Ian MacKechnie and Amscot Financial Story

Posted by Dave | Posted in Entrepreneurs, Inspiration | Posted on 29-04-2008-05-2008

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Amscot Financial

After seeing tiny yellow and blue check cashing shops popping up all over Florida street crossing corners, I wondered who was behind this phenomenal company and its astonishing growth. According to Currents Magazine, Ian MacKechnie, 62-year old Scotland-born American from Tampa, FL started the company in 1989. Today Amscot Financial is $85 million financial services (check cashing, money orders, tax, cash advances, etc) company that shows no signs of slowing down.

Ian MacKechnie is a serial entrepreneur who started and sold 2 multi-million dollar successful businesses MacKechnie Foods, a wholesale manufacturing baking company and Oliver’s, chain of coffee shops in Scotland/UK.

After reading about Tampa as one of the fastest growing cities in John Naisbitt’s Megatrends, he decided to move there and bought a baking business. However, surprisingly, business flopped. Luckily, he noticed his employees were cashing their paychecks not at banks, but at bars and liquor stores. The reason was convenience. Light bulb went off!

Amscot (derived from America and Scotland) with catchy slogan (“You’re OK with us”) is a very technologically advanced and keeps its stores clean. They give back to the community and knows as the “majority minority employer”.

Read full article.

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Warren Buffett Helps Mars Buy Wrigley

Posted by Dave | Posted in Investing, Warren Buffett | Posted on 28-04-2008-05-2008

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Warren Buffett today announced that he played a role ($6.5 billion) in Mars Inc.’s $23 billion purchase of Wm. Wrigley Jr. Co. He spoke on CNBC’s Squawk Box this morning. Watch the video and read full transcripts here.

In addition to buying $4.4 billion of Mars’s subordinated debt, Omaha, Nebraska-based Berkshire will pay $2.1 billion for an interest in Wrigley at an unspecified discount to the price being paid to shareholders, according to a statement today by Chicago-based Wrigley. Wrigley will become a private, stand-alone company owned by Mars.

Those of who follow Buffett’s Q&A with college students know that Warren Buffett uses Wrigley as an example many times over. For example, when he says he sticks to what he knows best and business that are simple – “chewing gum is as far as I have gone”. About Wrigley’s “moat” – “You give me a billion dollars and tell me to go into the chewing gum business and try to make a real dent in Wrigley’s. I can’t do it.”

During the interview to the question “when is it a good time buy a good business?” – He says “Well, I think a good time to buy a really great business is when you can do it. Many, many years ago, as I remember, Herman Lay offered the Frito-Lay company to Coca-Cola. And he offered them the company first, as I understand it, and they decided for one reason or another they didn’t want to do it then. And of course Pepsico bought it and it’s the best thing they ever did. So if you get a chance to buy a wonderful business, then my advice is, grab it. As Yogi Berra would say, ‘When you come to a fork in the road, take it.’”

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My Favorite Warren Buffett Quotes

Posted by Dave | Posted in Inspiration, Investing, Warren Buffett | Posted on 28-04-2008-05-2008

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What’s nice about investing is you don’t have to swing at every pitch.

The first rule is not to lose. The second rule is not to forget the first rule.

Price is what you pay and value is what you get.

In the short term, the market is a voting machine. In the long term, it is a weighing machine. (Explanation: The father of value investing, Benjamin Graham, explained this concept by saying that in the short run, the market is like a voting machine–tallying up which firms are popular and unpopular. But in the long run, the market is like a weighing machine–assessing the substance of a company. The message is clear: What matters in the long run is a company’s actual underlying business performance and not the investing public’s fickle opinion about its prospects in the short run.)

Stick with businesses you understand.

Never look back. There is so much to look forward to.

Don’t focus on macro economics stuff, predictions, etc. It is all irrelevant.

There seems to be some perverse human characteristic that likes to make easy things difficult.

We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.

It’s only when the tide goes out that you learn who’s been swimming naked

The market, like the Lord, helps those who help themselves. But unlike the Lord, the market does not forgive those who know not what they do.

Wall Street makes its money in activity, you make your money on inactivity.

Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good results.

It takes 20 years to build a reputation and 5 minutes to ruin it. If you think about that, you’ll do things differently.

I’d rather have a $10 million business making 15% than a $100 million business making 5%, I have other places I can put the money

Time is the friend of the wonderful business; it is the enemy of the lousy business. If you are in a lousy business for a long time, you will get a lousy result even if you buy it cheap. If you are in a wonderful business for a long time, even if you pay a little bit too much going in you will get a wonderful result if you stay in a long time.

It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.

Never ask a barber if you need a haircut.

I don’t try to jump over 7-foot hurdles: I look for 1-foot hurdles that I can step over.

We don’t get paid for activity, just for being right. As to how long we will wait, we’ll wait indefinitely.

When a management team with a reputation for brilliance joins a business with poor fundamental economics, it is the reputation of the business that remains intact.

I am a better investor because I am a businessman and a better businessman because I am an investor.

I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful.

A public-opinion poll is no substitute for thought.

Great investment opportunities come around when excellent companies are surrounded by unusual circumstances that cause the stock to be misappraised.

I always knew I was going to be rich. I don’t think I ever doubted it for a minute.

I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years.

Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.

Our favorite holding period is forever.

If a business does well, the stock eventually follows.

If past history was all there was to the game, the richest people would be librarians.

It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.

Let blockheads read what blockheads wrote.

Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it.

Of the billionaires I have known, money just brings out the basic traits in them. If they were jerks before they had money, they are simply jerks with a billion dollars.

Price is what you pay. Value is what you get.

Risk comes from not knowing what you’re doing.

Wide diversification is only required when investors do not understand what they are doing.

The business schools reward difficult complex behavior more than simple behavior, but simple behavior is more effective.

The investor of today does not profit from yesterday’s growth.

The only time to buy these junk bonds is on a day with no “y” in it. (NEVER!)

The smarter the journalists are, the better off society is. For to a degree, people read the press to inform themselves-and the better the teacher, the better the student body.

We enjoy the process far more than the proceeds.

Why not invest your assets in the companies you really like? As Mae West said, “Too much of a good thing can be wonderful”.

You do things when the opportunities come along. I’ve had periods in my life when I’ve had a bundle of ideas come along, and I’ve had long dry spells. If I get an idea next week, I’ll do something. If not, I won’t do a damn thing.

You only have to do a very few things right in your life so long as you don’t do too many things wrong.

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How To Think Like Warren Buffett

Posted by Dave | Posted in Investing, Warren Buffett | Posted on 26-04-2008-05-2008

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Justin McHenry over at Zen Personal Finance Blog has been writing series of articles titled “How To Think Like Warren Buffett” since 2006. In these series, he reviews Buffett’s annual Letters to Shareholders of Berkshire Hathaway. Nice read.

How to Think Like Warren Buffett, Part 1
How to Think Like Warren Buffett, Part 2
How to Think Like Warren Buffett, Part 3
How to Think Like Warren Buffett, Part 4
How to Think Like Warren Buffett, Part 5
How to Think Like Warren Buffett, Part 6
How to Think Like Warren Buffett, Part 7
How to Think Like Warren Buffett, Part 8
How to Think Like Warren Buffett, Part 9
How to Think Like Warren Buffett, Part 10
How to Think Like Warren Buffett, Part 11
How to Think Like Warren Buffett, Part 12
How to Think Like Warren Buffett, Part 13
How to Think Like Warren Buffett, Part 14
How to Think Like Warren Buffett, Part 15
How to Think Like Warren Buffett, Part 16
How to Think Like Warren Buffett, Part 17
How to Think Like Warren Buffett, Part 18
How to Think Like Warren Buffett, Part 19
How to Think Like Warren Buffett, Part 20
How to Think Like Warren Buffett, Part 21
How to Think Like Warren Buffett, Part 22
How to Think Like Warren Buffett, Part 23
How to Think Like Warren Buffett, Part 24
How to Think Like Warren Buffett, Part 25
How to Think Like Warren Buffett, Part 26
How to Think Like Warren Buffett, Part 27
How to Think Like Warren Buffett, Part 28
How to Think Like Warren Buffett, Part 29
How to Think Like Warren Buffett, Part 30

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Mike Hegedus: Mike On America

Posted by Dave | Posted in Entrepreneurs, Inspiration | Posted on 26-04-2008-05-2008

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Mike On AmericaI used to watch Mike Hegedus’ “Mike on America” feature segment during CNBC’s daily “On The Money” show. Since “On The Money” has been taken off the air recently, Mike has been reporting his features during “Power Lunch”. Mike Hegedus is an award-winning CNBC reporter whose “Mike On America” covers awesome business and entrepreneurial success stories across the United States and overseas.

Mike Hegedus’ Blog: MikeOnAmerica.CNBC.com

Check out one of his many videos below. While there, search for “Mike on America”, you will retrieve many other videos of his.

Mike on America
Mike on America

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The Timeline of Warren Buffett’s Life.

Posted by Dave | Posted in Investing, Warren Buffett | Posted on 23-04-2008-05-2008

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I did my best to compile Warren’s Buffett’s life into a timeline from the sources referenced at the bottom of the article. Project is nowhere close to an end yet. Your comments and suggestions will help me greatly to create comprehensive timeline.

1930

• Warren Buffett born August 30, 1930, Omaha, Nebraska
• Warren Buffett was born in Omaha, Nebraska to Howard Buffett, a stock broker and United States Representative, and his wife Leila Buffett. Warren Buffett displayed an extremely keen understanding of business and mathematics at a young age, easily doing complex mathematical computations in his head.
• He was also known as a book worm who displayed an insatiable hunger for knowledge pertaining to business and capital markets.

1941: (11 years old)

• He began working at his father’s brokerage at the age of 11, and that same year made his first stock purchase, buying Cities Services shares for $38.25 each. He sold them when the price reached $40, only to see them rocket to $200 a few years later. This taught him the importance of investing in good companies for the long term.

1943: (13 years old)

• Buffett filed his first income tax return, deducting his bicycle as a work expense for $35.
• Warren declares to a friend of the family that he will be a millionaire by the time he turns thirty, or “[I'll] jump off the tallest building in Omaha.”

1944: (14 years old)

• At the age of 14, he and a fellow high school student began installing pinball machines in barber shops, and he eventually spent his take of $1,200 to buy 40 acres of farmland which he then rented to tenant farmers. Although he excelled as a student, he felt college would be a waste given his success as an entrepreneur.

1945: (15 years old)

• In his senior year of high school, Buffett and a friend spent $25 to purchase a used pinball machine, which they placed in a barber shop. Within months, they owned three machines in different locations.

1946: (16 years old)

• He had already had money coming in from Wilson Coin Op, a pinball machine company he had started with a friend, as well as passive income streams coming from a farmer paying rent to him for the use of his farm, and he had saved $5,000 graduating near the top 20 in his class at the age of 16.

1947: (17 years old)

• Following his graduation from Washington, DC’s Woodrow Wilson High School in 1947, Warren attended the prestigious Wharton School at the University of Pennsylvania for three years. There he began his interest in investing after reading Benjamin Graham’s The Intelligent Investor.
• His father presses him to attend college, a suggestion Warren does not take well. Nevertheless, that year, he enrolls as a freshman at the Wharton School of Finance and Commerce in Pennsylvania. Buffett hates it, complaining he knows more than the teachers.

1948: (18 years old)

• At Wharton

1949: (19 years old)

• In 1949, he was initiated into Alpha Sigma Phi Fraternity while an undergraduate at the Wharton Business School at the University of Pennsylvania. His father and uncles were also Alpha Sigma Phi brothers from the chapter at Nebraska, where Warren eventually transferred.
• Transferred to University of Nebraska

1950: (20 years old)

• Buffett applies for admission to Harvard Business School and is turned down.
• After University of Nebraska, Buffett enrolled at Columbia Business School after learning that Benjamin Graham and David Dodd, two well-known securities analysts, taught there.

1951: (21 years old)

• He obtained a Master’s degree in economics in 1951 at Columbia Business School, studying under Benjamin Graham, alongside other future value investors including Walter Schloss and Irving Kahn. Another influence on Buffett’s investment philosophy was the well known investor and writer Philip Fisher. After receiving the only A+ Benjamin Graham ever handed out to a student in his security analysis class, Buffett wanted to work at Graham-Newman but was initially turned down. He went to work at his father’s brokerage as a salesman until Graham offered him a position in 1954. Buffett returned to Omaha two years later, when Graham retired.
• Buffett discovered Graham was on the Board of GEICO insurance at the time. After taking a train to Washington, D.C. on a Saturday, Buffett knocked on the door of GEICO’s headquarters until a janitor allowed him in. There, he met Lorimer Davidson, the Vice President, who was to become a lasting influence on him and life-long friend.
• He purchased a Sinclair gas station as a side investment, but that venture did not work out as well as he had hoped. During that time, Buffett also took a Dale Carnegie public speaking course. Using what he learned, he felt confident enough to teach a night class at the University of Nebraska, “Investment Principles.” The average age of the students he taught was more than twice his own.

1952: (22 years old)

• Buffett married Susan Thompson. They rent an apartment for $65 a month.

1953: (23 years old)

• His first child: daughter – Susie Buffett is born.

1954: (24 years old)

• His second child: son – Howard Graham Buffett is born.
• Benjamin Graham offered Buffett a job at his partnership with a starting salary of $12,000 a year. Here, he worked closely with Walter Schloss.

1955: (25 years old)

• Working at Graham-Newman

1956: (26 years old)

• Benjamin Graham retired and folded up his partnership.
• Buffett’s personal savings are now over $140,000.
• Buffett returned home to Omaha and created Buffett Associates, Ltd., an investment partnership, his first investment partnership. It was financed by a whopping $100 (Yeah, I did not miss any zeros; it is indeed one with two zeros) from Buffett, the general partner, and $105,000 from seven limited partners consisting of Buffett’s family and friends: his sister Doris, her husband, Aunt Alice, Dr. Thompson, his ex roommate Chuck Peterson, his mother and Dan Moren his lawyer.
• The same year he starts two more partnerships, one with physicist Homer Dodge who put in $120K.
• Buffett created several additional partnerships which were later consolidated as Buffett Partnership Limited. He ran the partnerships out of his bedroom, adhering closely to Graham’s investment approach and compensation structure. These investments made in excess of 30% compounded annually between 1956 to 1969, in a market where 7% to 11% was the norm.

1957: (27 years old)

• By the start of 1957, Buffet is managing three investment partnerships worth $300,000 from his home. Gain was 10.4% vs Dow -8.4%.
• Warren purchases a five-bedroom, stucco house on Farnam street. It cost $31,500
• Ed Davis, a prominent urologist, put up $100K. By the end of 1957 Buffett is running 5 partnerships totaling $500,000.

1958: (28 years old)

• Adds two more partnerships to his collection. Gain was 40.9% vs Dow 38.5%.
• He is now managing five investment partnerships from his home.
• His third child: son – Peter Andrew Buffett is born.
• The third year of the partnership completed, Buffett doubles the partner’s money.

1959: (29 years old)

• Warren is introduced to Charlie Munger, who will eventually
become the Vice Chairman of Berkshire Hathaway, and an integral part of
the company’s success. The two get along immediately.
• Buffett had six partnerships operating the entire year. Gain was 25.9% vs Dow 19.9%.

1960: (30 years old)

• Buffett had seven partnerships operating the entire year. Gain was 22.8% vs Dow -6.3%.
• The partnerships were: Buffett Associates, Buffett Fund, Dacee, Emdee, Glenoff, Mo-Buff, and Underwood.
• Buffett asks one of his partners, William Angle, a cardiologist, if he could get ten other doctors who will be willing to invest $10,000 each into his partnership. Eventually, eleven doctors agreed to invest.

1961: (31 years old)

• Buffett made his first $1 million dollar investment in a windmill manufacturing company.
• Buffett revealed that Sanborn Map Company accounted for 35% of the partnerships’ assets.
• Buffett explained that in 1958, Sanborn sold at $45 per share when
the value of the Sanborn investment portfolio was $65 per share. This
meant buyers valued Sanborn at “minus $20″ per share, and buyers were
unwilling to pay more than 70 cents on the dollar for an investment
portfolio with a map business thrown in for nothing.
• Buffett reveals that he earned a spot on the board of Sanborn.
• Buffett had eight partnerships operating the entire year. Gain was 45.9% vs Dow 22.2%.

1962: (32 years old)

• Buffett’s partnerships, in January 1962, had in excess of $7,178,500 of which over $1,025,000 (The first million) belonged to Buffett. The partnership has 90 people.
• Buffett merges all partnerships into one partnership.
• Buffett discovered a textile manufacturing firm, Berkshire
Hathaway. Buffett’s partnerships began purchasing shares at $7.60 per
share.
• Buffett returns to New York with Susie for a few weeks to raise
capital from his old acquaintances. During the trip, he picks up a few
partners and several hundred thousand dollars.
• The Buffett Partnership, which had begun with $105,000, was now worth $7.2 million.
• Warren and Susie personally own over $1 million of
the assets. Buffett merges all of the partnerships into one entity
known simply as Buffett Partnerships, Ltd. The operations are moved to
Kiewit plaza, a functional but less-than-grand office, where they
remain to this day. The minimum investment is raised from $25,000 to
$100,000.
• Buffett consults Munger on Dempster, the windmill manufacturing company. Buffett buys a controlling interest in Dempster Mill Manufacturing, a Nebraska maker of windmills and farm implements, and appoints himself chairman.
• Munger recommends Harry Bottle to Warren; a move that would
turn out to be very profitable. Bottle cut costs, laid off workers, and
caused the company to generate cash.

1963: (33 years old)

• Buffett sells Dempster for 3x the amount he invested. The almost
worthless company had built a portfolio of stocks worth over $2 million
alone during the time of Buffett’s investment.
• The Buffett partnerships becomes the largest shareholder of Berkshire Hathaway.
• When Buffett’s partnerships began aggressively purchasing Berkshire they paid $14.86 per share while the company had working capital (current assets minus current liabilities) of $19 per share, this did not include the value of fixed assets (factory and equipment).

1964: (34 years old)

• Due to a fraud scandal, American Express shares fall to $35. While the world is selling the stock, Buffett begins to buy shares en masse.

1965: (35 years old)

• Warren’s father, Howard, dies.
• Buffett begins to purchase shares in Walt Disney Co. after meeting with Walt personally. Warren invested $4 million (~ 5% of the company).
• The American Express shares which were purchased shortly before are selling for more than double the price Warren paid for the them.
• Buffett arranges a business coup – taking control of Berkshire Hathaway at the board meeting and naming a new President, Ken Chace, to run the company.

1966: (36 years old)

• Warren’s personal investment in the partnership reaches $6,849,936.
• Buffett closes the partnership to new money.
• Buffett wrote in his letter “unless it appears that circumstances have changed (under some conditions added capital would improve results) or unless new partners can bring some asset to the partnership other than simply capital, I intend to admit no additional partners to BPL.”
• In a second letter, Buffett announced his first investment in a private business — Hochschild, Kohn and Co, a privately owned Baltimore department store.

1967: (37 years old)

• Berkshire pays out its first and only dividend of 10 cents.
• His partnership is now worth $65 million. Buffett is worth, personally, more than $10 million.
• In October, Warren writes to his partners and tells them he finds
no bargains in the roaring stock market of the ’60s.
• He briefly considers leaving investing and pursuing other interests.
• American Express hits over $180 per share, making the partnership $20 million in profit on a $13 million investment. Making the partnership $20 million in profit on a $13 million investment.
• Berkshire Hathaway acquires National Indemnity insurance at Buffett’s direction. It pays $8.6 million ($50/share).
• In successive years Buffett buys from the float of National Indeminity companies like: i) Sun Newspaper of Omaha. ii) Rockford Bank.

1968: (38 years old)

• The partnership pulled its biggest coup in 1968, recording a 59.0% gain in value, catapulting to over $104 million in assets.

1969: (39 years old)

• Following his most successful year, Buffett liquidated the
partnership and transferred their assets to his partners. Among the
assets paid out were shares of Berkshire Hathaway.
• Buffett closes his partnership, worth $100 million, and pockets $25 million.
• Buffett’s partners were later referred to Bill Ruane, a Graham follower and the person setting up the Sequoia Fund.
• Buffett created Berkshire Hathaway, after shutting down his 13-year-long partnership with a select group of seven recruited investors.

1970: (40 years old)

• The Buffett Partnership is now completely dissolved and divested
of its assets. Warren now owns 29% of the stock outstanding in Berkshire Hathaway. He names himself chairman and begins writing the annual letter to shareholders.
• Berkshire makes $45,000 from textile operations, and $4.7 million in insurance, banking, and investments. Warren’s side investments are making more than the actual company itself.
• Berkshire Hathaway starts investing in Blue Chip Stamps, which eventually merged in 1983.

1971: (41 years old)

• Warren [at his wife's request], purchases a $150,000 summer home at Laguna Beach.

1972: (42 years old)

• Blue Chip Stamps acquires See’s Candy Shops.

1973: (43 years old)

• Berkshire began to acquire stock in the Washington Post Company. Buffett became close friends with Katharine Graham, who controlled the company and its flagship newspaper, and became a member of its board of directors.
• Stock prices begin to drop; Warren is euphoric. At his direction, Berkshire issues notes at 8%.

1974: (44 years old)

• Due to falling stock prices, the value of Berkshire’s stock portfolio began to fall. Warren’s personal wealth was cut by over 50%.
• The SEC opens a formal investigation into Warren Buffett and one of Berkshire’s mergers. Nothing ever comes of it.

1975: (45 years old)

• Buffett merges Berkshire and Diversified, the firm controlled by Munger. Munger gets 2% stock of Berkshire and becomes its vice chairman.

1976: (46 years old)

• In April 1976 Berkshire invests $4 million in GEICO when its stock price was just above $2. This was first of the series of purchases that will last till 1996 when he completely buys GEICO.

1977: (47 years old)

• Berkshire indirectly purchases the Buffalo Evening News for $32.5 million.
• He would later be brought up on antitrust charges by a competing paper.
• Susie leaves Warren, although not officially divorcing him. Warren is crushed.

1978: (48 years old)

• Susie introduces Warren to Astrid Menks, who eventually moves in with him.

1979: (49 years old)

• Berkshire trades at $290 per share. Warren’s personal fortune is approximately $140 million.
• But he was living solely on a salary of $50,000 per year.
• Berkshire begins to acquire stock in ABC.
• Berkshire began the year trading at $775 per share, and ended at $1,310.
• Buffett’s net worth reached $620 million, placing him on the Forbes 400 for the first time. (Questionable…)

1981: (51 years old)

• Munger and Buffett create the Berkshire Charitable Contribution plan, allowing each shareholder to donate some of the company’s profits to his or her personal charities.

1982: (52 years old)

• Evening News became the only local newspaper of Buffalo and its name is changed to Buffalo News. It becomes a goldmine for Buffett. The newspaper earned $19 million in its first year without competition. By the late eighties the Buffalo News will earn $40 million/year, way more than what Buffett had invested.

1983: (53 years old)

• Berkshire ends the year with $1.3 billion in its corporate stock portfolio.
• Buffett purchases Nebraska Furniture Mart for $60 million. It turns out to be one of his best investments yet.
• Berkshire Hathaway fully acquires Blue Chip Stamps.

1984: (54 years old)

• Buffett returns to his Alma Mater, Columbia University, and gives a famous speech “The Superinvestors Of Graham-And-Doddsville” commemorating the fiftieth anniversary of Security Analysis, book written by Benjamin Graham and David L. Dodd.

1985: (55 years old)

• Buffett finally shuts down the Berkshire textile mills after years of sustaining it. He refuses to allow it to drain capital from shareholders.
• Warren helps orchestrate the merger between ABC and Cap Cities.
• He is forced to leave the Board of the Washington Post [Federal legislation prohibited him sitting on the Boards of both Capital Cities and Kay Graham’s Washington Post.
• Buffett purchases Scott & Fetzer for Berkshire’s collection of businesses. It costs around $315 million, and boasts such products
as Kirby vacuums and the World Book Encyclopedia.

1986: (56 years old)

• Berkshire breaks $3,000 per share.

1987: (57 years old)

• In the immediate crash and aftermath of October, Berkshire loses 25% of its value.
• Dropping from $4,230 per share to around $3,170. The day of the crash, Buffett loses $342 million personally.

1988: (58 years old)

• Buffett began buying stock in Coca-Cola Company, eventually purchasing up to 7 percent of the company for $1.02 billion. It would turn out to be one of Berkshire’s most lucrative investments, and one which it still holds.

1989: (59 years old)

• He spent $9.7 million of Berkshire’s funds on a business jet in 1989, he jokingly named it “The Indefensible” because of his past criticisms of such purchases by other CEOs.
• Acquired Borsheim’s, jewelry retailer from Friedman Family.

1990: (60 years old)

• Scandals involving Greenberg and Gutfreund appear.
• Buffett buys 10% of Wells Fargo (WFC) bank. The reason being that Carl Reichardt, the chairman of the bank who was famous for slashing costs , had once sold his jet to cut costs and Buffett appreciated this gesture.

1991: (61 years old)

• Buffett served as CEO of Solomon Brothers following firm’s treasury bond trading scandal.

1992: (62 years old)

• Buffett continued serving as interim Chairman of Solomon Brothers following firm’s treasury bond trading scandal.

1993: (63 years old)

• Buffett purchased the Dexter Shoe Co, one of his worst investments.

1994: (64 years old)

• The Bestseller “The Warren Buffett Way” by Robert G. Hagstrom Jr. is published.

1995: (65 years old)

• Acquired Helzberg’s Diamond Shops.
• Acquired R.C. Willey Home Furnishings.

1996: (66 years old)

• Fully acquired GEICO.

1997: (67 years old)

• Acquired Star Furniture Co., furniture retailer.
• Acquired International Dairy Queen, Inc.
• Makes investment in Silver (less than 2 % of investment portfolio)
• Almost loses shirt in US Airways investment.

1998: (68 years old)

• Acquires General Re, reinsurer.
• Acquires Executive Jet, Inc., the world’s leading provider of fractional ownership programs for general aviation aircraft. Executive Jet currently operates its NetJets® fractional ownership programs in the United States and Europe.

1999: (69 years old)

• Acquires Jordan’s Furniture Company, the Massachusetts based furniture powerhouse.
• Acquires part of MidAmerican Energy Holdings Company, utility company.

2000: (70 years old)

• Buffett is named the top money manager of the 20th century in a survey by the Carson Group, ahead of Peter Lynch and John Templeton.
• Wesco Financial Corporation, publicly traded, 80.1% owned subsidiary of Berkshire Hathaway Inc. acquires CORT, the leading national provider of rental furniture, accessories and related services in the growing “rent-to-rent” furniture rental industry.
• Acquires Ben Bridge Jeweler.
• Acquires Justin Industries includes Acme Building Brands – Acme Brick Company.
• Acquires Shaw Industries, Inc., the world’s largest manufacturer of tufted broadloom carpet.
• Acquires Benjamin Moore & Co. Benjamin Moore, a leading manufacturer and retailer of premium paints, stains and industrial coatings, was founded in 1883.
• Acquires Johns Manville, a leading manufacturer and marketer of premium-quality building products.

2001: (71 years old)

• Acquired Johns Manville Corp, a leading manufacturer and marketer of premium-quality building products.
• Acquired MiTek, headquartered in Chesterfield, Missouri, the world’s leading provider of steel connector products, design engineering software and ancillary services for the global building components market.
• Acquired XTRA Corporation, which leases, primarily on an operating basis, over-the-road trailers, marine containers, and intermodal equipment, including intermodal trailers, chassis and domestic containers.
• Acquired Fruit of the Loom, Inc., apparel manufacturer.
• Acquired Albecca, which designs, manufactures, and distributes a complete line of high-quality, branded custom picture framing products.

2002: (72 years old)

• Buffett entered in $11 billion worth of forward contracts to deliver US dollars against other currencies.
• By April 2006, his total gain on these contracts was over $2 billion.
• Berkshire Hathaway acquires Garan, a leading manufacturer of children’s, women’s, and men’s apparel bearing the private labels of its customers as well as various of its own trademarks, including GARANIMALS.
• Berkshire Hathaway acquires CTB, a leading designer, manufacturer and marketer of equipment and systems for the poultry, hog, egg production and grain industries.
• Berkshire Hathaway acquires The Pampered Chef from its founder and Chairman, Doris K. Christopher, and her family. The Pampered Chef is the largest branded kitchenware company and the largest direct seller of housewares in the U.S., with more than 67,000 “Kitchen Consultant” sales representatives.

2003: (73 years old)

• EBay auctions of lunch with Buffett for $250,100.
• Berkshire Hathaway acquires McLane, based in Temple, Texas, one of the nation’s largest wholesale distributors of groceries and nonfood items to convenience stores, drug stores, wholesale clubs, mass merchandisers, quick service restaurants, theaters and others.
• Berkshire Hathaway acquires Clayton Homes, Inc., a manufactured housing company.
• Berkshire Hathaway acquires Burlington Industries, one of the world’s most diversified marketers and manufacturers of softgoods for apparel and interior furnishings.

2004: (73 years old)

• Buffett’s wife, Susan, dies of a stroke in Wyoming, where the couple was visiting friends.
• Bill Gates Elected as Director of Berkshire Hathaway.

2005: (74 years old)

• Ebay auction lunch with Buffett sells for $351,100.
• General Electric and Berkshire Hathaway announced that GE Insurance Solutions has entered into a letter of intent for the sale of Medical Protective Corporation, one of the nation’s premiere professional liability insurers for physicians and dentists, to National Indemnity, a unit of Berkshire Hathaway.
• Berkshire Hathaway acquires Forest River from its founder and CEO, Peter J. Liegl. Forest River is a leading manufacturer of leisure vehicles in the U.S. The company manufactures a complete line of motorized and towable recreation vehicles, utility trailers, buses, boats and manufactured houses.
• Despite insurance business losses of about $2.5 billion caused by Hurricane Katrina, Berkshire records a $5.6 billion gain in its net worth.

2006: (75 years old)

• Ebay auction lunch with Buffett sells for $620,100.
• Buffett announced in June that he would give away more than 80%, or about $37 billion, of his $44 billion fortune to five foundations in annual gifts of stock, starting in July 2006. The largest contribution will go to the Bill and Melinda Gates Foundation.
• He auctioned his 2001 Lincoln Town Car on eBay to raise money for Girls Inc.
• Buffett marries Astrid Menks.
• Berkshire Hathaway acquires Business Wire, a privately held company that is a leading global distributor of corporate news, multimedia and regulatory filings.
• Berkshire Hathaway acquires Russell Corporation, a leading branded athletic and sporting goods company.
• Berkshire Hathaway has agreed to acquire 80% of the Iscar Metalworking Companies (IMC) in a transaction that values IMC at US$5 billion. The Iscar Metalworking Companies is a privately held group, with operations worldwide, and is an industry leader in the metal cutting tools business through its Iscar, TaeguTec, Ingersoll and other IMC group companies.
• Berkshire Hathaway announced the successful completion of its acquisition of Applied Underwriters, the industry leader in integrated workers’ compensation solutions and all of its subsidiaries — including its North American Casualty insurance companies.
• Berkshire Hathaway acquires TTI, Inc., a privately held electronic component distributor headquartered in Fort Worth, Texas.

2007: (76 Years old)

• Ebay auction lunch with Buffett sells for $650,100. One of two investors who put up the bid was Mohnish Pabrai, famous value investor.
• Buffett looking for a younger successor or perhaps successors to run his investment business.
• In a letter to shareholders, Buffett announced that he was looking for a younger successor or perhaps successors to run his investment business. Buffett had previously selected Lou Simpson, who runs investments at Geico, to fill that role. However, Simpson is only six years younger than Buffett.
• Buffett travels to Asia – China to visit Iscar’s plant and South Korea.
• Berkshire Hathaway acquires Boat America Corporation, which owns Seaworthy Insurance Company and controls the Boat Owners Association of the United States.
• Berkshire Hathaway acquires leading jewelry manufacturers Bel-Oro International and Aurafin LLC, which were merged into Richline Group.
• Berkshire Hathaway acquires 60% of Marmon Holdings, Inc. formerly owned by Jay Pritzker family.

2008: (77 Years old)

• Buffett becomes the richest man in the world according to Forbes.

Source:

http://www.berkshirehathaway.com

http://en.wikipedia.org/wiki/Warren_Buffett

http://warren-buffett-timeline.blogspot.com

http://beginnersinvest.about.com/cs/warrenbuffett/a/aawarrentimeln.htm

http://seekingalpha.com/article/42100-50-checkpoints-of-warren-buffett-s-carreer

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Steve Jobs: Stay Hungry. Stay Foolish.

Posted by Dave | Posted in Inspiration | Posted on 22-04-2008-05-2008

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One of the best Graduation Commencement Speeches was given by none other than Steve Jobs of APPLE at Stanford in 2005.

Click here for transcripts.

Some excerpts:

Connecting the dots.

Again, you can’t connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something — your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life.

Do what you love to do.

Sometimes life hits you in the head with a brick. Don’t lose faith. I’m convinced that the only thing that kept me going was that I loved what I did. You’ve got to find what you love. And that is as true for your work as it is for your lovers. Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. If you haven’t found it yet, keep looking. Don’t settle. As with all matters of the heart, you’ll know when you find it. And, like any great relationship, it just gets better and better as the years roll on. So keep looking until you find it. Don’t settle.

“If today were the last day of my life, would I want to do what I am about to do today?” And whenever the answer has been “No” for too many days in a row, I know I need to change something. Remembering that I’ll be dead soon is the most important tool I’ve ever encountered to help me make the big choices in life.

Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma — which is living with the results of other people’s thinking. Don’t let the noise of others’ opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.

“Stay Hungry. Stay Foolish.”

Watch the video below.

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Serious Money: The Page on Buffett

Posted by Dave | Posted in General, Investing, Warren Buffett | Posted on 21-04-2008-05-2008

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Blogging Stocks author Sheldon Liber has been posting the series of articles on Warren Buffett:

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All roads lead to Graham and Doddsville

Posted by Dave | Posted in Investing, Warren Buffett | Posted on 20-04-2008-05-2008

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George Gabriel, CFA posted a nice article on GuruFocus.com. I liked most the part regarding the six components of value:

1. “Net-Net” valuation method. It attributes value only to the net current assets (current assets minus current liabilities) of the company and attributes zero value to property, plant & equipment or any other long-term assets.

2. Liquidation value of assets. (self-explanatory)

3. Book Value of Assets. (also self-explanatory)

4. Reproduction value of assets. Reproduction valuation measures what it would cost to reproduce the market position of a particular company.

5. Valuation of the Earnings of the Business. Future Free Cash Flow discounted back to present.

6. Franchise Value. The wider the moats, the more valuable the company is.

READ FULL ARTICLE

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What Warren thinks…

Posted by Dave | Posted in Investing, Warren Buffett | Posted on 19-04-2008-05-2008

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Warren BuffettDuring April 2008, University of Pennsylvania’s Wharton School students were invited to visit Warren Buffett in his hometown Omaha, Nebraska. A reported from Fortune Magazine also accompanied them.

How do you get your ideas?

I just read. I read all day. I mean, we put $500 million in PetroChina. All I did was read the annual report.

What advice would you give to someone who is not a professional investor? Where should they put their money?

Well, if they’re not going to be an active investor – and very few should try to do that – then they should just stay with index funds. Any low-cost index fund. And they should buy it over time. They’re not going to be able to pick the right price and the right time. What they want to do is avoid the wrong price and wrong stock. You just make sure you own a piece of American business, and you don’t buy all at one time.”

READ THE FULL ARTICLE

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