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How to design your own investment?
February 19th, 2013 10:26 AM

I finished one more book about Buffett over the last a
few weeks: Buffett:The Making of an American Capitalist.
I think I learned a lot from those books.

1)Why he choose long term investment?
One of the miracle of the money is the compounding.
If you choose short term investment, then you have to
have to pay taxes after each sale. This is hurt your
return.

2)Why he investment the money on the sound/good companies?
Same as 1). He can hold the investment for longer term.

3)Did she sell the investment for the short term gain?
Yes, when he found this security does not have much potential
for further growth, or the company is no longer worth for
investment, or too much gain for very short term of period
(like China Petroleum & Chemical Corp).

4)We can not copy some of his investment.
He purchased lots of shares GEICO at $2 when the company
was in trouble. Since he was one of the major share holder,
he could pick the CEO(Jack Byrne) to manage the company
and turn around.

He invested in Soloman Brothers, and when the company was
in trouble because of the bond trading scandal, he could
step in as interim CEO and help the company turn around.

We do have the power to do any of those.

5)Charlie Munger is one of the best Lawyers with lots of
connections. He can help with Buffett to the risk of those
business investment.

6)He did make very good calls, like Washinton Post, Coca-cola,
Wells Fargo, etc. And they are all long term investments.


Posted in:General
Posted by Eric Fang on February 19th, 2013 10:26 AMPost a Comment

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