Buffett's is 'best' US company

Came across this article 5 minutes ago and thought I'll share it with you guys. Though it is a short and brief article, I wish to highlight 2 important points.

1. Warren Buffett, though super rich, is a frugal person. How many people we know try to spend lavishly on lots of material things just to 'look rich', but in fact if you take a closer look at their bank account, they're really BROKE!

2. Warren Buffett is good at investing! Damn good! How? Firstly he believes in value investing. Instead of trying to go after the next 'hot tip' (be it on stocks or even football!), he knows the difference between value and price. Many people only see the price, and it is the most misleading thing to look at! Prices of stock changes EVERY SINGLE DAY! But NOT! So we must all learn how to judge value, like Mr Buffett.

3. (actually a continuation of the above point) Warren Buffett believes in LONG TERM INVESTING. His favorite holding period is 'forever!' (Yes, he really did say this!) I've recently explained why to one of my clients and I'll post an abstract of the email for sharing purposes, edited for relevance...

... investment works on a long term approach philosophy. There are a couple of reasons for this. 
1. Studies show that the longer one remain invested, the lower the risk. One of my research demonstrates that if you can stay invested for 10 years, any 10-year period, the chances of losing money is zero.
2. Long term performance of the broad equities market tend to outperform other financial instruments such as deposits (e.g. CPF) or bonds.  
3. By staying invested longer, your charges are actually cheaper. Consider the fact that you have paid a one-off investment sales charge (for example 5%)  when you first made your investment. By spreading them across 10 years, the cost of investment per year is lower than compared to, say, 3 years.
 4. Trading (buying and selling) short term means you have to pay lots of commissions, charges or brokerage fees, which eats away at your profits, and can accumulate to be a hefty sum.
Hope I have shared some tidbits of Buffet's wisdom that are of value. Here is the full article for your reading pleasure. Have a great week ahead!



Apr 5, 2010

Buffett's is 'best' US company

BOSTON - EVERYBODY loves Warren Buffett.
Berkshire Hathaway Inc - the investment vehicle run by Mr Buffett, the so-called sage of Omaha - topped a list of the best-regarded US companies, although the public has a dim view of corporate America overall after a brutal economic downturn.
After a recession that prompted the US government to spend hundreds of billions of dollars on corporate bailouts, 81 per cent of Americans told Harris Interactive that business's reputation is 'not good' or 'terrible'. That marked a slight improvement from last year, when 88 per cent took that view and was the second-worst rating since Harris began asking that question in 2002.
The best year was 2004, when 68 per cent of respondents said corporate America's reputation was 'not good' or 'terrible.' Effective management drove public perception, evidenced by the rise of Ford Motor Co - the one US automaker to avoid bankruptcy and bailout - which rose to 37th among the 60 most visible US companies, up from 51st a year earlier. The rankings were provided to Reuters a day before their official release on Monday.
Omaha, Nebraska-based Berkshire's spot atop the list reflected public perception of Mr Buffett as a chief executive who is both effective in running his company and not excessive in his pay or benefits.
'It's his humility and sense of accountability,' said Robert Fronk, senior vice-president at Harris. 'You don't read about his excesses. Instead you read the opposite. He still has the same office. He's going to make his kids comfortable, but they're not going to be billionaires.' Johnson & Johnson, Google Inc, 3M Co and privately held SC Johnson & Son Inc rounded the list of the five companies with the best reputations. -- THOMSON REUTERS