelson was right and so is Warren Buffett. This kind of stories in investment always happen. These academic fellows once again act as "falling victim to the 'law of large numbers' fallacy". They are wrong simply because they use short term debt to "invest" long term or uncertain time period realized asset. That is crazy. Quite different from buying a house with leverage, debt of stock leverage is quite uncertain and liquidation time is always short than those fellows expect. No long term financial tools are present for ordinary stock leverage.
We need to remember Mr. Buffett's advice: never leverage.
Obviously, I think professor Samuelson was right and so is Warren Buffett. This kind of stories in investment always happen. These academic fellows once again act as "falling victim to the 'law of large numbers' fallacy". They are wrong simply because they use short term debt to "invest" long term or uncertain time period realized asset. That is crazy. Quite different from buying a house with leverage, debt of stock leverage is quite uncertain and liquidation time is always short than those fellows expect. No long term financial tools are present for ordinary stock leverage.
We need to remember Mr. Buffett's advice: never leverage.
Thursday, March 12, 2009
Why we all love Warren Buffett?
Warren Buffett is no longer the richest man of 2009;Bill Gates, again got the No.1. It doesn't matter at all. Fortune is always not easy to valuate, or even estimate. I think none can really tell us who will be really richer, Mr. Buffett or Gates --even neither can they themselves.
As a matter of fact, Bill Gates is much younger than Warren Buffett and their fortune almost the same, therefore Bill Gates' return rate of investment should be much higher than Mr. Buffett -- remembering the power of time. But why is it Mr. Buffett that is much more noticed and loved by the people all over the world? Another fact is they are both the biggest charitarians in the world.
The personal charisma and wisdom is one of the important reason, but not all. From the view of investment, Mr. Gates' success is some kind of "venture investment", which is possible but not expected. But Mr. Buffett, we all know him as the greatest "value" investor. Absolutely, few can expect to become Buffett II, as well as Gates II, however, the "value" investment is much more definite than "venture" investment, isn't it?
As a matter of fact, Bill Gates is much younger than Warren Buffett and their fortune almost the same, therefore Bill Gates' return rate of investment should be much higher than Mr. Buffett -- remembering the power of time. But why is it Mr. Buffett that is much more noticed and loved by the people all over the world? Another fact is they are both the biggest charitarians in the world.
The personal charisma and wisdom is one of the important reason, but not all. From the view of investment, Mr. Gates' success is some kind of "venture investment", which is possible but not expected. But Mr. Buffett, we all know him as the greatest "value" investor. Absolutely, few can expect to become Buffett II, as well as Gates II, however, the "value" investment is much more definite than "venture" investment, isn't it?
Wednesday, June 4, 2008
Business in Wuhan
Are you planning to do business in Wuhan, the biggest city in centeral China? Quite smart!
The south China is losing some of its advantage in manufacture industry. The prices for houses, land and labor are rising rapidly. The local government increases the lowest salary year by year in Shenzhen, Guangzhou, Zhuhai, Dongguan etc. As profit margin has already dereased quickly, many factories are considering on removing to even poorer countries like Vitenam and Burma. Obviously, that cannot solve the problem completely. There are not so many well educated engineers and huge labor resouce in these countries; also, the public facility is not as good as that in China.
How? Move to north, move to Wuhan. Tranportation cost may increase, but cost on labor, land, rent, electricity and facility will compensate much more. Wuhan has the 3rd largest university student population, 2nd largest iron & steel production, 2nd largest auto company in the nation. The biggest hydroelectric station in the world is also nearby. The city has been called "center of China" for hundreds of years. The biggest & longest river and the most important railways and highways in the nation are all pass throuth this center city. In the early 20th centry, the city was called "Oriental Chicago" by foreign investors and adventurers. Before 1949, Shanghai and Wuhan are the topest 2 cities ahead of Beijing in China.
World famous companies have already come to Wuhan. Citroen and Foxconn both has big factories of over 100,000 workers in Wuhan. The French have put most of its investment in China to Wuhan for quite a long time.
If you are interested in Wuhan or like any discussion on this city, please contact me. I am now intesested in the fields of
1) financial service (only interested in value investment)
2) food service
3) retail
4) education
5) internet
6) microelectronics
I am glad to have your emails: ickitt(*at*)gmail.com
The south China is losing some of its advantage in manufacture industry. The prices for houses, land and labor are rising rapidly. The local government increases the lowest salary year by year in Shenzhen, Guangzhou, Zhuhai, Dongguan etc. As profit margin has already dereased quickly, many factories are considering on removing to even poorer countries like Vitenam and Burma. Obviously, that cannot solve the problem completely. There are not so many well educated engineers and huge labor resouce in these countries; also, the public facility is not as good as that in China.
How? Move to north, move to Wuhan. Tranportation cost may increase, but cost on labor, land, rent, electricity and facility will compensate much more. Wuhan has the 3rd largest university student population, 2nd largest iron & steel production, 2nd largest auto company in the nation. The biggest hydroelectric station in the world is also nearby. The city has been called "center of China" for hundreds of years. The biggest & longest river and the most important railways and highways in the nation are all pass throuth this center city. In the early 20th centry, the city was called "Oriental Chicago" by foreign investors and adventurers. Before 1949, Shanghai and Wuhan are the topest 2 cities ahead of Beijing in China.
World famous companies have already come to Wuhan. Citroen and Foxconn both has big factories of over 100,000 workers in Wuhan. The French have put most of its investment in China to Wuhan for quite a long time.
If you are interested in Wuhan or like any discussion on this city, please contact me. I am now intesested in the fields of
1) financial service (only interested in value investment)
2) food service
3) retail
4) education
5) internet
6) microelectronics
I am glad to have your emails: ickitt(*at*)gmail.com
Thursday, March 6, 2008
Is it time to invest Chinese stocks?
US market has been stricken heavily by the sub prime. Even Warren Buffett, who became the richest man in the world today, admitted that US economy is being faced with fading. How about China?
Will China survive alone in this crisis? Of course US is a big and important market for Chinese manufactures and China's GDP is expected to increase only 8% this year, but that is still good enough. China itself has the greatest demand on this planet. Its people are stimulated successfully to consume much more than before. Please come to any supermarket or shopping mall in China, which is filled with customers no matter on weekend or workday national wide.
Chinese do not become rich one night; in fact, most Chinese are still much poorer than most American can imagine. However, persuaded by the central government, Chinese have decreased their saving and consumed more. You can find the novel iPhone at Chinese young men's hands, PSP played by children, and luxury auctioned on marts...
The overall PE of Chinese blue chips has kept on decreasing since last year end (now, it is only half compared to that of in mid 2007), PEG of blue chip section is less than 0.8. Jim Rogers, the legend world wide investor, has kept in collecting Chinese stocks for years. Just yesterday, Jim advocated strong buy! If you do not believe Chinese manufacturing, at least, you should never miss the retail sector.
Believe in 2008 or regret in 2009...
Will China survive alone in this crisis? Of course US is a big and important market for Chinese manufactures and China's GDP is expected to increase only 8% this year, but that is still good enough. China itself has the greatest demand on this planet. Its people are stimulated successfully to consume much more than before. Please come to any supermarket or shopping mall in China, which is filled with customers no matter on weekend or workday national wide.
Chinese do not become rich one night; in fact, most Chinese are still much poorer than most American can imagine. However, persuaded by the central government, Chinese have decreased their saving and consumed more. You can find the novel iPhone at Chinese young men's hands, PSP played by children, and luxury auctioned on marts...
The overall PE of Chinese blue chips has kept on decreasing since last year end (now, it is only half compared to that of in mid 2007), PEG of blue chip section is less than 0.8. Jim Rogers, the legend world wide investor, has kept in collecting Chinese stocks for years. Just yesterday, Jim advocated strong buy! If you do not believe Chinese manufacturing, at least, you should never miss the retail sector.
Believe in 2008 or regret in 2009...
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