Raise your hand if you want a crash course over the income statement from Warren Buffett! Here’s a handful of tools so simple a caveman can do it. Using these tools, Warren searches the universe for companies with a durable competitive advantage. Finding those companies is key for building wealth. Some time ago, I read “Warren Buffett and the Interpretation of Financial Statements” by Mary Buffett & David Clark. Warren bought into the idea that if you found a fair priced company with a durable competitive advantage and economic moat, you could ride it to riches. He’s built his wealth to extraordinary levels and created an empire like company in Berkshire Hathaway (NYSE: BRK-A). I’ll cover a handful of these analytics while showing examples of companies that pass with flying colors and others that crash and burn. The companies Apple Inc. (NASDAQ:AAPL), IPG Photonics (NASDAQ: IPGP), Groupon Inc (NASDAQ:GRPN), Delta Air Lines, Inc. (NYSE:DAL) are unrelated, but showcase great examples.
There’s a crisis in SA, but a healthy one (Citizen)
AS the Financial Meltdown’s dust was settling, the Sage of Omaha mused on how we should never waste a good crisis. Warren Buffett was referring to structural issues in the global banking system, suggesting Main Street’s anxiety would spur regulators to do the right thing. But watching the past week’s media circus starring the arch opportunist from Limpopo, I can’t help thinking how well Buffett’s advice travels. For a couple decades, mining has been the New South Africa’s dirty little secret.
‘Chinese Warren Buffet’ fraud trial starts (TorontoSun)
Both Crown and defence lawyers in the Weizhen Tang trial delivered their opening statements in court Thursday. Tang, the self-proclaimed “Chinese Warren Buffett,” is accused of masterminding a $30-million Ponzi scheme, involving over 100 investors between 1999 and 2009. “He compared himself as the investor Warren Buffett,” Crown prosecutor Robert Gattrell told the 12-person jury. “They (investors) were encouraged to leave their money (with Tang) and invest more money.”
Buffet Vs. Soros: Investment Strategies (SFGate)
In the short run, investment success can be accomplished in a myriad of ways. Speculators and day traders often deliver extraordinary high rates of return, sometimes within a few hours. Generating a superior rate of return consistently over a further time horizon, however, requires a masterful understanding of the market mechanisms and a definitive investment strategy. Two such market players fit the bill: Warren Buffet and George Soros.
Would Benjamin Graham Bite Into Apple Or Friend Facebook? (Forbes)
How much are you willing to pay up for a company’s future growth? That’s always a tough question since you never know the timing or the magnitude of increases in sales and profits–or whether they will indeed materialize–so you need to make some assumptions based on historical performance and evaluations of new initiatives and products from the company. The idea is that in the case of a fast-grower, you’d be willing to pay a higher multiple of sales and earnings today for the wondrous bounty that awaits you down the road. From Benjamin Graham, teacher and investing mentor to Warren Buffett, to Peter Lynch, the legendary manager of the Fidelity Magellan fund from 1977-1990, the price-to-earnings growth (PEG) ratio was a handy and simple yardstick to measure value. Take a stock’s current price-earnings ratio and divide it by what you assume to be a likely percentage rate of growth in earnings over the next five years. The lower the better, and preferably below 1.0, suggesting you’re buying the growth at a discount.
10 S.A.F.E. International Dividend Stocks (Forbes)
Dividends are not always considered sexy nor do they capture investors’ imaginations or tickle their fancies the way the next Apple or Facebook might. …The Oracle of Omaha, Warren Buffett, also understands the true power of dividends. You may not think of Buffett as a dividend investor, but make no mistake: It is absolutely no accident that all but six of Berkshire Hathaway’s current holdings pay cash dividends or that those dividends are expected to add up to an eye-popping $1.3 billion in cash for Berkshire this year alone.
MacDonald Dettwiler & Associates Ltd. Getting Very Oversold (Forbes)
Legendary investor Warren Buffett advises to be fearful when others are greedy, and be greedy when others are fearful. One way we can try to measure the level of fear in a given stock is through a technical analysis indicator called the Relative Strength Index, or RSI, which measures momentum on a scale of zero to 100. A stock is considered to be oversold if the RSI reading falls below 30. In trading on Thursday, shares of MacDonald Dettwiler & Associates Ltd. (Toronto: MDA) entered into oversold territory, hitting an RSI reading of 24.3, after changing hands as low as $49.59 per share.
