Buffett and Cooperman Agree Luck is Key to Investing Success

“Whatever success I’ve achieved, I think I’ve achieved it because I’ve been very lucky,” said founder and CEO of Omega Advisors Leon Cooperman in an October interview on CNBC. Cooperman echoes sentiment of Berkshire Hathaway CEO Warren Buffett, who has often said he was born with advantages that helped him along the way—which he refers to as winning the “ovarian lottery.”. In 2013, Buffett said, “The womb from which you emerge determines your fate to… Read More

Buffett Repurchases Over $900 Million in Berkshire Stock

An article in The Wall Street Journal reports that Berkshire Hathaway repurchased $928 million in stock in the third quarter of 2018, calling it a rare move that indicated Chairman Warren Buffett sees a dearth of appealing investment options for his company’s large cash balances. This is the first repurchase since 2012, the article says, reflecting the “the scarcity of attractively priced projects and deals that can satiate yield-hungry investors and firms more than nine… Read More

Investing Strategies of American Billionaires

An article in last month’s Forbes offers a synopsis of the investment approaches of some of our country’s prominent billionaires: Warren Buffett, CEO of Berkshire Hathaway– Buffett uses a “common-sense playbook” of investing in companies that have a track record of making money, that have strong management teams and low debt levels. His mantra is summarized as, “only put your money into companies you understand, and don’t overpay.” Mark Cuban—This investor became a billionaire through… Read More

The Underappreciated Role of Luck in Investing

By Justin J. Carbonneau (@jjcarbonneau) —  The $1.5 billion Mega Millions jackpot had a lot of people daydreaming about what they would do if they won such a windfall. With odds of about 1 in 250 million, you can almost guarantee with 100% certainty that you and everyone else you know that bought a ticket woke up on last Wednesday to be disappointed. Still, someone was lucky enough to become a multi-millionaire overnight. While luck… Read More

Buffett’s Secret to Investing Success

A recent article in Forbes outlines what Warren Buffett frequently cites as the central themes of his investing approach—which can be found in two of his favorite books: The Intelligent Investor, by Benjamin Graham, and General Theory by John Maynard Keynes. The article breaks down the three themes as follows: Investment vs. Speculation: Graham’s book differentiates between investing, which consists of “buying stocks for less than they are fundamentally worth,” and speculation, which is “trying… Read More

Value Investor Channels Buffett

A recent Barron’s article profiles value investor Fred Copper, lead manager of the Columbia Overseas Valuefund, who has learned that the best way to beat his benchmark (the MSCI EAFE Value index) is to “not invest like it.” Copper has adopted a more flexible definition of value than some of his peers, based on his belief that traditional style benchmarks for value funds include a significant amount of cyclicality–meaning they include stocks that are sensitive… Read More

How Did Berkshire Hathaway Look in 1975?

A recent Morningstar article offers an overview of Berkshire Hathaway stock performance since 1975 and whether it would have been attractive to an investor in the early days based on five- and ten-year historical returns. Regarding the second five-year period, the article asserts, “Boy, did things change,” adding, “In real terms, that whippersnapper Warren Buffett turned $10,000 of January 1971 money into just under $7200. The Oracle of Omaha indeed! More like the Numbskull of… Read More

Buffett Winding Down Derivatives

Warren Buffett is facing the expiration of equity-index put options that the Berkshire Hathaway CEO initiated between 2004 and 2008 “to bet that stock prices would rise in the long run”, according to a recent article in Bloomberg. The options, tied to four major equity indexes, are reported to have added a total of $2.4 billion in earnings from 2008 to 2017. They began expiring in June, and the last of them will unwind by… Read More

The Future of Berkshire Without Buffett

Barron’s recently invited readers to submit letters they might write to Warren Buffett. One, which they published in June (by writer Andrew Bary), suggested that Berkshire shareholders might derive some comfort from knowing a bit more about Berkshire’s succession plan. “After 53 years at the helm,” wrote Bary, “isn’t it time to share the limelight with your likely successor and with Berkshire’s many managers? Investors would get to know them better and gain confidence that… Read More

Everyone Makes Mistakes, Including Warren Buffett

In last month’s Wall Street Journal, columnist Jason Zweig recently wrote, “If I had to write one sentence that is true always and everywhere, it would be this: Smart investors did stupid things again today.” Zweig outlined a series of investing mistakes, including Warren Buffett’s 1993 purchase of Dexter Shoe Co. using over 25,000 shares of Berkshire Hathaway stock. By 2007, Zweig notes, Buffett said the company was “a worthless business.” But neither Buffett nor… Read More