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Vancouver, B.C. (February
15, 2001): Warren Buffet is one of the
most written about investment personalities in
North America. From his commencement nearly four
decades ago in Omaha Nebraska, Warren Buffet has
become the marathon investor of the "buy and hold"
school of investing.
Of course, he is also known as the
chairman of Berkshire Hathaway Inc. This company
of humble beginnings has been trading recently
at $70,500 U.S. for one Class A share and has
ranged from $40,800 U.S. to $74,600 U.S. in the
past twelve months. By comparison, its book value
in 1964 was less than $20 per share.
Adrian Mastracci, fee-only
investment counsel and president of KCM Wealth
Management comments, "It may be instructive
to have a peek the Berkshire Hathaway web site
at www.berkshirehathaway.com.
The site is not likely to win the web site of
the year award; however, some lessons can be learned
from digging through its content."
"Read the notice for the 2001 annual
general meeting of shareholders." says Mastracci,
"This is a treatment that very few companies accord
their shareholders."
Scroll to the bottom of the Web
site's home page where you will find the "Owner's
Manual". It makes for interesting reading, as
it is a list of the 13 owner related business
principles that Warren Buffet set out in 1983
and changed only slightly through the years. Perhaps,
this explains the treatment of owners mentioned
in the previous paragraph.
Mastracci also comments, "As an
investor, Warren Buffet had tremendous insight
when he began and has held his beliefs through
the market and economic swings of the past four
decades."
So what has the "buy and hold" marathoner
from Omaha been buying up through the years? A
scan of the Berkshire Hathaway portfolio reveals
that he has positions in American Express, Coca-Cola,
Disney, Gillette, Wells Fargo, The Washington
Post and a number of others.
More recently, he purchased a reinsurance
company called General Re, a position in USG which
is building materials company, a carpet maker
called Shaw Industries, the paint people at Benjamin
Moore, along with building products manufacturer
Johns Manville, just to name a few. Last year
he even dabbled in a little junk bond investment
in a couple of companies called Finova Group and
Conseco.
"Warren Buffet's fame is the relentless
buy and hold strategy. He has clearly followed
that philosophy year in and year out, and that
is why I refer to him as the marathon investor.
He gives no hint of being in a 100-yard dash."
says Mastracci, "Warren Buffet has not always
been right; however, he has had a high degree
of success by staying the course in the long-term."
We can learn valuable lessons from
the philosophy and approach followed by Warren
Buffet. He does "walk his talk" in the investment
sense.
Mastracci summarizes, "Warren Buffet
had a clear vision from the outset and he set
out to accomplish the principles later articulated
in his owner's manual. He drafted a unique personal
game plan, and built his financial house on solid
foundations that have withstood the tests of time."
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