Hi there, thanks for all the wonderful work you are doing!
I have one comment on point 9 in this article. "87% (!) of Berkshire Hathaway’s assets are invested in only 10 stocks.". While this is true for their investment portfolio, it is far from true for their entire asset base. They have many other wonderful businesses that are not visible on that image. BNSF, BHE, GEICO, etc. In any case, even if we look at all of their assets, I am sure that the concentration will still be there, so your points are directionally correct. Only the numbers might be slightly off.
Albert Einstein once said “Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn't, pays it”. Amazing that Mr. Buffett has earned 95% of his wealth after age 65. No wonder he will elected to wait on his enormous philanthropy. Thank you for sharing his timeless wisdom.
Regarding lesson #2. I heard Howard Marks say in a recent interview that leverage (debt) is like a 6 foot tall hiker walking with a knapsack trying to cross a river that is 5 feet deep on average. When the river is 3 feet deep he feels OK. Then the depth of the river suddenly increases to 8 feet! Do you think you can swim up to the surface for air with that knapsack full of rocks?
I carried many rocks in my knapsack when I was young and learning how to use credit cards. It was hard enough to get around without crossing rivers and I was unable to save much. At some point my shoulders and back ached and I got sick and tired of the debt. I do not use leverage in my own investing and I avoid highly leveraged companies.
Maybe I had to go through some hard person lessons about debt and leverage in order to ready for my days as a retail investor. In that case, those were inexpensive lessons compared to what I could have paid in the school of "real life investing with leverage"!
Hi there, thanks for all the wonderful work you are doing!
I have one comment on point 9 in this article. "87% (!) of Berkshire Hathaway’s assets are invested in only 10 stocks.". While this is true for their investment portfolio, it is far from true for their entire asset base. They have many other wonderful businesses that are not visible on that image. BNSF, BHE, GEICO, etc. In any case, even if we look at all of their assets, I am sure that the concentration will still be there, so your points are directionally correct. Only the numbers might be slightly off.
Cheers and keep it up!
Thank you for this Quality reply. You are 100% correct. It is far from true for their entire asset base. We keep in touch!
Albert Einstein once said “Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn't, pays it”. Amazing that Mr. Buffett has earned 95% of his wealth after age 65. No wonder he will elected to wait on his enormous philanthropy. Thank you for sharing his timeless wisdom.
Regarding lesson #2. I heard Howard Marks say in a recent interview that leverage (debt) is like a 6 foot tall hiker walking with a knapsack trying to cross a river that is 5 feet deep on average. When the river is 3 feet deep he feels OK. Then the depth of the river suddenly increases to 8 feet! Do you think you can swim up to the surface for air with that knapsack full of rocks?
I carried many rocks in my knapsack when I was young and learning how to use credit cards. It was hard enough to get around without crossing rivers and I was unable to save much. At some point my shoulders and back ached and I got sick and tired of the debt. I do not use leverage in my own investing and I avoid highly leveraged companies.
Maybe I had to go through some hard person lessons about debt and leverage in order to ready for my days as a retail investor. In that case, those were inexpensive lessons compared to what I could have paid in the school of "real life investing with leverage"!
Compound interest is the eighth world wonder.
He who understand it, earns it. He who doesn't pays off.
Debt can compound too. Thanks for sharing this brave lesson, Boris!
Thanks for sharing a invaluable wisdom of legend 🙏
Thank you for the great newsletter!
Thanks for sharing the knowledge