Friday, December 16, 2005

After Charlie Munger, its The Sage of Omaha himself

This is something that i've copied from another person's blog (Mr. Anand Sridharan, a Venture Capitalist based in Mumbai). But, i think the message put-out by this interview of Warren Buffet makes a lot of sense to me, and will do to hundreds others. Personally, Warren Buffet is someone whom I admire and is someone whom i wish to better in this lifetime. But that is something that will have to wait a few years, till then here is what my dear mentor has to say on careers and investing -

Career Advice

If you want to make money go to the Wall Street. More importantly though, do what you would do for free, having passion for what you do is the most important thing. A few months ago I was talking to another MBA student, a very talented man, about 30 years old from a great school with a great resume. I asked him what he wanted to do for his career, and he replied that he wanted to go into a particular field, but thought he should work for McKinsey for a few years first to add to this resume. To me that's like saving sex for your old age. It makes no sense. Don't pay attention to beginning salaries. My first job with Benjamin Graham I accepted before I even knew what the salary was. Do what you're passionate about.

Investing

When making investments, pretend in life you have a punch-card with only 20 boxes, and every time you make an investment you punch a slot. It will discipline you to only make investments you have extreme confidence in. Big money is made by obvious things. If using a discount rate of 8% vs. 10% is going to make or break an investment idea, it's probably not a good idea. Back in 1951 Moody's published thick handbooks by industry of every stock in circulation. I went through all of them, thousands of pages, motivated by the hope that a great idea was just on the next page. I found companies like National American Insurance and Western Insurance Securities Company that nobody was paying attention to that were trading for far less than their intrinsic values. Last year we found a steel company on the Korean Stock Exchange that had no analyst coverage, no research, but was the most profitable steel company in the world.

A very nice piece of advice from the man who made billions out of investing in stocks. Here's the link to the original interview and to the blog from where i got this in first place.

http://mba.tuck.dartmouth.edu/pages/clubs/investment/WarrenBuffett.html

http://radventure.blogspot.com/

1 comment:

FIONA said...

Dear Ravi,
All I can say reading your articles is you are quite a learned and self made man. Thanks for such a informative blog and especially i being an investor in the markets, who has lost more then any gains,thanks to the irrational trading that i get into,I now conciously need to put in efforts and learn read and think before investing!!!

Great going man...!!!

Regards,

Fiona