10:15 PM | Author: Siva
Barron's story says Warren Buffett's company is too pricey. Their valuation is $130, 000 a share. Well it came close to that price within a day. Well, you may wonder what am I doing monitoring this share. Someone said there are class B shares of the same company for people like me. Guess its price $4510 ! That is what is called overestimation of someone's net worth.

BTW, If you are shopping for books feel free to skip "The Warren Buffett Portfolio". Instead read the Warren Buffett's shareholder letters.
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14 comments:

On 9:58 AM , Baranidharan said...

Haaaa (breathing out)... too many blogs on Share... sounds greek & latin to me help me out... do you have anything like share for dummies not dummy shares :-)

 
On 1:55 AM , Seenivasan said...

Best way to get the knowledge of the stock market is to buy a share.

 
On 6:04 PM , Siva said...

Barani, There are quite a few places you can start with. www.fool.com is a nice place to start. Their Getting Started has some decent basics. If you go to some library start checking the recent issues of Money magazine.

As seeni said start investing. If you don't want to analyze stocks then just close your eyes buy an index fund. Buy it every time you want to invest.

 
On 6:04 PM , Siva said...

Barani, There are quite a few places you can start with. www.fool.com is a nice place to start. Their Getting Started has some decent basics. If you go to some library start checking the recent issues of Money magazine.

As seeni said start investing. If you don't want to analyze stocks then just close your eyes buy an index fund. Buy it every time you want to invest.

 
On 12:20 PM , Karthikeya Arasan SV said...

Barani, AS seeni said, You will learn the moment you put your money in to it.

Class A - $ 130, 000
Class B - $ 4510

Its toooooo expensive, but ROI from this stock is not that great in the recent past though ???

Why buffet has not stepped into Indian Stocks?

 
On 12:21 PM , Karthikeya Arasan SV said...

whats this class A and B funda?

 
On 11:12 PM , Siva said...

It is one of the best stocks in terms of ROI (for that amount of risk). I think you are looking at short term ROIs or you are comparing it against riskier stocks.

Class A and B are two types of shares for the same company. One with more voting power than the other. The management usually controls the one with the voting power.

 
On 11:33 AM , Karthikeya Arasan SV said...

1 Year ROI - 25%
5 Year ROI - 90%
10 Year ROI - 200%

I dont see any stock split as well. Not sure about Berkshire Hathaway dividend ?!

ROI is really not so great!

 
On 12:52 PM , Siva said...

You think 200% in 10 years is not so great ?. You are a spoiled kid from the Indian boom :-)) . What will you call as great ROI ?

Besides I will explain why I say "great returns for its corresponding risk" in another post.

 
On 2:51 PM , Karthikeya Arasan SV said...

Awaiting for your new post
-------------------------------
It took 10 years for 1000$ to become 3000$. Probably Buffet's company stock is low risk, solid and stable with less overhead?!

11% Compound intereset would yield the same ROI for 10 years.

Buffet would have earned so much in buying and selling companies, but from investor POV ROI is still not great numbers siva.

I might be a spoiled kid in booming market because I am a small retail investor.

Lets say I would have to invest 1 Million or 1 Billion, then investing in Berkshire will be a safe bet.

ROI numbers depends on time and risk :)-

There is good amount of learning one can learn from Buffet on how to buy and sell companies.

Shareholder letter was pretty good.
Overall Gain – 1964-2006 => 361,156%. I am not able to understand about 361156% over 42 years. Is that the company's growth or berkshire stock value growth???

The max I can see from finance.google is 1600% ROI in 17 years. Thats excellent for that window.

According to me (Average Retail Investor) following would be ROI/Year classification
================================
Savings Ac - 4-5%
FD - 8-10%
Not Bad - 10 - 20%
Good - 20 - 50%
Great - 50% - 100%
Excellent - 100% and above
Amazing - 1000%
================================
Recently I come across this stock which was Amazing (FSLR)
================================

Now you know why I said 200% ROI in 10 years is not a great ROI :))

 
On 2:51 PM , Karthikeya Arasan SV said...
This comment has been removed by the author.
 
On 7:25 PM , Siva said...

I was thinking that you are talking about 100% return in an year. If you are talking about 1000% return in 1 year, man I don't have any words.

In US market Buffet's numbers are unbeatable. Take any mutual fund and check the returns for say 20 years. Compare it to the index you will see the difference.

This 1000% return is possible in one year. But to repeat it year after year is near impossible. Actually to beat the index year after year is tougher than it sounds. You can argue that one 1000% return will help you settle down. The problem is next year you may lose 50% playing with such risky stocks. As a bonus you may loose lot of your sleep too.

 
On 8:55 PM , Karthikeya Arasan SV said...

so far 50-100% is my range, 1000 is beyond my imagination :)- thats why I mentioned it as amazing !!

Ada paavi ennaku avlo perasai kidaiyaathu...

Sorry I never compared Bershire with any Mutual Fund Index. I was comparing Bershire with other leading comp. I think thats a mistake, Actually Bershire itself is a Mutual Fund type.

Siva, if you are expecting 25% ROI, then please invest on me I will give you 25% after 1 year and keep the remaining ROI with me :)-

 
On 10:05 AM , Siva said...

Sure. Seriousa unnkita kodukkarathu bankla kodukkara mathiri. Let us take that offline.