Uber investor Warren Buffett has made the right call yet again in his 81-year investing career.
Record Profits of $10 billion.
The Oracle of Omaha and his investment vehicle Berkshire Hathaway, set a record on the stock market rising 2% in value as his quarterly operating profit topped $10 billion for the first time, Reuters reported.
In many ways, Buffett is an example to all entrepreneurs. He is canny, he thinks long term and has nerves of steel.
Buffett the gentleman.
I was lucky enough to run into him at the 100th birthday of Forbes magazine, on the banks of the Hudson River in New York, in 2017.
Stevie Wonder turned out the tunes that night and Buffett, who was on the cover of the centenary magazine, turned on the charm. I am pleased to report that a $100 billion fortune has not yet turned the 91-year-old into a power-crazed curmudgeon.
Filing his tax returns in his teens.
Buffett, who was born in Omaha, began trading early, under the eye of his stockbroker father. In his early teens he was doing a paper round and his own tax returns.
He bought his first share at the age of 11 and learned his first hard lesson. He bought at $38 and sold at $40; he then watched the share soar to $200. The experience taught him to always think long term when investing.
Combing the balance sheets.
Trading was all he wanted in life and he sank his energy into it.
Buffett never uses a computer and always reads a fist full of newspapers every morning and drinks a bottle of Coca Cola made by one of the many companies he owns.
The core of Buffett’s day is sitting at his desk, in Omaha, going through pile after pile of papers. These are the balance sheets that Buffett combs through every day looking for undervalued companies.
How does he spot an undervalued company?
Buffett looks for companies out of favour in the market. He values them by looking at their fundamentals, like return on equity and profitability.
Once he decides upon a company, he will invest long term, and hold onto the stock in the hard times and also diversify.
A mixed bag of companies.
This diversification can be seen clearly in his portfolio. His nearly $800 billion conglomerate also includes energy, car dealership and real estate brokerage businesses, several manufacturing and industrial businesses, and consumer brands such as Dairy Queen, Fruit of the Loom and See’s Candies.
This mixed bag of companies helped Berkshire Hathaway post the record $10 billion profits. Rising interest rates helped The company in the second quarter generate more profit from fixed-income investments, including a cash stake that grew to $147.4 billion, while fewer accident claims bolstered Geico car insurance.
How diversification can help.
That helped offset declining profit at the BNSF railroad, and lower earnings from building products companies such as Clayton Homes as well as consumer businesses such as Forest River recreational vehicles and Duracell batteries.
So long term diversified investment wins again. That is the world of finance according to Buffett- the Oracle of Omaha.
