„Buffett – The making of an American Capitalist” – Roger Lowenstein

Ocena: 8/10

Najlepszy inwestor XX wieku i może najlepszy w historii. Świetnie napisane i wciąga od pierwszych stron. Również sama filozofia życiowa Buffetta jest inspirująca.

Moje notatki

His life is his work; food and shelter are minor matters. Buffett still drives his own car, a blue Lincoln Town Car. He has no fancy automobiles or homes, and he would not be interested in them if he had. On a recent two-week stay at his ocean-view home in Laguna Beach, he went out of the house but three times—twice to a movie and once to have lunch (his daughter counted). He still plays bridge, but usually via a computer (which he refuses to use for work) many miles away from his partners.

If we have lost the people with Emersonian inner conviction, it is because we have lost the fixed stars that formerly guided them. The modern relativism has reduced us all to being timid specialists, peeping out from cubbyholes marked “growth” and “derivative.” For similar reasons—the lack of intrinsic value systems—educators waffle and juries seem unable to convict. They retreat, as it were, into ambiguity, complexity, and cacophony. Where one conviction is lacking, a thousand opinions will do—indeed, they become a necessary recourse. Our captains seem the smaller for it, not only on Wall Street but in industry, education, government, and public life in general.

To Buffett, the growth/value distinction has always been illusory. He sees the growth potential of a business as a component of its value, just as its assets are a component.21 At a price, Coca-Cola’s potential represents good value; at some higher price, it does not. The point is that Buffett views all investing, and all that he has ever attempted, as “value investing.” Anything else, he wrote a year after the Salomon episode, is unworthy of the name: What is “investing” if it is not the act of seeking value at least sufficient to justify the amount paid? Consciously paying more for a stock than its calculated value—in the hope that it can soon be sold for a still-higher price—should be labeled speculation. . .

It is scarcely implausible that Buffett’s fear of death has contributed to his drive to accumulate. Agnostic and hyperrational, he has few other opiates. His one passion has been to collect—not money, precisely, but tangible evidence of himself. He clings to his friends, his house, his old foods and stock lines, and his stocks themselves. Notably, he says he does not enjoy running businesses; he enjoys owning them.

Among history’s great capitalists, Buffett stands out for his sheer skill at evaluating businesses. What John D. Rockefeller, the oil car-telist, Andrew Carnegie, the philanthropic steel baron, Sam Walton, the humble retailer, and Bill Gates, the software nerd, have in common is that each owes his fortune to a single product or innovation. Buffett made his money as a pure investor: picking diverse businesses and stocks.

Forecasts may tell you a great deal about the forecaster; they tell you nothing about the future.

Inwardly, it was killing him. Perhaps the most stressful aspect was that Buffett was not used to working with people who were not personally loyal to him. “It’s agony,” Munger said that spring. “It’s just bloody murder. Salomon is losing key employees even as we speak.”

You can frighten people into behaving themselves for a while. But in the long run he’s wrong. . . . Thus we arrive at what might be called Buffett’s Dilemma: the choice between doing good and making money. In fact, it was Lewis who had made that choice. Buffett, under extremely trying circumstances, was attempting to do both. Buffett’s repeated exhortation—”Good profits simply are not inconsistent with good behavior”—was a challenge to Lewis’s (and other cynics’) rationalizations.

Munger said the Buffett style was “perfectly learn-able.” Don’t misunderstand. I do not think that tens of thousands of people can perform as well. But hundreds of thousands can perform quite well—materially…

Buffett said it did not require a formal education, nor even a high IQ. What mattered was temperament. He would illustrate this with a little game at business schools. Suppose, he would tell a class, each student could be guaranteed 10 percent of one of their classmates’ future earnings. Whom would they choose? The students would start to scrutinize one another intently. They weren’t looking for the smartest, necessarily, Buffett would observe, but for someone with the intangibles: energy, discipline, integrity, instinct. What mattered most was confidence in one’s own judgment, from which would flow the Kiplingesque cool to keep one’s head “when all about you are losing theirs.” In market terms, if you knew what a stock was worth—what a business was worth—then a falling quote was no cause for alarm. Indeed, before he invested in a stock, Buffett wanted to feel sufficiently comfortable so that if the market were to close for a period of years…

Buffett tried to find stocks whose “value” was greater—significantly greater—than their price. Buffett’s guides to finding such a stock could be summarized quickly: • Pay no attention to macroeconomic trends or forecasts, or to people’s predictions about the future course of stock prices. Focus on long-term business value—on the size of the coupons down the road. • Stick to stocks within one’s “circle of competence.” For Buffett, that was often a company with a consumer franchise. But the general rule was true for all: if you didn’t understand the business—be it a newspaper or a software firm—you couldn’t value the stock. • Look for managers who treated the shareholders’ capital with ownerlike care and thoughtfulness. • Study prospects—and their competitors—in great detail. Look at raw data, not analysts’ summaries. Trust your own eyes, Buffett said. But one needn’t value a business too precisely. A basketball coach doesn’t check to see if a prospect is six foot one or six foot two; he looks for seven-footers. • The vast majority of stocks would not be compelling either way—so ignore them. Merrill Lynch had an opinion on every stock; Buffett did not. But when an investor had conviction about a stock, he or she should also show courage—and buy a ton of it.

Investors such as Buffett thought of intrinsic value as an inherent quality; it lay “behind, or beneath, the prices observed in the marketplace.”8 The prices themselves were approximations. But to a classicist, the Invisible Hand was perpetually driving market prices and value together. In the extreme view, value only emerged—in a sense, only existed—at the point when buyer and seller agreed on a price. If IBM was trading at $120 a share, then IBM was “worth” $120; it could not be more or less. Of course, this implied that the buyer and seller were acting rationally.

Without due recognition of crowd-thinking (which often seems crowd-madness) our theories of economics leave much to be desired.

This ability of Buffers to cut through the clutter suggests a certain genius. Buffett focused so exquisitely on his object, and his simplicity was a counterpart to that genius. He recognized that layers of added executives—though each might be bright, earnest, well-intentioned, etc.—would blur his focus. Much of the “work” they might “accomplish” would be unnecessary work. (A Buffett aphorism: “That which is not worth doing is not worth doing well.”). He did not like protracted decision-making or drawn-out and contentious bargaining. His negotiating style was to seek or propose offers on a take-it-or-leave-it basis. And once he made a decision he did not reverse it.

And groundbreaking as they were, Graham’s writings did not explain in full the hold he had on his disciples. Unlike other Wall Street practitioners, Graham was open with his thoughts and freely shared his ideas. Wall Street interested him merely as an abstraction—the money meant nothing to him. In a field that was filled with narrow minds, Graham was also classical scholar, a student of Latin and Greek, a translator of Spanish poetry, and the author of a Broadway play—which closed in four nights. Oddly, for one who revolutionized investing, he spent much of his time working on quirky avocations and inventions, such as a new kind of slide rule and “more practical” pieces of furniture. (That was abstract, too; it is unlikely that Graham ever held a hammer.) He was short, with penetrating, light blue eyes and thick lips—”a funny little guy, sort of ugly,” as an associate said—but possessed of a spark.

Buffett avoided trying to forecast the stock market, and most assuredly avoided buying or selling stocks based on people’s opinions of it. Rather, he tried to analyze the long-term business prospects of individual companies. This owed to his bias for logical reasoning. One could “predict” the market trend, as one could predict which way a bird would fly when it left the tree. But that was guesswork—not analysis. If he ever sold stocks “just because some astrologer thinks the quotations may go lower,” he warned, they would all be in troubled.

Buffett was as fearful of inflation as anyone. His response was to hunt for stocks, such as newspapers, that would be able to raise rates in step. Similarly, he avoided companies with big capital costs. (In an inflationary world, capital-intensive firms need more dollars to replenish equipment and inventory.)

His approach to life—of particular use to an investor—was to ask what could go wrong. He liked to quote the algebraist Carl Jacobi: “Invert, always invert.” Thus, at a high school commencement, Munger gave a sermon not on the qualities that would lead to happiness, but on those that would guarantee a miserable life. Always invert.

Ironically, Buffett’s inadequacy as an epicure enlightened him as to what the company was really “selling.” Maybe grapes from a little eight-acre vineyard in France are really the best in the whole world, but I have always had a suspicion that about 99% of it is in the telling and about 1% is in the drinking…

Yet Munger was a formidable armchair psychologist and, in particular, a student of behavior. He saw the devil in such phenomena as the inability of people to change their minds, or what he termed “first-conclusion bias

One time, Buffett said an investor should approach the stock market as if he had a lifetime punch card. Every time he bought a stock he punched a hole. When the card had twenty holes he was done—no more investing for life. Obviously, the investor would filter out every idea but the best. Lou Simpson, who was managing GEICO’s portfolio, said this parable had a profound impact on him.

“All Warren needs to be happy is a book and a sixty-watt bulb.”