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| Adrian Mastracci, president of KCM Wealth
Management, says "From his start nearly four decades ago
in Omaha Nebraska, Warren Buffett has become well known as the
outspoken cheerleader of the 'buy and hold' school of investing." |
For Immediate Release
Vancouver, BC (August 21, 2002): Warren Buffett
is one of the most recognizable investment personalities in North
America.
From his start nearly four decades ago in Omaha Nebraska, Warren
Buffett has become well known as the outspoken cheerleader of the
“buy and hold” school of investing. He’s also
commonly referred to as ‘the oracle of Omaha’. CNBC
recently aired a three part interview with Warren Buffett.
Of course, he is the chairman of Berkshire Hathaway Inc. This company
of humble beginnings recently traded at US$74,900 for one Class
A share. It has ranged from US$59,000 US to US$78,500 in the past
twelve months.
By comparison, its book value in 1964 was less than $20 per share.
Clearly, a long run investment success by any standard of measure.
Adrian Mastracci, fee-only investment counsel & president of
KCM Wealth Management comments, “I find it instructive to
peek at the Berkshire Hathaway web site at www.berkshirehathaway.com.
The site is not in any danger of being the front runner for the
coveted web site of the year award. However, some important lessons
can be learned from digging through its content.”
“Visit Berkshire's home page where you will find the ‘Owner's
Manual’ link,” recommends Mastracci, “It makes
for interesting reading. It’s a list of the 13 owner related
business principles that Warren Buffett articulated in 1983 and
changed only slightly through the years.”
“Another point of investor interest is the ‘Acquisition
Criteria’ found on page 21 of the 2001 Annual Report,”
says Mastracci.
“Warren Buffett has remarkable investment insight. Moreover,
he has held his beliefs through the many market and economic swings
of the past four decades,” points out Mastracci, “And
we’ve had a wide variety of swings.”
“So what has the ‘buy and hold’ marathoner from
Omaha been buying up through the years? Let’s scan the Berkshire
Hathaway portfolio,” notes Mastracci, “It reveals positions
in American Express, Coca-Cola, Disney, Gillette, Wells Fargo, The
Washington Post and a number of others.”
“He’s also purchased a reinsurance company called General
Re, a building materials company called USG, a carpet maker called
Shaw Industries, the paint people at Benjamin Moore, and building
products manufacturer Johns Manville,” indicates Mastracci,
“He’s even dabbled in a little junk bond investment.”
“Warren Buffett's fame is the relentless buy and hold strategy.
He has clearly followed that philosophy year in and year out,”
explains Mastracci, “And that is why I refer to him as champion
marathon investor.”
“He gives no hint of being in a 100-yard dash,” says
Mastracci, “Warren Buffett has not always been right. However,
he has enjoyed a high degree of success by staying the course in
the long run.”
“Like every investor, he has had dry investment spells,”
muses Mastracci, “In the late 1990’s he was virtually
written off by many experts. His first year was no picnic either.
But he stuck by his principles with resolute determination in the
face of adversity.”
‘We can learn valuable lessons from the philosophy and approach
followed by Warren Buffett,” suggests Mastracci, “He
‘walks his talk’ when it comes to investments.”
“Warren Buffett had a clear vision from the outset and he
set out to accomplish the principles articulated in his owner's
manual,” summarizes Mastracci, “First he drafted a unique
investment game plan. Then he built his financial house on solid
foundations that have withstood the tests of time.”
“That insight has earned him plenty of respect and success,”
concludes Mastracci, “Simply said, he buys businesses that
he wants to hold for a long time.”
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