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| Adrian Mastracci, portfolio manager at KCM Wealth Management, says “Warren Buffett has shown remarkable investment insight. He’s held his beliefs throughout the market swings of his investing life." |
Vancouver, BC (May 05, 2008): Warren Buffett is a recognized and quoted investment personality in North America. This past weekend about 30,000 attended his annual general meeting extravaganza.
Background
He started over four decades ago in Omaha, Nebraska. Warren Buffett is well known as the cheerleader of the “buy and hold” school of investing. He’s also called “the oracle of Omaha”.
Of course, he is the chairman of Berkshire Hathaway Inc. The little company from humble beginnings traded last Friday at US$133,600 for one “A” share. By comparison, its book value in 1964 was less than $20 per share. Clearly, a long-run investment success by any standard of measure.
Warren Buffett has shown remarkable investment insight. He’s held his beliefs throughout the market swings of his investing life. A wide variety of swings indeed. I especially like his references to short term sellers as those who “rent a stock”, while he “owns a stock”. He walks the talk.
Sample holdings
So, what has the “buy and hold” marathoner from Omaha been buying up through the years? The portfolio has positions in American Express, Coca-Cola, Proctor & Gamble, Washington Post, Wells Fargo and others.
He also purchased reinsurance company General Re, building materials company USG, carpet maker Shaw Industries, the paint people at Benjamin Moore and Dairy Queen. Plus, dabbling in junk bonds and derivatives. He’s been around the block and still has cash over $31 Billion to spend.
His approach
Warren Buffett's fame is the buy and hold strategy. He’s followed that philosophy year in and year out. Clearly, he’s not in any 100-yard dash. I refer to him as the champion marathon investor.
He’s not always been right. However, Warren Buffett has enjoyed a high degree of success by staying the course. Like every investor and professional, he’s had dry investment spells. In the late 1990’s he was virtually written off by many experts. His first year was no picnic either.
Warren Buffett had a vision. He methodically implemented the principles articulated in his owner's manual. He built his financial house on solid foundations that have withstood the tests of time.
His secret is quite simple. Buy businesses that you want to hold for a long time. A very long time!
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