Jude Wanniski is one of my greatest teachers. I learnt a lot of fundamental knowledge in financial history, such as gold standard and inflation, from his website, http://www.wanniski.com. After his death a few years ago, the website continued to run until it has stopped recently.
Fortunately, his essays and teaching are still available on a new website: http://www.polyconomics.com/ssu.html
Please spend some time and check it out.
2008年6月29日星期日
2008年6月28日星期六
2008年6月6日星期五
多 難 豆 腐 渣
胡 錦 濤 是 幹 實 事 的 ， 並 非 演 藝 界 一 員 ， 遣 詞 造 句 ， 政 治 100% 正 確 到 不 得 了 ， 所 以 永 遠 不 會 向 災 民 許 下 「 認 定 了 這 是 一 輩 子 的 承 諾 」 。 反 觀 溫 家 寶 ， 左 一 句 政 府 會 管 好 你 們 ， 右 一 句 政 府 會 照 顧 你 們 ， 讓 人 差 點 以 為 ， 512 關 愛 行 動 那 首 主 題 曲 是 他 老 人 家 幕 後 操 刀 填 詞 。 溫 總 在 黑 板 奮 書 「 多 難 興 邦 」 ， 滿 懷 書 生 悲 國 難 的 熱 血 腔 ， 胡 主 席 沒 這 麼 浪 漫 ， 他 一 言 九 鼎 的 是 「 一 方 有 難 ， 八 方 支 援 ， 自 力 更 生 ， 艱 苦 奮 鬥 」 。 用 廣 東 話 解 讀 ， 就 是 叫 你 自 己 執 生 ！ 油 尖 潮 語 講 法 ， 就 是 請 閣 下 「 食 自 己 」 ， 自 己 看 辦 ， 阿 爺 射 唔 住 你 ！
多 難 興 邦 ， 難 免 落 入 日 劇 化 的 對 白 的 窠 臼 ， 追 本 溯 源 ， 多 難 的 源 頭 是 豆 腐 渣 工 程 ， 讓 辛 苦 把 孩 子 送 入 學 校 念 書 的 家 長 ， 希 望 瞬 間 化 為 烏 有 。 是 誰 讓 邦 國 多 難 ？ 就 是 一 方 有 難 ， 自 己 率 先 逃 離 現 場 的 那 批 豆 腐 渣 工 程 主 謀 人 。 育 部 沒 有 負 責 人 因 為 九 千 多 條 學 童 的 人 命 而 丟 官 ， 多 難 興 旺 了 的 ， 是 不 要 臉 的 幹 部 和 跟 他 們 有 裙 帶 關 係 包 攬 豆 腐 渣 工 程 直 接 殺 害 學 童 的 這 些 人 。 孩 子 死 了 ， 家 長 捧 遺 照 在 校 外 守 了 三 日 三 夜 的 靈 ， 哪 裏 見 到 有 關 領 導 人 去 向 問 候 一 聲 ？ 中 央 台 集 中 重 播 的 是 「 陳 堅 最 後 72 小 時 」 和 解 放 軍 戰 士 救 災 扶 危 的 報 道 ， 陳 堅 遭 救 援 人 員 心 外 壓 時 壓 得 胸 腔 怪 響 的 鏡 頭 叫 人 看 得 會 倒 背 了 ， 中 央 台 幾 時 才 會 對 豆 腐 渣 下 的 亡 魂 ， 有 個 「 說 法 」 ？
陳也 - 蘋果日報
多 難 興 邦 ， 難 免 落 入 日 劇 化 的 對 白 的 窠 臼 ， 追 本 溯 源 ， 多 難 的 源 頭 是 豆 腐 渣 工 程 ， 讓 辛 苦 把 孩 子 送 入 學 校 念 書 的 家 長 ， 希 望 瞬 間 化 為 烏 有 。 是 誰 讓 邦 國 多 難 ？ 就 是 一 方 有 難 ， 自 己 率 先 逃 離 現 場 的 那 批 豆 腐 渣 工 程 主 謀 人 。 育 部 沒 有 負 責 人 因 為 九 千 多 條 學 童 的 人 命 而 丟 官 ， 多 難 興 旺 了 的 ， 是 不 要 臉 的 幹 部 和 跟 他 們 有 裙 帶 關 係 包 攬 豆 腐 渣 工 程 直 接 殺 害 學 童 的 這 些 人 。 孩 子 死 了 ， 家 長 捧 遺 照 在 校 外 守 了 三 日 三 夜 的 靈 ， 哪 裏 見 到 有 關 領 導 人 去 向 問 候 一 聲 ？ 中 央 台 集 中 重 播 的 是 「 陳 堅 最 後 72 小 時 」 和 解 放 軍 戰 士 救 災 扶 危 的 報 道 ， 陳 堅 遭 救 援 人 員 心 外 壓 時 壓 得 胸 腔 怪 響 的 鏡 頭 叫 人 看 得 會 倒 背 了 ， 中 央 台 幾 時 才 會 對 豆 腐 渣 下 的 亡 魂 ， 有 個 「 說 法 」 ？
陳也 - 蘋果日報
2008年5月21日星期三
地震雲
Today I found another interesting article on pre-earthquake phenomenon, known as EARTHQUAKE CLOUD.
早在17世紀中國古籍中就有“晝中或日落之後，天際晴朗，而有細雲如一綫，甚長，震兆也”的記載，1935年我國寧夏的隆德縣《重修隆德縣志》中記載有“天晴日暖，碧空清淨，忽見黑雲如縷，婉如長蛇，橫臥天際，久而不散，勢必爲地震”
但是，世界各國對于地震雲的研究還是最近幾年的事，其中以我國和日本處于領先地位，我國對地震雲的研究始于1976年唐山大地震之後，目前成功的例證有十餘個，日本利用地震雲預報地震成功的例證有上百個，有趣的是，首先提出“地震雲”這個名字的不是地震學者，而是一政治家，他就是日本前福岡市市長鍵田忠三郎，他曾經親身經曆過日本福岡1956年的7級地震，幷且在地震時親眼看到天空中有一種非常奇特的雲，以後只要這種雲出現，總有地震相應發生，所以他就把這樣的雲稱爲“地震雲”。
那麽，什麽樣的雲才是地震雲呢？這種雲的最大特點在于“奇”，與一般的雲有著明顯的區別。
蔚藍的天空中有時會留下一條飛機的尾迹，常見的條帶狀地震雲很像飛機的尾迹，不過更加厚實和豐滿些，它一般預示震中處于雲向的垂直綫上。
另外有一種輻射狀的地震雲，則有數條的帶狀雲同時相交在一點，猶如一把沒有扇面的扇骨鋪在空中，雲的交點垂直于地面就是震中所在地。
此外還有一種條紋狀地震雲，形似人的兩排肋骨，根據此雲判斷震中較爲複雜。
地震雲出現的時間以早上和傍晚居多，地震雲持續的時間越長，則對應的震中就越近，地震雲的長度越長，則距離發生地震的時間就越近，地震雲的顔色看上去越令人KB，則所對應的地震强度就越强。
目前，對于地震雲的形成原因衆說紛談，雖然各有道理，但是都不能完整的解釋地震前出現的這種現象，所以至今還是個謎，而且地震本身是個非常複雜的過程，所以預報地震，最好采用綜合法。
http://www.takungpao.com/news/08/05/13/ZM-904496.htm
早在17世紀中國古籍中就有“晝中或日落之後，天際晴朗，而有細雲如一綫，甚長，震兆也”的記載，1935年我國寧夏的隆德縣《重修隆德縣志》中記載有“天晴日暖，碧空清淨，忽見黑雲如縷，婉如長蛇，橫臥天際，久而不散，勢必爲地震”
但是，世界各國對于地震雲的研究還是最近幾年的事，其中以我國和日本處于領先地位，我國對地震雲的研究始于1976年唐山大地震之後，目前成功的例證有十餘個，日本利用地震雲預報地震成功的例證有上百個，有趣的是，首先提出“地震雲”這個名字的不是地震學者，而是一政治家，他就是日本前福岡市市長鍵田忠三郎，他曾經親身經曆過日本福岡1956年的7級地震，幷且在地震時親眼看到天空中有一種非常奇特的雲，以後只要這種雲出現，總有地震相應發生，所以他就把這樣的雲稱爲“地震雲”。
那麽，什麽樣的雲才是地震雲呢？這種雲的最大特點在于“奇”，與一般的雲有著明顯的區別。
蔚藍的天空中有時會留下一條飛機的尾迹，常見的條帶狀地震雲很像飛機的尾迹，不過更加厚實和豐滿些，它一般預示震中處于雲向的垂直綫上。
另外有一種輻射狀的地震雲，則有數條的帶狀雲同時相交在一點，猶如一把沒有扇面的扇骨鋪在空中，雲的交點垂直于地面就是震中所在地。
此外還有一種條紋狀地震雲，形似人的兩排肋骨，根據此雲判斷震中較爲複雜。
地震雲出現的時間以早上和傍晚居多，地震雲持續的時間越長，則對應的震中就越近，地震雲的長度越長，則距離發生地震的時間就越近，地震雲的顔色看上去越令人KB，則所對應的地震强度就越强。
目前，對于地震雲的形成原因衆說紛談，雖然各有道理，但是都不能完整的解釋地震前出現的這種現象，所以至今還是個謎，而且地震本身是個非常複雜的過程，所以預報地震，最好采用綜合法。
http://www.takungpao.com/news/08/05/13/ZM-904496.htm
2008年5月20日星期二
Study Warned of China Quake Risk Nearly a Year Ago
I think it is more appropriate for me to talk about geopraphic rather than economics.
Kevin Holden Platt in Beijing for National Geographic News
May 16, 2008
Just ten months before a deadly earthquake struck Sichuan Province's Beichuan county on May 12, a scientific study warned that the Chinese region was ripe for a major quake.
After examining satellite images and conducting on-the-ground inspections of deep, active faults in Sichuan Province for more than a decade, scientists issued a warning.
"The faults are sufficiently long to sustain a strong ground-shaking earthquake, making them potentially serious sources of regional seismic hazard," the Chinese, European, and U.S. geoscientists wrote in the mid-July 2007 edition of the journal Tectonics.
They concluded that clashing tectonic forces were growing in Beichuan, ready to burst in an explosion of seismic energy.
With precision and what now seems like eerie foresight, the researchers charted the active faults on multicolored maps of Beichuan, which turned out to be the epicenter of the recent earthquake.
"As far as I know, this is the only investigation of these active faults," said study co-author Michael Ellis of the Center for Earthquake Research and Information at the University of Memphis in Tennessee.
(Related: "China Quake Delivered Seismic One-Two Punch" [May 15, 2008].)
The magnitude 7.9 quake that struck on May 12 almost entirely leveled parts of Sichuan Province. Chinese officials today estimated that the death toll would reach 50,000 and that nearly five million people are homeless.
(See photos of the earthquake's destruction.)
"Locked in a Journal"
There is little reason to believe Chinese officials were aware of the July 2007 report, or that it would have made much difference if they had been.
"We had certainly identified the potential of these active faults," Ellis said. "But that information was effectively locked in an academic journal."
Ellis hopes that replacing the collapsed buildings with earthquake-proof structures could prevent future tragedies.
"I've been to these little towns [before the quake]," Ellis said. "Most of the houses are built of unreinforced masonry, and you can see little brick factories all around this area.
"It is more expensive to build earthquake-proof structures," he added. And the vast majority of people in Sichuan Province are anything but rich.
The Science Behind the Quake
Earthquake activity is nothing new in Beichuan.
"We have shown evidence for surface-rupturing earthquakes along the Beichuan fault since 12,000-13,000 years ago," Ellis and colleagues reported last summer.
Speaking with National Geographic News, Ellis said, "Ultimately, the [2008] earthquake is related to the continuing and inexorable collision of India with Asia, which is occurring at a rate of about 20 to 22 milimeters [just under an inch] per year."
This collision started more than 50 million years ago, when the tectonic plate beneath India crashed into the Eurasian plate. (Watch how the plates slammed into each other.)
"The Himalayas and all of Tibet was created by this collision," Ellis added.
As the Indian plate continues its slow-motion crash into Asia—sometimes in jerks marked by earthquakes—it is pushing the entire Tibetan Plateau northward.
"This earthquake was the Tibetan mountains moving east over the plains of Chengdu [the capital of Sichuan Province]," said Roger Bilham, a geoscientist at the University of Colorado who was not involved in the July 2007 study.
Not Just Sichuan's Problem
Study co-author Ellis said that, as the Tibetan Plateau moves northward, "the interior parts of Tibet are collapsing, rather like a soufflé taken out of the oven into cold air."
Faults along the southern, Himalayan edge of Tibet present hazards as great as those underlying the Sichuan temblor, Ellis said.
"Risk associated with the loss of collateral and lives is very high along the Himalaya, because so many people live there or immediately downstream," Ellis added.
"The risk is similarly high in Sichuan [to the east], because of the population and, like India and Nepal, the relatively poor building standards," he said.
And as India continues to pound into Tibet, "it is still creating new fault lines"—and new dangers.
Kevin Holden Platt in Beijing for National Geographic News
May 16, 2008
Just ten months before a deadly earthquake struck Sichuan Province's Beichuan county on May 12, a scientific study warned that the Chinese region was ripe for a major quake.
After examining satellite images and conducting on-the-ground inspections of deep, active faults in Sichuan Province for more than a decade, scientists issued a warning.
"The faults are sufficiently long to sustain a strong ground-shaking earthquake, making them potentially serious sources of regional seismic hazard," the Chinese, European, and U.S. geoscientists wrote in the mid-July 2007 edition of the journal Tectonics.
They concluded that clashing tectonic forces were growing in Beichuan, ready to burst in an explosion of seismic energy.
With precision and what now seems like eerie foresight, the researchers charted the active faults on multicolored maps of Beichuan, which turned out to be the epicenter of the recent earthquake.
"As far as I know, this is the only investigation of these active faults," said study co-author Michael Ellis of the Center for Earthquake Research and Information at the University of Memphis in Tennessee.
(Related: "China Quake Delivered Seismic One-Two Punch" [May 15, 2008].)
The magnitude 7.9 quake that struck on May 12 almost entirely leveled parts of Sichuan Province. Chinese officials today estimated that the death toll would reach 50,000 and that nearly five million people are homeless.
(See photos of the earthquake's destruction.)
"Locked in a Journal"
There is little reason to believe Chinese officials were aware of the July 2007 report, or that it would have made much difference if they had been.
"We had certainly identified the potential of these active faults," Ellis said. "But that information was effectively locked in an academic journal."
Ellis hopes that replacing the collapsed buildings with earthquake-proof structures could prevent future tragedies.
"I've been to these little towns [before the quake]," Ellis said. "Most of the houses are built of unreinforced masonry, and you can see little brick factories all around this area.
"It is more expensive to build earthquake-proof structures," he added. And the vast majority of people in Sichuan Province are anything but rich.
The Science Behind the Quake
Earthquake activity is nothing new in Beichuan.
"We have shown evidence for surface-rupturing earthquakes along the Beichuan fault since 12,000-13,000 years ago," Ellis and colleagues reported last summer.
Speaking with National Geographic News, Ellis said, "Ultimately, the [2008] earthquake is related to the continuing and inexorable collision of India with Asia, which is occurring at a rate of about 20 to 22 milimeters [just under an inch] per year."
This collision started more than 50 million years ago, when the tectonic plate beneath India crashed into the Eurasian plate. (Watch how the plates slammed into each other.)
"The Himalayas and all of Tibet was created by this collision," Ellis added.
As the Indian plate continues its slow-motion crash into Asia—sometimes in jerks marked by earthquakes—it is pushing the entire Tibetan Plateau northward.
"This earthquake was the Tibetan mountains moving east over the plains of Chengdu [the capital of Sichuan Province]," said Roger Bilham, a geoscientist at the University of Colorado who was not involved in the July 2007 study.
Not Just Sichuan's Problem
Study co-author Ellis said that, as the Tibetan Plateau moves northward, "the interior parts of Tibet are collapsing, rather like a soufflé taken out of the oven into cold air."
Faults along the southern, Himalayan edge of Tibet present hazards as great as those underlying the Sichuan temblor, Ellis said.
"Risk associated with the loss of collateral and lives is very high along the Himalaya, because so many people live there or immediately downstream," Ellis added.
"The risk is similarly high in Sichuan [to the east], because of the population and, like India and Nepal, the relatively poor building standards," he said.
And as India continues to pound into Tibet, "it is still creating new fault lines"—and new dangers.
2008年5月7日星期三
Buffett advice: Buy smart...and low
Warren Buffett said investors should think independently when making buying choices. The Korean market trumps American banks.
Jason Zweig, Money Magazine senior writer/columnist
Last Updated: May 6, 2008: 1:15 PM EDT
OMAHA (Money Magazine) -- On Sunday, May 4, I attended the press conference where Berkshire Hathaway Chief Executive Warren Buffett and vice chairman Charlie Munger took questions from print reporters for two hours, then went off and did more interviews for TV.
Buffett, who composes his thoughts at blazing speed and speaks in long and complex paragraphs, spent the entire weekend talking. Munger, who is as laconic as Buffett is loquacious, saves his voice - speaking, as always, only a handful of words at a time.
Buffett and Munger, aged 77 and 84 respectively, have the mental energy and sharpness of someone half their age.
Here are some highlights.
Building a philosophy
In response to a question from Barbara Kiviat of Time on how he and Munger control their emotions, Buffett replied: "[It] comes about from having an investment philosophy grounded in the idea that a stock is a piece of a business. If you look at it that way, there's no reason to get excited whether some analyst is recommending it or the company is splitting the shares two-for-one, or whatever. The only way to drive the extraneous thoughts out of your mind is to have a philosophy. And for us that philosophy comes from Benjamin Graham and The Intelligent Investor, especially chapters 8 and 20. It's not very complicated stuff."
"You have to have the right temperament. I tell the students who come visit me that if you have more than 120 or 130 I.Q. points, you can afford to give the rest away. You don't need extraordinary intelligence to succeed as an investor. You need a philosophy and the ability to think independently...It doesn't make any difference what other people think of a stock. What matters is whether you know enough to evaluate the business," he opined.
"You should be able to write down on a yellow sheet of paper, 'I'm buying General Motors at $22, and GM has [566] million shares for a total market value of $13 billion, and GM is worth a lot more than $13 billion because _______________." And if you can't finish that sentence, then you don't buy the stock. [Note: Buffett mentioned GM for illustrative purposes only.] All this requires some temperamental detachment from other people's behavior. Both Charlie and I have a natural instinct in that direction. We value our opinions more than others' -- perhaps to an extreme!"
Kiviat followed up by asking whether they mind being regarded as "a bastion of calm" by others. Buffett simply stated, "I think they're probably right," while Munger was more loquacious: "Not only are they right, but it's a huge advantage to us to get the reputation of being wiser and stronger than other places. Would any of you object to being considered wiser and stronger when you're trying to get anything in life? The key is not to be seduced by crazy ideas, but instead just stick to the fundamentals year after year. Academia doesn't get too interested in us -- we're too simple. What would the professors do? A great many of the formulas [they use to analyze securities and markets] are dead wrong. They exist purely to give the intellectual class something to do. We don't do anything just exercise our intellectual proclivity for mathematical formulas."
Then Buffet said one of the most remarkable things I've ever heard him say: "There's no reason we should become fearful if a stock goes down. If a stock goes down 50%, I'd look forward to it. In fact, I would offer you a significant sum of money if you could give me the opportunity for all of my stocks to go down 50% over the next month."
Look at that sentence again. What Buffett is actually saying is that most people's emotions work backwards: They get greedy when stock prices go up and fearful when they go down. Instead, if you are a true investor, you should shop for stocks the same way you shop for anything else: Look for sale prices, and never regard falling prices as inherently bad news. Instead, falling prices create the opportunity to buy even more of something that was already worth owning.
In that single sentence Buffett captured the difference between investing and speculating: An investor, like Buffett, wants the price of a stock to fall below the value of its underlying business so he can buy even more and hold for as long as possible. A speculator (like Jim Cramer) only wants the price of a stock to go up, with no regard for the value of the underlying business at all, so he can sell as fast as possible. To the investor, the market's opinions do not matter. To the speculator, they are the only thing that matters.
Bond insurers beware
In what may spell trouble for bond insurers MBIA and AMBAC, Buffett said, "We see every day that people are coming to us and paying more than they paid the original bond insurer to see that they have an insurer." Berkshire wrote $400 million in municipal-bond insurance in the first quarter of 2008 and is already licensed to operate in 49 states. "This is entirely a secondary-market business," said Buffett, "where people are telling us, 'We'll pay you just to back them up.' "
Note carefully what is going on here: People who already have insurance on a very low-risk investment (municipal bonds) are coming to Buffett and asking him to ensure that their existing insurance will be adequate. It is like a man who is already wearing a belt paying you to put a pair of suspenders on him. This is the kind of business that Buffett loves. Without naming names, he criticized MBIA and AMBAC for ravaging their own capital by insuring too much dicey mortgage debt: "If they keep writing the business at any price, eventually the secondary market is likely to reflect that in the price [of bonds that carry their insurance]. And if you're writing business to pay for yesterday's losses, you'll be sorry."
Then Buffett marveled at the fact that "You have one bond insurer whose stock went from $96 to $4 [AMBAC (ABK)] and they're still rated AAA. The other one issued 14% paper with Treasuries at 4% [MBIA (MBI)] and they're still rated AAA." At that point, Munger elicited laughter from the room by intoning, "The rating agencies, with 20-20 hindsight, could have done better."
Korea and China vs. U.S. regional banks
When a Korean journalist asked whether Berkshire would buy any other Korean companies in addition to its existing holding in steelmaker Posco, Buffett revealed that he had bought "a number of" Korean stocks for his personal portfolio "a few years ago," when "that stock market got about as cheap as any market I've seen in my lifetime."
But most Korean stocks are too small to have a significant impact on Berkshire's portfolio, so Buffett and Munger don't expect to put much money there. Nevertheless, "Korea represents sound value," said Munger, and Buffett added: "It's one of the better stock markets in the world."
Later, in answering a question about whether the credit crisis has turned regional bank stocks into good values, Buffett said: "It's hard to get much conviction on how [the management] will behave and whether they tell the truth. There's a lot of leeway [in the accounting procedures and the reported financial statements]. Talking to the CEOs isn't very useful. When they're lying, they believe it themselves a lot of the time. I want to see how people behave in different situations."
In short, Buffett is not bullish on regional banks. Munger, however, was more upbeat: "For somebody who's very diligent, you've identified a prospecting territory that has some promise. It wouldn't necessarily work for us [because BRK needs to buy very large blocks of stock], but it might work for others."
Buffett wasn't done criticizing the impervious financial statements of US banks: "If you had $1 million," he retorted to Munger, "it would be easier to go through a manual of Korean stocks than to select a few good American banks." This time Munger agreed: "I'd take the Korean stock market so much faster than the American banks that it'd make your head spin."
I don't think, by the way, that Buffett and Munger were trying to say that the Korean stock market is a steal. They were, instead, merely pointing out that investors need to think for themselves and to cast a wide net. If you run out today and buy a bunch of Korean stocks without researching them first, you're not following Buffett and Munger's advice, you're violating it.
A Chinese reporter asked whether Berkshire will be buying more stocks in China now that its market has fallen by almost half, and what the next year will hold for Chinese investors. Buffett's answer held a lesson for investors based anywhere. "We're not in the business of forecasting what the market will do in the next year," said Buffett. "But if a market goes down, we like that. There's no way Charlie and I get upset when stocks go down. We like it, because falling prices give us the opportunity to buy more good businesses at better prices."
"We don't predict stock prices," he went on to day. "All we know is, the lower they go, the more interesting they get. I think it was Agatha Christie, who was married to an archeologist, who said: 'I don't mind getting older, because the older I get, the more interested my husband becomes in me.' Well, the lower stock prices go, the more interested we get in them...We are not looking at any stocks in China now, but China will always be on our radar screen."
Valuing stocks
Asked how he evaluates financial stocks when so many have balance sheets complicated by derivatives, Buffett said: "There are some that I can't value. I probably couldn't value them even if I worked there, even if I were in charge, and even if I had a year to do it. It's just too complicated [with such large positions in complex derivatives]....Most of them, I'm agnostic. I guess that means I don't trust them. When you're buying stock in a financial institution, you should have a reason to be quite comfortable with the risk-assessment capabilities of the people in charge...to have a real fix on the people running the institution. We can't do that with a lot of [banks]. We just can't figure out what they're doing most of the time.... [the accounting doesn't] really spell out where the institution stands. So you'd better know more about the people running it than any set of figures can give you."
Buffett added that not long ago, he read the 270-page 10-K annual report of a bank he was curious about. "After a couple of hours," he said, "I had about 25 pages marked with big question marks that I couldn't answer." (This raises the obvious question: If Warren Buffett can't understand the financial statements of big banks with derivatives, who can?)
Munger summed up the complexity of derivatives this way: "Wall Street is always going to go where the money is and not worry about the consequences. First they invent things they shouldn't sell to anybody, then they end up selling them to their grandmothers."
Munger commented later, "Many of the present troubles were richly deserved. A lot of financial institutions behaved with a combination of stupidity and over-reaching, and that's not a good combination. I think the world is right to exact a large penalty. Capitalism wouldn't exist without failure."
Added Buffett: "Capitalism without failure is like Christianity without hell. These institutions not only brewed the Kool-Aid but drank it. [Some of the banks and mortgage companies] were like an arsonist who got caught in the house after he set it on fire."
Munger's final word on the subject: "In some of these institutions, the main product is not banking, it's testosterone."
http://money.cnn.com/2008/05/05/news/companies/buffet.pm.wrap/
Jason Zweig, Money Magazine senior writer/columnist
Last Updated: May 6, 2008: 1:15 PM EDT
OMAHA (Money Magazine) -- On Sunday, May 4, I attended the press conference where Berkshire Hathaway Chief Executive Warren Buffett and vice chairman Charlie Munger took questions from print reporters for two hours, then went off and did more interviews for TV.
Buffett, who composes his thoughts at blazing speed and speaks in long and complex paragraphs, spent the entire weekend talking. Munger, who is as laconic as Buffett is loquacious, saves his voice - speaking, as always, only a handful of words at a time.
Buffett and Munger, aged 77 and 84 respectively, have the mental energy and sharpness of someone half their age.
Here are some highlights.
Building a philosophy
In response to a question from Barbara Kiviat of Time on how he and Munger control their emotions, Buffett replied: "[It] comes about from having an investment philosophy grounded in the idea that a stock is a piece of a business. If you look at it that way, there's no reason to get excited whether some analyst is recommending it or the company is splitting the shares two-for-one, or whatever. The only way to drive the extraneous thoughts out of your mind is to have a philosophy. And for us that philosophy comes from Benjamin Graham and The Intelligent Investor, especially chapters 8 and 20. It's not very complicated stuff."
"You have to have the right temperament. I tell the students who come visit me that if you have more than 120 or 130 I.Q. points, you can afford to give the rest away. You don't need extraordinary intelligence to succeed as an investor. You need a philosophy and the ability to think independently...It doesn't make any difference what other people think of a stock. What matters is whether you know enough to evaluate the business," he opined.
"You should be able to write down on a yellow sheet of paper, 'I'm buying General Motors at $22, and GM has [566] million shares for a total market value of $13 billion, and GM is worth a lot more than $13 billion because _______________." And if you can't finish that sentence, then you don't buy the stock. [Note: Buffett mentioned GM for illustrative purposes only.] All this requires some temperamental detachment from other people's behavior. Both Charlie and I have a natural instinct in that direction. We value our opinions more than others' -- perhaps to an extreme!"
Kiviat followed up by asking whether they mind being regarded as "a bastion of calm" by others. Buffett simply stated, "I think they're probably right," while Munger was more loquacious: "Not only are they right, but it's a huge advantage to us to get the reputation of being wiser and stronger than other places. Would any of you object to being considered wiser and stronger when you're trying to get anything in life? The key is not to be seduced by crazy ideas, but instead just stick to the fundamentals year after year. Academia doesn't get too interested in us -- we're too simple. What would the professors do? A great many of the formulas [they use to analyze securities and markets] are dead wrong. They exist purely to give the intellectual class something to do. We don't do anything just exercise our intellectual proclivity for mathematical formulas."
Then Buffet said one of the most remarkable things I've ever heard him say: "There's no reason we should become fearful if a stock goes down. If a stock goes down 50%, I'd look forward to it. In fact, I would offer you a significant sum of money if you could give me the opportunity for all of my stocks to go down 50% over the next month."
Look at that sentence again. What Buffett is actually saying is that most people's emotions work backwards: They get greedy when stock prices go up and fearful when they go down. Instead, if you are a true investor, you should shop for stocks the same way you shop for anything else: Look for sale prices, and never regard falling prices as inherently bad news. Instead, falling prices create the opportunity to buy even more of something that was already worth owning.
In that single sentence Buffett captured the difference between investing and speculating: An investor, like Buffett, wants the price of a stock to fall below the value of its underlying business so he can buy even more and hold for as long as possible. A speculator (like Jim Cramer) only wants the price of a stock to go up, with no regard for the value of the underlying business at all, so he can sell as fast as possible. To the investor, the market's opinions do not matter. To the speculator, they are the only thing that matters.
Bond insurers beware
In what may spell trouble for bond insurers MBIA and AMBAC, Buffett said, "We see every day that people are coming to us and paying more than they paid the original bond insurer to see that they have an insurer." Berkshire wrote $400 million in municipal-bond insurance in the first quarter of 2008 and is already licensed to operate in 49 states. "This is entirely a secondary-market business," said Buffett, "where people are telling us, 'We'll pay you just to back them up.' "
Note carefully what is going on here: People who already have insurance on a very low-risk investment (municipal bonds) are coming to Buffett and asking him to ensure that their existing insurance will be adequate. It is like a man who is already wearing a belt paying you to put a pair of suspenders on him. This is the kind of business that Buffett loves. Without naming names, he criticized MBIA and AMBAC for ravaging their own capital by insuring too much dicey mortgage debt: "If they keep writing the business at any price, eventually the secondary market is likely to reflect that in the price [of bonds that carry their insurance]. And if you're writing business to pay for yesterday's losses, you'll be sorry."
Then Buffett marveled at the fact that "You have one bond insurer whose stock went from $96 to $4 [AMBAC (ABK)] and they're still rated AAA. The other one issued 14% paper with Treasuries at 4% [MBIA (MBI)] and they're still rated AAA." At that point, Munger elicited laughter from the room by intoning, "The rating agencies, with 20-20 hindsight, could have done better."
Korea and China vs. U.S. regional banks
When a Korean journalist asked whether Berkshire would buy any other Korean companies in addition to its existing holding in steelmaker Posco, Buffett revealed that he had bought "a number of" Korean stocks for his personal portfolio "a few years ago," when "that stock market got about as cheap as any market I've seen in my lifetime."
But most Korean stocks are too small to have a significant impact on Berkshire's portfolio, so Buffett and Munger don't expect to put much money there. Nevertheless, "Korea represents sound value," said Munger, and Buffett added: "It's one of the better stock markets in the world."
Later, in answering a question about whether the credit crisis has turned regional bank stocks into good values, Buffett said: "It's hard to get much conviction on how [the management] will behave and whether they tell the truth. There's a lot of leeway [in the accounting procedures and the reported financial statements]. Talking to the CEOs isn't very useful. When they're lying, they believe it themselves a lot of the time. I want to see how people behave in different situations."
In short, Buffett is not bullish on regional banks. Munger, however, was more upbeat: "For somebody who's very diligent, you've identified a prospecting territory that has some promise. It wouldn't necessarily work for us [because BRK needs to buy very large blocks of stock], but it might work for others."
Buffett wasn't done criticizing the impervious financial statements of US banks: "If you had $1 million," he retorted to Munger, "it would be easier to go through a manual of Korean stocks than to select a few good American banks." This time Munger agreed: "I'd take the Korean stock market so much faster than the American banks that it'd make your head spin."
I don't think, by the way, that Buffett and Munger were trying to say that the Korean stock market is a steal. They were, instead, merely pointing out that investors need to think for themselves and to cast a wide net. If you run out today and buy a bunch of Korean stocks without researching them first, you're not following Buffett and Munger's advice, you're violating it.
A Chinese reporter asked whether Berkshire will be buying more stocks in China now that its market has fallen by almost half, and what the next year will hold for Chinese investors. Buffett's answer held a lesson for investors based anywhere. "We're not in the business of forecasting what the market will do in the next year," said Buffett. "But if a market goes down, we like that. There's no way Charlie and I get upset when stocks go down. We like it, because falling prices give us the opportunity to buy more good businesses at better prices."
"We don't predict stock prices," he went on to day. "All we know is, the lower they go, the more interesting they get. I think it was Agatha Christie, who was married to an archeologist, who said: 'I don't mind getting older, because the older I get, the more interested my husband becomes in me.' Well, the lower stock prices go, the more interested we get in them...We are not looking at any stocks in China now, but China will always be on our radar screen."
Valuing stocks
Asked how he evaluates financial stocks when so many have balance sheets complicated by derivatives, Buffett said: "There are some that I can't value. I probably couldn't value them even if I worked there, even if I were in charge, and even if I had a year to do it. It's just too complicated [with such large positions in complex derivatives]....Most of them, I'm agnostic. I guess that means I don't trust them. When you're buying stock in a financial institution, you should have a reason to be quite comfortable with the risk-assessment capabilities of the people in charge...to have a real fix on the people running the institution. We can't do that with a lot of [banks]. We just can't figure out what they're doing most of the time.... [the accounting doesn't] really spell out where the institution stands. So you'd better know more about the people running it than any set of figures can give you."
Buffett added that not long ago, he read the 270-page 10-K annual report of a bank he was curious about. "After a couple of hours," he said, "I had about 25 pages marked with big question marks that I couldn't answer." (This raises the obvious question: If Warren Buffett can't understand the financial statements of big banks with derivatives, who can?)
Munger summed up the complexity of derivatives this way: "Wall Street is always going to go where the money is and not worry about the consequences. First they invent things they shouldn't sell to anybody, then they end up selling them to their grandmothers."
Munger commented later, "Many of the present troubles were richly deserved. A lot of financial institutions behaved with a combination of stupidity and over-reaching, and that's not a good combination. I think the world is right to exact a large penalty. Capitalism wouldn't exist without failure."
Added Buffett: "Capitalism without failure is like Christianity without hell. These institutions not only brewed the Kool-Aid but drank it. [Some of the banks and mortgage companies] were like an arsonist who got caught in the house after he set it on fire."
Munger's final word on the subject: "In some of these institutions, the main product is not banking, it's testosterone."
http://money.cnn.com/2008/05/05/news/companies/buffet.pm.wrap/
2008年4月18日星期五
Buffett's on "Mr. Market"
Whenever Charlie and I buy common stocks for Berkshire's insurance companies (leaving aside arbitrage purchases, discussed later) we approach the transaction as if we were buying into a private business. We look at the economic prospects of the business, the people in charge of running it, and the price we must pay. We do not have in mind any time or price for sale. Indeed, we are willing to hold a stock indefinitely so long as we expect the business to increase in intrinsic value at a satisfactory rate. When investing, we view ourselves as business analysts - not as market analysts, not as macroeconomic analysts, and not even as security analysts.
Our approach makes an active trading market useful, since it periodically presents us with mouth-watering opportunities. But by no means is it essential: a prolonged suspension of trading in the securities we hold would not bother us any more than does the lack of daily quotations on World Book or Fechheimer. Eventually, our economic fate will be determined by the economic fate of the business we own, whether our ownership is partial or total.
Ben Graham, my friend and teacher, long ago described the mental attitude toward market fluctuations that I believe to be most conducive to investment success. He said that you should imagine market quotations as coming from a remarkably accommodating fellow named Mr. Market who is your partner in a private business. Without fail, Mr. Market appears daily and names a price at which he will either buy your interest or sell you his.
Even though the business that the two of you own may have economic characteristics that are stable, Mr. Market's quotations will be anything but. For, sad to say, the poor fellow has incurable emotional problems. At times he feels euphoric and can see only the favorable factors affecting the business. When in that mood, he names a very high buy-sell price because he fears that you will snap up his interest and rob him of imminent gains. At other times he is depressed and can see nothing but trouble ahead for both the business and the world. On these occasions he will name a very low price, since he is terrified that you will unload your interest on him.
Mr. Market has another endearing characteristic: He doesn't mind being ignored. If his quotation is uninteresting to you today, he will be back with a new one tomorrow. Transactions are strictly at your option. Under these conditions, the more manic-depressive his behavior, the better for you.But, like Cinderella at the ball, you must heed one warning or everything will turn into pumpkins and mice: Mr. Market is there to serve you, not to guide you. It is his pocketbook, not his wisdom, that you will find useful. If he shows up some day in a particularly foolish mood, you are free to either ignore him or to take advantage of him, but it will be disastrous if you fall under his influence. Indeed, if you aren't certain that you understand and can value your business far better than Mr. Market, you don't belong in the game. As they say in poker, "If you've been in the game 30 minutes and you don't know who the patsy is, you're the patsy."
Ben's Mr. Market allegory may seem out-of-date in today's investment world, in which most professionals and academicians talk of efficient markets, dynamic hedging and betas. Their interest in such matters is understandable, since techniques shrouded in mystery clearly have value to the purveyor of investment advice. After all, what witch doctor has ever achieved fame and fortune by simply advising "Take two aspirins"?
The value of market esoterica to the consumer of investment advice is a different story. In my opinion, investment success will not be produced by arcane formulae, computer programs or signals flashed by the price behavior of stocks and markets. Rather an investor will succeed by coupling good business judgment with an ability to insulate his thoughts and behavior from the super-contagious emotions that swirl about the marketplace. In my own efforts to stay insulated, I have found it highly useful to keep Ben's Mr. Market concept firmly in mind.
Following Ben's teachings, Charlie and I let our marketable equities tell us by their operating results - not by their daily, or even yearly, price quotations - whether our investments are successful. The market may ignore business success for a while, but eventually will confirm it. As Ben said: "In the short run, the market is a voting machine but in the long run it is a weighing machine." The speed at which a business's success is recognized, furthermore, is not that important as long as the company's intrinsic value is increasing at a satisfactory rate. In fact, delayed recognition can be an advantage: It may give us the chance to buy more of a good thing at a bargain price.
Our approach makes an active trading market useful, since it periodically presents us with mouth-watering opportunities. But by no means is it essential: a prolonged suspension of trading in the securities we hold would not bother us any more than does the lack of daily quotations on World Book or Fechheimer. Eventually, our economic fate will be determined by the economic fate of the business we own, whether our ownership is partial or total.
Ben Graham, my friend and teacher, long ago described the mental attitude toward market fluctuations that I believe to be most conducive to investment success. He said that you should imagine market quotations as coming from a remarkably accommodating fellow named Mr. Market who is your partner in a private business. Without fail, Mr. Market appears daily and names a price at which he will either buy your interest or sell you his.
Even though the business that the two of you own may have economic characteristics that are stable, Mr. Market's quotations will be anything but. For, sad to say, the poor fellow has incurable emotional problems. At times he feels euphoric and can see only the favorable factors affecting the business. When in that mood, he names a very high buy-sell price because he fears that you will snap up his interest and rob him of imminent gains. At other times he is depressed and can see nothing but trouble ahead for both the business and the world. On these occasions he will name a very low price, since he is terrified that you will unload your interest on him.
Mr. Market has another endearing characteristic: He doesn't mind being ignored. If his quotation is uninteresting to you today, he will be back with a new one tomorrow. Transactions are strictly at your option. Under these conditions, the more manic-depressive his behavior, the better for you.But, like Cinderella at the ball, you must heed one warning or everything will turn into pumpkins and mice: Mr. Market is there to serve you, not to guide you. It is his pocketbook, not his wisdom, that you will find useful. If he shows up some day in a particularly foolish mood, you are free to either ignore him or to take advantage of him, but it will be disastrous if you fall under his influence. Indeed, if you aren't certain that you understand and can value your business far better than Mr. Market, you don't belong in the game. As they say in poker, "If you've been in the game 30 minutes and you don't know who the patsy is, you're the patsy."
Ben's Mr. Market allegory may seem out-of-date in today's investment world, in which most professionals and academicians talk of efficient markets, dynamic hedging and betas. Their interest in such matters is understandable, since techniques shrouded in mystery clearly have value to the purveyor of investment advice. After all, what witch doctor has ever achieved fame and fortune by simply advising "Take two aspirins"?
The value of market esoterica to the consumer of investment advice is a different story. In my opinion, investment success will not be produced by arcane formulae, computer programs or signals flashed by the price behavior of stocks and markets. Rather an investor will succeed by coupling good business judgment with an ability to insulate his thoughts and behavior from the super-contagious emotions that swirl about the marketplace. In my own efforts to stay insulated, I have found it highly useful to keep Ben's Mr. Market concept firmly in mind.
Following Ben's teachings, Charlie and I let our marketable equities tell us by their operating results - not by their daily, or even yearly, price quotations - whether our investments are successful. The market may ignore business success for a while, but eventually will confirm it. As Ben said: "In the short run, the market is a voting machine but in the long run it is a weighing machine." The speed at which a business's success is recognized, furthermore, is not that important as long as the company's intrinsic value is increasing at a satisfactory rate. In fact, delayed recognition can be an advantage: It may give us the chance to buy more of a good thing at a bargain price.
2008年4月4日星期五
Warren Buffett MBA Talk
This is essentially similar to Warren Buffett's philosophy from the books on my recommended book list.
http://youtube.com/watch?v=DfuXKpMFUjc
Enjoy it!
http://youtube.com/watch?v=DfuXKpMFUjc
Enjoy it!
2008年2月24日星期日
Notes From Buffett Meeting 2/15/2008
Note: Students from Emory's Goizueta Business School and McCombs School of Business at UT Austin were invited to come visit Mr. Buffett for a Q&A session. These notes were reproduced to the best of my ability as I heard and as I could recall them from a collection of mine and other students' notes. There is no guarantee that this was exactly what was said, but the intent was to preserve the spirit of the message. Enjoy.
Emory:
With the popularity of "Fortune's Formula" and the Kelly Criterion, there seems to be a lot of debate in the value community regarding diversification vs. concentration. I know where you side in that discussion, but was curious if you could tell us more about your process for position sizing or averaging down.
With the popularity of "Fortune's Formula" and the Kelly Criterion, there seems to be a lot of debate in the value community regarding diversification vs. concentration. I know where you side in that discussion, but was curious if you could tell us more about your process for position sizing or averaging down.
Buffett:
I have 2 views on diversification. If you are a professional and have confidence, then I would advocate lots of concentration. For everyone else, if it's not your game, participate in total diversification. The economy will do fine over time. Make sure you don't buy at the wrong price or the wrong time. That's what most people should do, buy a cheap index fund and slowly dollar cost average into it. If you try to be just a little bit smart, spending an hour a week investing, you're liable to be really dumb.
I have 2 views on diversification. If you are a professional and have confidence, then I would advocate lots of concentration. For everyone else, if it's not your game, participate in total diversification. The economy will do fine over time. Make sure you don't buy at the wrong price or the wrong time. That's what most people should do, buy a cheap index fund and slowly dollar cost average into it. If you try to be just a little bit smart, spending an hour a week investing, you're liable to be really dumb.
If it's your game, diversification doesn't make sense. It's crazy to put money into your 20th choice rather than your 1st choice. "Lebron James" analogy. If you have Lebron James on your team, don't take him out of the game just to make room for someone else. If you have a harem of 40 women, you never really get to know any of them well.
Charlie and I operated mostly with 5 positions. If I were running 50, 100, 200 million, I would have 80% in 5 positions, with 25% for the largest. In 1964 I found a position I was willing to go heavier into, up to 40%. I told investors they could pull their money out. None did. The position was American Express after the Salad Oil Scandal. In 1951 I put the bulk of my net worth into GEICO. Later in 1998, LTCM was in trouble. With the spread between the on-the-run versus off-the-run 30 year Treasury bonds, I would have been willing to put 75% of my portfolio into it. There were various times I would have gone up to 75%, even in the past few years. If it's your game and you really know your business, you can load up.
Over the past 50-60 years, Charlie and I have never permanently lost more than 2% of our personal worth on a position. We've suffered quotational loss, 50% movements. That's why you should never borrow money. We don't want to get into situations where anyone can pull the rug out from under our feet.
In stocks, it's the only place where when things go on sale, people get unhappy. If I like a business, then it makes sense to buy more at 20 than at 30. If McDonalds reduces the price of hamburgers, I think it's great.
Austin:
What industry will be the next growth driver in the 21st century and what do you see that supports that?
Buffett:
We don't worry too much about that. If you'd look at the 1930s, nobody could have predicted how much the automobile and airplane would transform the world. There were 2000 car companies, but now only 3 left in the US and they are hanging on barely. It was tremendous for society, but horrible for investors. Investors would have had to not only identify the right companies, but also identify the right time. The net wealth creation in airlines since Orville Wright has been next to zero. If a capitalist had been at Kitty Hawk and shot him down, would have done us a huge favor. Or look at TV manufacturers. There are hundreds of millions of TV's, RCA & GE used to produce them, but now there are no American manufacturers left.
We don't worry too much about that. If you'd look at the 1930s, nobody could have predicted how much the automobile and airplane would transform the world. There were 2000 car companies, but now only 3 left in the US and they are hanging on barely. It was tremendous for society, but horrible for investors. Investors would have had to not only identify the right companies, but also identify the right time. The net wealth creation in airlines since Orville Wright has been next to zero. If a capitalist had been at Kitty Hawk and shot him down, would have done us a huge favor. Or look at TV manufacturers. There are hundreds of millions of TV's, RCA & GE used to produce them, but now there are no American manufacturers left.
If you want a great business, take Coca-Cola. The product is unchanged, they sell 1.5 billion 8 ounce servings per day 122 years later. They have a moat; if you have a castle, someone's going to come after you.
Gillette accounts for 70% of razor sales at 80% gross margins and it is the same over time. Men don't change much. Shaving might be the only creative thing they do, like painting the Sistine Chapel.
Snickers has been the #1 candy bar for the past 40 years. If you gave me $1 billion to knock off Snickers, I can't do it. That's the test of a good business. You don't knock off Coke or Gilette. Richard Branson is a marketing genius. He came in with Virgin Cola, we're not sure what the name means, perhaps it turns you back into one, but he couldn't knock off Coke. We look for wide moats around great economic castles. Growth is good too, but we prefer strong economics. In the upcoming annual report I have a section titled "The Great, the Good, and the Gruesome" where I talk about these.
Emory:
How do you define happiness and what about your life makes you most happy? When you make good on an investment, do you allow yourself to enjoy that success by getting excited - and on the flip-side, when an investment turns down, do you find yourself equally disappointed - or do you try to remove emotion from your work, as much as possible?
Buffett:
I enjoy what I do, I tap dance to work every day. I work with people I love, doing what I love. The only thing I would pay to get rid of is firing people. I spend my time thinking about the future, not the past. The future is exciting. As Bertrand Russell says, "Success is getting what you want, happiness is wanting what you get." I won the ovarian lottery the day I was born and so did all of you. We're all successful, intelligent, educated. To focus on what you don't have is a terrible mistake. With the gifts all of us have, if you are unhappy, it's your own fault.
I enjoy what I do, I tap dance to work every day. I work with people I love, doing what I love. The only thing I would pay to get rid of is firing people. I spend my time thinking about the future, not the past. The future is exciting. As Bertrand Russell says, "Success is getting what you want, happiness is wanting what you get." I won the ovarian lottery the day I was born and so did all of you. We're all successful, intelligent, educated. To focus on what you don't have is a terrible mistake. With the gifts all of us have, if you are unhappy, it's your own fault.
I know a woman in her 80's, a Polish Jew woman forced into a concentration camp with her family but not all of them came out. She says, "I am slow to make friends because when I look at people, I have one question in mind; would they hide me?" If you get to be my age, or younger for that matter, and have a lot of people that would hide you, then you can feel pretty good about how you've lived your life. I know people on the Forbes 400 list whose children would not hide them. "He's in the attic, he's in the attic." Some of them keep compensating by joining board seats or getting honorary degrees, but it doesn't change the fact that no one will give a damn when they are gone. The most powerful force in the world is unconditional love. To horde it is a terrible mistake in life. The more you try to give it away, the more you get it back. At an individual level, it's important to make sure that for the people that count to you, you count to them.
What if you could buy 10% of one of your classmates and their future earnings? You wouldn't buy the ones with the highest IQ, the best grades, etc, but the most effective. You like people who are generous, go out of their way, straight shooters. Now imagine that you could short 10% of one of your classmates. This part is usually more fun as you start looking around the room. You wouldn't choose the ones with the poorest grades. Look for people nobody wants to be around, that are obnoxious or like to take all the credit. If you have a 500 HP engine and only get 50 HP out of it, you'll be beat by someone else that has a 300 HP engine but gets 250 HP output. The difference between potential and output comes from human qualities. You can make a list of the qualities you admire and those you despise. To turn the tables, think if this is the way I react to the qualities on the list, which is the way the world will react to me. You can learn to turn on those qualities you want and turn off those qualities you wish to avoid. The chains of habit are too light to be felt until they are too heavy to be broken. You can't change at 60; the time to look at that list is now.
Austin:
Why do you think that despite making your methods publicly available, that relatively few people have been able to emulate your success?
Buffett:
I asked Graham the same question. Everyone took his class at Columbia Business School. He used current examples, and by the end of the semester you would have a portfolio that would've made you money. Graham lived a life of sharing. He may have had more money hoarding, but lived happier because of it. The money's just a figure in the paper, perhaps he would've died with 86 million instead of 42 million, but it doesn't really matter. 90% of the people that took his class ended up doing something else.
I asked Graham the same question. Everyone took his class at Columbia Business School. He used current examples, and by the end of the semester you would have a portfolio that would've made you money. Graham lived a life of sharing. He may have had more money hoarding, but lived happier because of it. The money's just a figure in the paper, perhaps he would've died with 86 million instead of 42 million, but it doesn't really matter. 90% of the people that took his class ended up doing something else.
At age 11 I started investing, purchasing three shares of Cities Service Preferred. I had read every book on investing in the Omaha library. I was really into charting and technical analysis. I loved it, but didn't make any money from it. At 19 I read Graham's "The Intelligent Investor" and it changed my world. Did Ben lose because I read his book? Maybe we competed and he made less money, but it didn't matter to Graham.
The philosophy either takes immediately or it doesn't at all. The reason gets down to temperament. People want to make money fast, but it doesn't happen that way. Graham's philosophy doesn't promise enough for many people. You don't know when it will happen, but you just wait for the fat pitches within your circle of competence. It's not as exciting as guessing whether the stock price will go up the next day. Most investors in internet companies didn't know the market cap. They were buying because they thought the stock would move, but if you asked them to write "I would buy XYZ company for $6 billion because", they wouldn't get halfway through the sentence. It's the classic tortoise versus hare, bound to work over time. Charlie and I have educated competitors. Most don't compete with us, though. It's fine, we have more than enough money.
Emory:
What qualities in managers set them apart as great leaders, in essence, where do you find the right balance between "hard" and "soft" skills?
Buffett:
We have 45 managers. Some of them we communicate with once a year, some once a month, some everyday. I usually have dinner with the Blumkins every month, and we go on vacation, because we're friends. What we look for in managers is a passion for the business. They usually come to us. I've never bought from a financial seller. We can't run the business so I am counting on them to behave well; we have very little in the form of contracts. The business needs to continue just the same after I hand them the check as before. My big question is whether he will still get up at 6 AM just the same with $500 million, and continue to send money to Omaha. I have to look them in the eye and decide whether they love the business or they love the money. It's fine if they love the money, but they have to love the business more. Why do I come in at 7 every morning, can't wait to get to work. It's because I get to paint my own painting and I like applause.
We have 45 managers. Some of them we communicate with once a year, some once a month, some everyday. I usually have dinner with the Blumkins every month, and we go on vacation, because we're friends. What we look for in managers is a passion for the business. They usually come to us. I've never bought from a financial seller. We can't run the business so I am counting on them to behave well; we have very little in the form of contracts. The business needs to continue just the same after I hand them the check as before. My big question is whether he will still get up at 6 AM just the same with $500 million, and continue to send money to Omaha. I have to look them in the eye and decide whether they love the business or they love the money. It's fine if they love the money, but they have to love the business more. Why do I come in at 7 every morning, can't wait to get to work. It's because I get to paint my own painting and I like applause.
We bought a jeweler, Ben Bridge. It was a 4th generation company, with over 100 stores. They were only interested in selling to us. The family didn't want to sell to others, the employees didn't want it. I never met him. He didn't want to sell either, but the family needed it.
At Borsheims we have a woman from Zimbabwe. She didn't even have the benefit of an MBA. We didn't look at a resume, or grades, or HR recommendations, but were looking for passion and we'll pay fairly because we don't want the resent that comes with unfairness. We want people that will work regardless.
I got a fax from Pete at Forest River saying this is the type of business you would like to own. He didn't want to worry about if he died tomorrow, and left his wife and daughter behind. After we made the deal, we had dinner and I brought up the topic of salary. I told him to name whatever number he wanted and I would sign the check. He asked me what I made. I told him $100,000 and he said he didn't want to make more than me, so we settled on $100,000. Pete called yesterday, and said he wanted to make an offer for another business. We talked for five minutes, I gave him some advice, but I really give them a lot of freedom. I've spent $1.7 billion and I've never even been to the company, at least I hope it's there.
I can't look at this group and tell you which 3 are going to be great managers. I can see it after they've been doing it for a while. Look at Mrs. B. She had one son involved in the business and 3 daughters not involved. She wanted a way to fairly distribute the proceeds of the business and this solved her problem. She worked until she was 103, and died at 104. She lived two blocks from the store. She left price tags on the furniture at her home because it made her feel more comfortable, like she was in the store. She left Russia and landed in Fort Dodge, Iowa. She saved $500 for 16 years to start this business that has the top 2 furniture stores in the nation. You can't hire those kinds of people, no matter what you pay them. We've been lucky that we've never lost a manager to competitors since 1965. Some retire, some were fired, but we give them the opportunity to paint their own canvas.
Austin:
If you could have lunch with one person you have never met, who would it be and why?
Buffett:
I would have to say Isaac Newton or Benjamin Franklin. I've met a lot of interesting people and some uninteresting ones, too. The two men had a bigger grasp of the world they lived in. But I don't think I would pass up an opportunity with Sophia Loren.
Emory:
Mr. Buffett, do you believe that the Federal Reserve is fostering moral hazard thereby leading to the misallocation of capital and subsequent asset bubbles? If so, what are the long term risks?
I would have to say Isaac Newton or Benjamin Franklin. I've met a lot of interesting people and some uninteresting ones, too. The two men had a bigger grasp of the world they lived in. But I don't think I would pass up an opportunity with Sophia Loren.
Emory:
Mr. Buffett, do you believe that the Federal Reserve is fostering moral hazard thereby leading to the misallocation of capital and subsequent asset bubbles? If so, what are the long term risks?
Buffett:
There is always some introduction of moral hazard when government decides to act in favor of the common good versus letting someone fail. There was moral hazard with the bailout of LTCM and there is some aspect of that with the current situation. But it's hard to measure because the consequences are 15-20 years out. During the 1987 market crash, Greenspan was new to the job and unsure of what would happen. The specialist system got hit, most of them operated on very little capital and were broke. The Fed provided them with more capital. Will that change future behavior? Maybe, but at the time it was the right call. It's also resulted in the "Too Big to Fail" doctrine. The big banks, Freddie Mac, and Fannie Mae figured the US Government wouldn't allow them to fail and the managements of those companies knew that. I would be disinclined to second guess the Fed, they have more information and are trying to do what's right.
There is always some introduction of moral hazard when government decides to act in favor of the common good versus letting someone fail. There was moral hazard with the bailout of LTCM and there is some aspect of that with the current situation. But it's hard to measure because the consequences are 15-20 years out. During the 1987 market crash, Greenspan was new to the job and unsure of what would happen. The specialist system got hit, most of them operated on very little capital and were broke. The Fed provided them with more capital. Will that change future behavior? Maybe, but at the time it was the right call. It's also resulted in the "Too Big to Fail" doctrine. The big banks, Freddie Mac, and Fannie Mae figured the US Government wouldn't allow them to fail and the managements of those companies knew that. I would be disinclined to second guess the Fed, they have more information and are trying to do what's right.
Austin:
Given your business success, your immense fortune, and your celebrity status, how do you stay so down to earth and humble? Are there specific people or lessons you have learned throughout your life that enable you to maintain this outlook?
Buffett:
I was lucky to have the right heroes. Tell me who your heroes are and I'll tell you how you'll turn out to be. One of your most important jobs in life will be raising your children. They will learn more from you than they will in graduate school. My father was a huge influence, and later on Graham came along. I was also never let down by my heroes.
I was lucky to have the right heroes. Tell me who your heroes are and I'll tell you how you'll turn out to be. One of your most important jobs in life will be raising your children. They will learn more from you than they will in graduate school. My father was a huge influence, and later on Graham came along. I was also never let down by my heroes.
I had nothing to do with my own success. My father was a securities broker and after the Great Crash, he had no one to call. Consequently, I was born in 1930 in the United States during the time of one of the greatest capital markets. I was born with the wiring for capital asset allocation. I had the right wiring at the right time. Temperament is a large part of my wiring. I was naturally good at it, and I used some feedback to develop it better. There is nothing to be arrogant about. Gates says if I had been born earlier, I would've been some animal's lunch. I can't run, I can't climb. I'd be talking about allocating capital and the animal would think, "Those are the kind that taste the best." You have all won the ovarian lottery. There is no reason to feel guilty about it.
I have never given away a dime that has any meaning on how I live. There are people that go to church and they put money in the offering plate that truly makes a difference in how they will live their lives, what they will eat, what presents they will buy for their children. There's no reason to get puffed up over things you didn't control.
Emory:
Due to the credit crisis and consequently large write-downs, banks have made it more difficult to lend healthy businesses capital for increasing efficiency, expansion, new projects, etc., thereby potentially becoming the primary agents restricting growth. What are your thoughts on liquidity in the marketplace and the possibly of it contributing to a recession? Also, do you see a potential for financial institutions not currently in the lending business stepping in to take advantage of the reduced supply of capital?
Buffett:
What we are seeing is a huge repricing and evaluation of risk, correcting for problems of the past. I don't know of good credit propositions that are going unfulfilled. There's lots of cheap credit for sensible deals, which I don't define as anything that happened over the last 12, 18 months. A lot of things that didn't make sense are being washed out of the system. It is painful for bad decisions. Comparatively, this is not a credit crunch. In 1982 the prime rate was 22% and money was very expensive. In the late 60's, we made a sound deal there wasn't any money to be had. That's not the case now. The Fed has opened the window, and rates are down. It doesn't mean there won't be a major recession.
What we are seeing is a huge repricing and evaluation of risk, correcting for problems of the past. I don't know of good credit propositions that are going unfulfilled. There's lots of cheap credit for sensible deals, which I don't define as anything that happened over the last 12, 18 months. A lot of things that didn't make sense are being washed out of the system. It is painful for bad decisions. Comparatively, this is not a credit crunch. In 1982 the prime rate was 22% and money was very expensive. In the late 60's, we made a sound deal there wasn't any money to be had. That's not the case now. The Fed has opened the window, and rates are down. It doesn't mean there won't be a major recession.
Austin:
What are some of your biggest mistakes or regrets?
Buffett:
We've made lots of mistakes, but they don't bother me. We've had no regrets. We are in the business of making many decisions and there are bound to be mistakes. There are $10 billion mistakes of omission that no one knows about; they don't show up in the accounting. In 1994 we paid $400 worth of Berkshire stock for a shoe company. The company is now worth 0, but the stock is worth $3.5 billion. So now, I'm happy to see Berkshire go down since it reduces the size of my mistake. In 1973 Tom Murphy offered us NBC for $35 million, but we turned it down. That was a huge mistake of omission.
We've made lots of mistakes, but they don't bother me. We've had no regrets. We are in the business of making many decisions and there are bound to be mistakes. There are $10 billion mistakes of omission that no one knows about; they don't show up in the accounting. In 1994 we paid $400 worth of Berkshire stock for a shoe company. The company is now worth 0, but the stock is worth $3.5 billion. So now, I'm happy to see Berkshire go down since it reduces the size of my mistake. In 1973 Tom Murphy offered us NBC for $35 million, but we turned it down. That was a huge mistake of omission.
In my personal life, there are always things I could've done differently. But so many good things have happened. It just doesn't pay to dwell on the bad things. Finding the right spouse is 90% of it. If you are lucky on health and lucky on your spouse, you are a long way home. Getting turned down by HBS was one of the best things that could have happened to me, bad luck can turn out to be good.
Emory:
Could you comment on the current rise of sovereign wealth funds from the Middle East and Asia and how they are playing an increasing role in how corporations raise capital. Is competition from these sources for the cash flows of corporations affecting your investment strategies or opportunities?
Buffett:
Any competition is competition. The situation of sovereign wealth funds is interesting. A lot of it is China bashing, OPEC bashing and plays right into politician's hands. Today, the US will buy $2 billion more from the world than they buy from us. In exchange we give them little pieces of paper and they have to buy assets. As long as we consume more than we produce we have to let the rest of the world invest in us. We created sovereign wealth funds and that $2 billion gains interest. US funds feel they can get the best terms from these foreign investors and lately, enticed them into buying equity. China wanted to buy Unocal, a 3rd rate oil producer with production overseas in places like India. US Congress went ape and 395 representatives signed an anti-Chinese resolution to block the deal. For 100 years the US companies went around buying the world's assets and bribing officials, but told China they couldn't buy Unocal. The Chinese took it, but they didn't like it. It doesn't make sense that we are buying foreign assets, and giving them pieces of paper and then telling them what they can't do with that money. We have created them and I have no objection to them. I recommend an index fund for these sovereign wealth funds. It gives them exposure to the US market, but they won't get taken by salespeople with bad deals. In economics you always want to say "And then what?"
Any competition is competition. The situation of sovereign wealth funds is interesting. A lot of it is China bashing, OPEC bashing and plays right into politician's hands. Today, the US will buy $2 billion more from the world than they buy from us. In exchange we give them little pieces of paper and they have to buy assets. As long as we consume more than we produce we have to let the rest of the world invest in us. We created sovereign wealth funds and that $2 billion gains interest. US funds feel they can get the best terms from these foreign investors and lately, enticed them into buying equity. China wanted to buy Unocal, a 3rd rate oil producer with production overseas in places like India. US Congress went ape and 395 representatives signed an anti-Chinese resolution to block the deal. For 100 years the US companies went around buying the world's assets and bribing officials, but told China they couldn't buy Unocal. The Chinese took it, but they didn't like it. It doesn't make sense that we are buying foreign assets, and giving them pieces of paper and then telling them what they can't do with that money. We have created them and I have no objection to them. I recommend an index fund for these sovereign wealth funds. It gives them exposure to the US market, but they won't get taken by salespeople with bad deals. In economics you always want to say "And then what?"
Austin:
Is the individual investor even capable of assessing the riskiness of securities given the large number of institutions/hedge funds in the market?
Buffett:
I don't think there is much being overlooked now, but I'm forced to look at big things. That's the advantage you have over me. A few years ago a friend of mine mentioned that I should look at Korea. We bought Posco for 3-4 times post-tax earnings. I found 20 other companies selling at 2-3 times earnings and strong balance sheets. I diversified because I didn't know the Korean market as well. We are looking for the very unusual. Occasionally things will happen in a securities market that are extraordinary. I like shooting fish in a barrel, but I like to make sure the water's drained out.
We had that situation a few years ago with the 30 year versus 29 ?year Treasury bonds. Because of less liquidity, the off-the-run bonds were selling for 30 basis points less, which translates into 3% of principal value. LTCM entered the trade at 10 basis points originally, but they overleveraged and were forced to unwind the position. If you went long/short you could make money really quickly.
I don't think there is much being overlooked now, but I'm forced to look at big things. That's the advantage you have over me. A few years ago a friend of mine mentioned that I should look at Korea. We bought Posco for 3-4 times post-tax earnings. I found 20 other companies selling at 2-3 times earnings and strong balance sheets. I diversified because I didn't know the Korean market as well. We are looking for the very unusual. Occasionally things will happen in a securities market that are extraordinary. I like shooting fish in a barrel, but I like to make sure the water's drained out.
We had that situation a few years ago with the 30 year versus 29 ?year Treasury bonds. Because of less liquidity, the off-the-run bonds were selling for 30 basis points less, which translates into 3% of principal value. LTCM entered the trade at 10 basis points originally, but they overleveraged and were forced to unwind the position. If you went long/short you could make money really quickly.
Markets are efficient most of the time about most things. But for these opportunities, nobody will tell you about them. They won't be on CNBC and they won't be in brokerage reports. You have to go find them yourself. In 1951, after I graduated from school, I used Moody's and S&P manuals as my sources of information. I went through them page by page. I was like a basketball coach looking for 7-footers. I still have to find out if he's coordinated, and can stay in school. But if someone comes up to me that's 5'6" and says, "Wait 'til you see me handle the ball", I say "No thanks". On page 1443 of Moody's, I found Western Insurance Securities. It had earned $21.66 per share 2 years ago, and earned $29.09 last year. Over the past year the stock was selling for between $3 and $13 per share. I still had to do the work to make sure the earnings were valid. The markets will get it right eventually. But they are there. You don't have to find too many. Finding 10 of these opportunities in your lifetime will make you so rich. But you can't be wrong. You can't have any zeroes. A list of big numbers multiplied by zero will equal zero. You can't go back to "Go".
Emory:
What do you think of aggregate infrastructure investment to stimulate the economy?
Buffett:
I think the best way to stimulate the economy is to give money to the poor. They will spend it. Don't give it to guys like me. Infrastructure investment makes sense, but we haven't done it in a while and it won't do anything for the next 6-12 months. Infrastructure is not big relative to GDP. We are a consumer-driven society, spending 106% of production.
I think the best way to stimulate the economy is to give money to the poor. They will spend it. Don't give it to guys like me. Infrastructure investment makes sense, but we haven't done it in a while and it won't do anything for the next 6-12 months. Infrastructure is not big relative to GDP. We are a consumer-driven society, spending 106% of production.
Austin:
Who do you think will be one of the next greatest investors and are you partial to favoring someone with a similar investment style as yours?
Buffett:
We just finished looking for someone. The Board has 3 candidates to replace me as CEO and 4 candidates to replace me as investor. They are all doing fine where they are, but they would be willing to come over to Berkshire for less pay.
We just finished looking for someone. The Board has 3 candidates to replace me as CEO and 4 candidates to replace me as investor. They are all doing fine where they are, but they would be willing to come over to Berkshire for less pay.
In 1969, I wound up my partnership and I had to help people find someone to manage their money. I recommended Bill Ruane of Sequoia Fund, Sandy Gottesman, who is currently on the board at Berkshire, and Walter Schloss, who I wrote about in "The Superinvestors of Graham and Dodds-ville". There's no way they could miss.
But I don't know many of the newer investors, they're not my contemporaries. It's not enough to just look at track records. They aren't predictive and there will always be a few people that do well. I know guys who can make 50% a year with $5 million, but not with $1 billion. The problem with guys that do well is they attract so much money that it neutralizes their advantage. It's hard to identify them, and even harder to make a deal to keep them from attracting other capital. It's like betting on a 12 year old horse that won at 3 years old. It's also important to avoid managers who use leverage. It's the reason that investors with 160 IQs flame out.
Emory:
At the Wesco annual meeting last year, Charlie said, "The best way to get success is to deserve success". Do you recall anything from your experience which best demonstrates how you were able to position yourself to deserve success, and do you have any advice for students on how they can position themselves to deserve success as well?
Buffett:
Behaving decent is a large part of it. Out of school I offered to work for Graham for free and he said I was overpriced. I tried to be useful and visible to him. I gave him stock tips and kept up with him. Almost always good things come from good behavior. Don't keep score in life. Tom Murphy does not keep score. He keeps doing 20 things for me and I can only hope to return the favor. Keeping score is terrible in marriage and terrible in business. I put myself in the seller's shoes. With most humans there is a great desire to reciprocate. If you do something for them, they will do 2X for you. How rare is it to work during lunch hours and be the first one there in the morning. You'll get noticed if you do something extra. It's good to have a willingness to pitch in when you aren't going to get credit for it. Charlie and I partnered up in 1959. We always both think we're right. We disagree but we've never fought. And we've never held past mistakes over each other's heads. I recommend reading "Poor Charlie's Almanack". It's amazing, has sold 50,000 copies and it's still sold independently.
Behaving decent is a large part of it. Out of school I offered to work for Graham for free and he said I was overpriced. I tried to be useful and visible to him. I gave him stock tips and kept up with him. Almost always good things come from good behavior. Don't keep score in life. Tom Murphy does not keep score. He keeps doing 20 things for me and I can only hope to return the favor. Keeping score is terrible in marriage and terrible in business. I put myself in the seller's shoes. With most humans there is a great desire to reciprocate. If you do something for them, they will do 2X for you. How rare is it to work during lunch hours and be the first one there in the morning. You'll get noticed if you do something extra. It's good to have a willingness to pitch in when you aren't going to get credit for it. Charlie and I partnered up in 1959. We always both think we're right. We disagree but we've never fought. And we've never held past mistakes over each other's heads. I recommend reading "Poor Charlie's Almanack". It's amazing, has sold 50,000 copies and it's still sold independently.
Austin:
Have there been instances in your career where you have been tempted to deviate from your strategy and if so, how did you handle that?
Buffett:
I'm not that type. I'm not disciplined. I just naturally want to do things that make sense. In my personal life too, I don't care what other rich people are doing. I don't want a 405 foot boat just because someone else has a 400 foot boat. Some of my friends have big boats where 55 people are serving 14. Of those 55, some will be stealing from you, some will be sleeping with each other, and I just don't want to deal with that. My friends have the boats, so I'm the ultimate freeloader. I don't need multiple houses. If I wanted to do something wild & crazy I could do it, but Anna Nicole Smith is gone. Reminds me of the story of the 60 year old man that got a 25 year old to marry him. When his friends asked how he did it, he replied, "I told her I was 90."
I'm not that type. I'm not disciplined. I just naturally want to do things that make sense. In my personal life too, I don't care what other rich people are doing. I don't want a 405 foot boat just because someone else has a 400 foot boat. Some of my friends have big boats where 55 people are serving 14. Of those 55, some will be stealing from you, some will be sleeping with each other, and I just don't want to deal with that. My friends have the boats, so I'm the ultimate freeloader. I don't need multiple houses. If I wanted to do something wild & crazy I could do it, but Anna Nicole Smith is gone. Reminds me of the story of the 60 year old man that got a 25 year old to marry him. When his friends asked how he did it, he replied, "I told her I was 90."
Emory:
It seems that the worldwide trend is towards lower corporate tax rates. Do you think that the US risks becoming less competitive if it maintains its current corporate tax rate?
Buffett:
Relative to GDP, government taxation is 18.5% and spending is 20%, so we borrow the balance. The national debt should not be a scary topic and the fact that it's gone up is fine as long as it's proportional to GDP. Where do we get that 18.5%? There's 2.7 trillion in government revenues. 2.2 trillion comes from individuals, and less than 1% of that comes from the estate tax. 1.1 trillion comes from income taxes, with payroll taxes consisting of 900 billion, but it's capped at the first $100,000 of salary. We want a tax system that encourages greater prosperity, but it needs to take care of the family.
Relative to GDP, government taxation is 18.5% and spending is 20%, so we borrow the balance. The national debt should not be a scary topic and the fact that it's gone up is fine as long as it's proportional to GDP. Where do we get that 18.5%? There's 2.7 trillion in government revenues. 2.2 trillion comes from individuals, and less than 1% of that comes from the estate tax. 1.1 trillion comes from income taxes, with payroll taxes consisting of 900 billion, but it's capped at the first $100,000 of salary. We want a tax system that encourages greater prosperity, but it needs to take care of the family.
We did an informal office survey by looking at the total tax footprint versus the total income. I earned 46 million and paid a tax rate of 17.5%. My rate was the lowest, the average was 33%, and my cleaning lady paid 40%. The system is tilted towards the rich. The Forbes 400 total net worth has gone from 220 billion to 1.54 trillion, an increase of 7-to-1. You see in legislature that there is lobbying carried on by the powerful over issues such as the estate tax and carried interest for private equity investments. We need to flatten income and payroll taxes, and those making under $30,000 shouldn't be bothered.
Let's imagine that 24 hours before you are born, a genie comes to you and tells you devise a social and economic system. The only catch is that after you designed the system, you would choose a paper from a barrel which would determine your demographics. What objectives would you want? You need to devise a system that creates prosperity. It needs to be a meritocracy, to put the right people in the right place. It needs to have a strong education system, and throw off lots of goods and services. It also needs to not discriminate against women or minorities. Even though the per capita GDP is $47,000, 20% of the population makes less than $20,000. We need to eliminate that fear of sickness or old age. A tax code is the codification of a country's values. But you can't kill the golden goose of prosperity.
Austin:
There is always mention that some of your success could be attributed to not buying in to the Wall Street mania b/c you are in Omahahat importance do you give to balance as it pertains to work and life and what do you do to maintain your appropriate balance?
Buffett:
I have so much fun that it's not work. I get to do what I want, where I want ?on a boat, wherever. My wife was responsible for bringing up the children. Neither of us had problems with that arrangement, and it made sense from an Adam Smith "division of labor" perspective. It will be a much tougher choice for women, and always be somewhat unequal. In my own life I did virtually no social functions or meetings that I didn't want to do. In my adult business life I have never had to make a choice of trading between professional and personal. I have simple pleasures. I play bridge online for 12 hours a week. Bill and I play, he's "chalengr" and I'm "tbone".
After a talk at Harvard, I told them to work for who they admired the most, so they all become self-employed. It's important to go to work for someone or some organization you admire. I've not seen many males having to make tough choices. But women are the ones who have tough situations.
I have so much fun that it's not work. I get to do what I want, where I want ?on a boat, wherever. My wife was responsible for bringing up the children. Neither of us had problems with that arrangement, and it made sense from an Adam Smith "division of labor" perspective. It will be a much tougher choice for women, and always be somewhat unequal. In my own life I did virtually no social functions or meetings that I didn't want to do. In my adult business life I have never had to make a choice of trading between professional and personal. I have simple pleasures. I play bridge online for 12 hours a week. Bill and I play, he's "chalengr" and I'm "tbone".
After a talk at Harvard, I told them to work for who they admired the most, so they all become self-employed. It's important to go to work for someone or some organization you admire. I've not seen many males having to make tough choices. But women are the ones who have tough situations.
2007年12月15日星期六
Charlie Munger's 10 Rules for Investment Success
By Morgan Housel December 13, 2007
Those of you lucky enough to attend a Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B) annual shareholder meeting have undoubtedly heard Charlie Munger say, "I have nothing to add."
In reality, the guy has quite a bit to add. Thankfully for us, Munger is almost as forthcoming with his investment thoughts as his pal Warren Buffett. In his must-read book, Poor Charlie's Almanac, Munger puts forth a 10-step checklist that even the most inexperienced investors could benefit from.
1. Measure risk
All investment evaluations should begin by measuring risk, especially reputational.
It's crucially important to understand that from time to time, your investments won't turn out the way you wanted. To protect your portfolio, don't set yourself up for complete failure in the first place. Giving yourself a large margin of safety, avoiding people of questionable character, and only taking on risk when you can be sure you'll be satisfactorily rewarded are all steps in the right direction. Companies like Chipotle (NYSE: CMG) might have perfectly bright futures, but when their shares are priced for perfection, they might nonetheless prove too risky for savvy investors.
2. Be independent
Only in fairy tales are emperors told they're naked.
With stockbrokers often rewarded for activity, not successful investments, it's critically important to make sure you believe that what you're doing is right. Chasing others' opinions may seem logical, but investors like Munger and Buffett often succeed by going against the grain. Big Berkshire investments such as Coca-Cola (NYSE: KO), and more recently Petrochina (NYSE: PTR), were largely ignored by the masses when they were first made.
3. Prepare ahead
The only way to win is to work, work, work, and hope to have a few insights.
It shouldn't surprise you that the best investments aren't the ones we typically read about in the paper. The diamonds in the rough are out there, but finding them requires effort. Buffett reads thousands of annual reports to cultivate ideas -- even if he only comes up with a few candidates each year. Munger advocates a constant curiosity for nearly everything in life. If you never stop asking the "whys" in what you do, you won't have trouble staying motivated.
4. Have intellectual humility
Acknowledging what you don't know is the dawning of wisdom.
Perhaps most crucially to Berkshire's success, its leaders never stray away from their comfort zones. In investing, a clear idea of what the business will look like in the future counts most. If you struggle to comprehend what the business does today, you might as well be throwing darts. While companies like Google (Nasdaq: GOOG) and Boston Scientific (NYSE: BSX) are certainly titans in their own right today, they might look drastically different in five to 10 years.
5. Analyze rigorously
Use effective checklists to minimize errors and omissions.
The numbers don't lie. When researching investments, Buffett and Munger like to try to estimate the security's worth before they even look at its price. They are businessmen, not stock-market junkies. They focus their brainpower on the value of businesses, not convoluted economic forecasts or intricate market-timing techniques. Munger is incredibly brilliant, but the analytical rigor of his investment decisions is based around simplicity, not complexity.
6. Allocate assets wisely
Proper allocation of capital is an investor's No. 1 job.
In the early days of Munger's investment partnership, he held very few securities. When good ideas came, he poured significant capital into them; otherwise, he simply enjoyed the California sun. The amount of money employed in each of your investments should relate directly to its attractiveness. When you find a great investment, don't be afraid to bet big on it.
7. Have patience
Resist the natural human bias to act.
Munger said it best himself: "Half of Warren's time is sitting on his ass and reading; the other half is spent talking on the phone or in person to a highly gifted person that he trusts and trust him." While it can be tempting to jump in and out of the market, true fortunes are made from big commitments in quality companies, held indefinitely. When you're done with that, find a hobby. Spending all day watching stock tickers won't do you much good.
8. Be decisive
When proper circumstances present themselves, act with decisiveness and conviction.
This also goes back to not following the herd. When others are jubilant, you should be scared, and vice versa. Don't let others' emotions sway you; the market masses should help you find opportunities in their absence, not guide you down their own path to mediocrity.
9. Be ready for change
Accept unremovable complexity.
Investing success requires us to accept inevitable changes. Munger and Buffett hated railroads for decades, but as the times changed, they threw their old thoughts out the door and invested billions. The world around us won't always conform to our preferences and prejudices, and sometimes our best ideas will prove incorrect. If you aren't willing to roll with a changing market, you may find yourself fighting a lost cause.
10. Stay focused
Keep it simple and remember what you set out to do.
In chasing little, unimportant things, we often overlook huge and critical factors. But by keeping it simple , we can fixate on what really matters: buying good companies at a good price, and holding them until they're fully priced.
Charlie Munger often gets overshadowed by his more famous partner, but don't assume that's any reflection of Munger's own genius. He's undoubtedly been a guiding light for Buffett himself, and by any count, he should go down as one of the greatest investors of all time.
http://www.fool.com/investing/general/2007/12/13/charlie-mungers-10-rules-for-investment-success.aspx
Those of you lucky enough to attend a Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B) annual shareholder meeting have undoubtedly heard Charlie Munger say, "I have nothing to add."
In reality, the guy has quite a bit to add. Thankfully for us, Munger is almost as forthcoming with his investment thoughts as his pal Warren Buffett. In his must-read book, Poor Charlie's Almanac, Munger puts forth a 10-step checklist that even the most inexperienced investors could benefit from.
1. Measure risk
All investment evaluations should begin by measuring risk, especially reputational.
It's crucially important to understand that from time to time, your investments won't turn out the way you wanted. To protect your portfolio, don't set yourself up for complete failure in the first place. Giving yourself a large margin of safety, avoiding people of questionable character, and only taking on risk when you can be sure you'll be satisfactorily rewarded are all steps in the right direction. Companies like Chipotle (NYSE: CMG) might have perfectly bright futures, but when their shares are priced for perfection, they might nonetheless prove too risky for savvy investors.
2. Be independent
Only in fairy tales are emperors told they're naked.
With stockbrokers often rewarded for activity, not successful investments, it's critically important to make sure you believe that what you're doing is right. Chasing others' opinions may seem logical, but investors like Munger and Buffett often succeed by going against the grain. Big Berkshire investments such as Coca-Cola (NYSE: KO), and more recently Petrochina (NYSE: PTR), were largely ignored by the masses when they were first made.
3. Prepare ahead
The only way to win is to work, work, work, and hope to have a few insights.
It shouldn't surprise you that the best investments aren't the ones we typically read about in the paper. The diamonds in the rough are out there, but finding them requires effort. Buffett reads thousands of annual reports to cultivate ideas -- even if he only comes up with a few candidates each year. Munger advocates a constant curiosity for nearly everything in life. If you never stop asking the "whys" in what you do, you won't have trouble staying motivated.
4. Have intellectual humility
Acknowledging what you don't know is the dawning of wisdom.
Perhaps most crucially to Berkshire's success, its leaders never stray away from their comfort zones. In investing, a clear idea of what the business will look like in the future counts most. If you struggle to comprehend what the business does today, you might as well be throwing darts. While companies like Google (Nasdaq: GOOG) and Boston Scientific (NYSE: BSX) are certainly titans in their own right today, they might look drastically different in five to 10 years.
5. Analyze rigorously
Use effective checklists to minimize errors and omissions.
The numbers don't lie. When researching investments, Buffett and Munger like to try to estimate the security's worth before they even look at its price. They are businessmen, not stock-market junkies. They focus their brainpower on the value of businesses, not convoluted economic forecasts or intricate market-timing techniques. Munger is incredibly brilliant, but the analytical rigor of his investment decisions is based around simplicity, not complexity.
6. Allocate assets wisely
Proper allocation of capital is an investor's No. 1 job.
In the early days of Munger's investment partnership, he held very few securities. When good ideas came, he poured significant capital into them; otherwise, he simply enjoyed the California sun. The amount of money employed in each of your investments should relate directly to its attractiveness. When you find a great investment, don't be afraid to bet big on it.
7. Have patience
Resist the natural human bias to act.
Munger said it best himself: "Half of Warren's time is sitting on his ass and reading; the other half is spent talking on the phone or in person to a highly gifted person that he trusts and trust him." While it can be tempting to jump in and out of the market, true fortunes are made from big commitments in quality companies, held indefinitely. When you're done with that, find a hobby. Spending all day watching stock tickers won't do you much good.
8. Be decisive
When proper circumstances present themselves, act with decisiveness and conviction.
This also goes back to not following the herd. When others are jubilant, you should be scared, and vice versa. Don't let others' emotions sway you; the market masses should help you find opportunities in their absence, not guide you down their own path to mediocrity.
9. Be ready for change
Accept unremovable complexity.
Investing success requires us to accept inevitable changes. Munger and Buffett hated railroads for decades, but as the times changed, they threw their old thoughts out the door and invested billions. The world around us won't always conform to our preferences and prejudices, and sometimes our best ideas will prove incorrect. If you aren't willing to roll with a changing market, you may find yourself fighting a lost cause.
10. Stay focused
Keep it simple and remember what you set out to do.
In chasing little, unimportant things, we often overlook huge and critical factors. But by keeping it simple , we can fixate on what really matters: buying good companies at a good price, and holding them until they're fully priced.
Charlie Munger often gets overshadowed by his more famous partner, but don't assume that's any reflection of Munger's own genius. He's undoubtedly been a guiding light for Buffett himself, and by any count, he should go down as one of the greatest investors of all time.
http://www.fool.com/investing/general/2007/12/13/charlie-mungers-10-rules-for-investment-success.aspx
2007年11月8日星期四
What is the definition of "DOLLAR"?
Everyone of us gets up early in the morning and go to work. For what? To make money! But what is money in the first place? Surprisingly, virtually all people readily accept this creation. Stop and think really carefully, I mean if we ever have the courage and curiosity to challenge the fallacy in our daily lives.
Why is an ounce of gold defined in terms of dollar? Why shouldn't a dollar be expressed in terms of a certain weights of gold? Why in terms of gold, and not silver, copper, bread, car, or whatsoever?
I have included a couple of links which try to address this vital issue.
http://www.seek2know.net/money.html
http://www.geocities.com/tthor.geo/debasedmoney.html
http://www.uhuh.com/unreal/lincoln.htm
http://www.fee.org/publications/the-freeman/article.asp?aid=3102
http://www.mises.org/article.aspx?Id=1503
http://www.answers.com/topic/gold-standard-act
http://www.rbs2.com/gold.pdf
Also, I have included some excerpts from my favourite documentary - America: Freedom to Fascism
http://www.youtube.com/watch?v=v0JEINTdc08
http://www.youtube.com/watch?v=OPiF7bne70Y
http://www.youtube.com/watch?v=TuXc1WleFUM
Finally, I want to end today's blog by quoting a statement from Abraham Lincoln on monetary policy.
No duty is more imperative on the Government than the duty it owes the people to furnish them with a sound and uniform currency, and of regulating the circulation of the medium of exchange so that labor will be protected from a vicious currency, and commerce will be facilitated by cheap and safe exchanges.
Why is an ounce of gold defined in terms of dollar? Why shouldn't a dollar be expressed in terms of a certain weights of gold? Why in terms of gold, and not silver, copper, bread, car, or whatsoever?
I have included a couple of links which try to address this vital issue.
http://www.seek2know.net/money.html
http://www.geocities.com/tthor.geo/debasedmoney.html
http://www.uhuh.com/unreal/lincoln.htm
http://www.fee.org/publications/the-freeman/article.asp?aid=3102
http://www.mises.org/article.aspx?Id=1503
http://www.answers.com/topic/gold-standard-act
http://www.rbs2.com/gold.pdf
Also, I have included some excerpts from my favourite documentary - America: Freedom to Fascism
http://www.youtube.com/watch?v=v0JEINTdc08
http://www.youtube.com/watch?v=OPiF7bne70Y
http://www.youtube.com/watch?v=TuXc1WleFUM
Finally, I want to end today's blog by quoting a statement from Abraham Lincoln on monetary policy.
No duty is more imperative on the Government than the duty it owes the people to furnish them with a sound and uniform currency, and of regulating the circulation of the medium of exchange so that labor will be protected from a vicious currency, and commerce will be facilitated by cheap and safe exchanges.
2007年10月12日星期五
謝國忠警告：內地及香港股市已明顯出現泡沫
股神減持中石油是錯不了的。巴非特的新主張一書提到，當價值投資者離場，泡沫離爆破之時就大概不遠了......
當我打開中國遠洋（1919）的圖表一看，就更肯定個別中資股已形成泡沫。在我印象中，沒有什麼股票可以在一年之内上升10倍吧，113倍的市盈率不是泡沫是什麼呀？更何況一支航運股根本就談不上有投資的價值。
無論是因為是市場解讀自由行資金會繼續推高港股（熱錢本來就來去自如，來得快，走得更快），還是股民認為中央政府或金管局會隨時入場托市（中移動難道就未試過爆破嗎？），還是什麼08奧運泡沫才會爆破之說，都只是一廂情願的想法而已！
只是令我不解的是，除了一堆優點説不上很強的中資股被相中之外，連真正有投資價值的港交所也被炒到天o甘高，那才叫做觸目驚心！（什麼與内地交易所接軌而有必要增持之類的理由，聽起來都像屁話，港交所本來就跟一個公營部門沒啥分別，根本就輪不到外資大股東左右大局。）
連恆生銀行都有得升，但滙豐銀行就偏偏原地踏步，實在摸不着頭腦啊！
大家又在大玩博傻理論了，只是以往由外資呼風喚雨的時代，這次由内地資金接力而已......在一個沒有金本位的年代，資金泛濫是必然的結果，是弱美元所致，還是濫發人民幣的結果？學曹仁超講，木宰羊。
總而言之，泡沫都會有爆破的一天，只是看看誰是那個不幸的博傻而已......
http://udn.com/NEWS/FINANCE/FINS2/4047555.shtml
香港恆生指數近期劇烈波動，外界解讀，這是大陸股民趁著長假，齊赴香港炒股導致。有專家指出，港股和A股連動現象，愈來愈明顯，但「港股A股化」後，卻不利港股正常發展。
香港恆生指數近日大幅波動，甚至還在同一天內演出指數來回差距千點等大波動現象。昨（9）日一早，恆生指數彈上27,838點，隨後迅速回跌到27,492點，但下午卻立刻漲回28,228點，以上漲458點作收。
但美國「股神」巴菲特昨天再賣中石油的股票，持股由6.49%降到5.44%。這是今年7月以來，他第六度出脫中石油天然氣的持股。
新華社報導指出，十一黃金周期間，大陸A股有九天不開市，但港股交易火爆，恆生指數不僅首次突破28,000點大關，還發生瞬間爆發的網上交易高峰，令滙豐和恒生銀行的網上理財服務系統癱瘓近四小時。
隨後恆生指數一路暴起暴落，但交易量始終並未衰退，因此有外界認為，港股大幅波動，和一些大陸游資趁著長假，南下香港炒股有關。
這些股民買賣港股手法，和炒賣A股相當接近。由於多數大陸居民投資港股，都是採用網上交易模式，也間接證明，這些股民和滙豐、恒生銀行網路癱瘓，難脫關係。
獨立經濟學家謝國忠發出警告指出，近幾個月來，累積升幅驚人的大陸及香港股市已明顯出現泡沫，情況較1997年要更為嚴重。他認為，A股市場有可能面臨急跌，和大陸股市關聯性日深的香港股市，也會受到牽連。
摩根大通上周的研究報告，同樣預警了香港股市的泡沫情況。大陸社科院金融所研究員易憲容表示，近一段時間來，香港股市開始A股化的跡象，都表明，大陸股民操縱炒作現象已開始蔓延到香港。任何一條消息就能夠讓香港股市大起大跌。
他認為，港股A股化，對香港經濟的發展相當不利，為了不讓港股A股化，就得讓香港的市場經濟原則、法律制度、信用合約精神湧向大陸市場，透過市場法則來幫助及影響大陸股市發展，而不是反之遭到A股化。
當我打開中國遠洋（1919）的圖表一看，就更肯定個別中資股已形成泡沫。在我印象中，沒有什麼股票可以在一年之内上升10倍吧，113倍的市盈率不是泡沫是什麼呀？更何況一支航運股根本就談不上有投資的價值。
無論是因為是市場解讀自由行資金會繼續推高港股（熱錢本來就來去自如，來得快，走得更快），還是股民認為中央政府或金管局會隨時入場托市（中移動難道就未試過爆破嗎？），還是什麼08奧運泡沫才會爆破之說，都只是一廂情願的想法而已！
只是令我不解的是，除了一堆優點説不上很強的中資股被相中之外，連真正有投資價值的港交所也被炒到天o甘高，那才叫做觸目驚心！（什麼與内地交易所接軌而有必要增持之類的理由，聽起來都像屁話，港交所本來就跟一個公營部門沒啥分別，根本就輪不到外資大股東左右大局。）
連恆生銀行都有得升，但滙豐銀行就偏偏原地踏步，實在摸不着頭腦啊！
大家又在大玩博傻理論了，只是以往由外資呼風喚雨的時代，這次由内地資金接力而已......在一個沒有金本位的年代，資金泛濫是必然的結果，是弱美元所致，還是濫發人民幣的結果？學曹仁超講，木宰羊。
總而言之，泡沫都會有爆破的一天，只是看看誰是那個不幸的博傻而已......
http://udn.com/NEWS/FINANCE/FINS2/4047555.shtml
香港恆生指數近期劇烈波動，外界解讀，這是大陸股民趁著長假，齊赴香港炒股導致。有專家指出，港股和A股連動現象，愈來愈明顯，但「港股A股化」後，卻不利港股正常發展。
香港恆生指數近日大幅波動，甚至還在同一天內演出指數來回差距千點等大波動現象。昨（9）日一早，恆生指數彈上27,838點，隨後迅速回跌到27,492點，但下午卻立刻漲回28,228點，以上漲458點作收。
但美國「股神」巴菲特昨天再賣中石油的股票，持股由6.49%降到5.44%。這是今年7月以來，他第六度出脫中石油天然氣的持股。
新華社報導指出，十一黃金周期間，大陸A股有九天不開市，但港股交易火爆，恆生指數不僅首次突破28,000點大關，還發生瞬間爆發的網上交易高峰，令滙豐和恒生銀行的網上理財服務系統癱瘓近四小時。
隨後恆生指數一路暴起暴落，但交易量始終並未衰退，因此有外界認為，港股大幅波動，和一些大陸游資趁著長假，南下香港炒股有關。
這些股民買賣港股手法，和炒賣A股相當接近。由於多數大陸居民投資港股，都是採用網上交易模式，也間接證明，這些股民和滙豐、恒生銀行網路癱瘓，難脫關係。
獨立經濟學家謝國忠發出警告指出，近幾個月來，累積升幅驚人的大陸及香港股市已明顯出現泡沫，情況較1997年要更為嚴重。他認為，A股市場有可能面臨急跌，和大陸股市關聯性日深的香港股市，也會受到牽連。
摩根大通上周的研究報告，同樣預警了香港股市的泡沫情況。大陸社科院金融所研究員易憲容表示，近一段時間來，香港股市開始A股化的跡象，都表明，大陸股民操縱炒作現象已開始蔓延到香港。任何一條消息就能夠讓香港股市大起大跌。
他認為，港股A股化，對香港經濟的發展相當不利，為了不讓港股A股化，就得讓香港的市場經濟原則、法律制度、信用合約精神湧向大陸市場，透過市場法則來幫助及影響大陸股市發展，而不是反之遭到A股化。
2007年10月4日星期四
So what is inflation?
Inflation is a decline in the monetary standard, according to Robert Mundell.
By this definition, inflation is not measured by rising price indices, nor is deflation measured by falling price indices.
The central function of money was as a standard unit of account. The decline in a standard reflects not its rise or fall in value but its deteriorating stability, credibility, and constancy.
Check out Jude Wanniski's teaching.
http://wanniski.com/defmonster.asp
By this definition, inflation is not measured by rising price indices, nor is deflation measured by falling price indices.
The central function of money was as a standard unit of account. The decline in a standard reflects not its rise or fall in value but its deteriorating stability, credibility, and constancy.
Check out Jude Wanniski's teaching.
http://wanniski.com/defmonster.asp
2007年10月3日星期三
Party Like It's 1999?
http://www.ft.com/cms/s/0/434df73c-714b-11dc-98fc-0000779fd2ac.html
Excerpts
Recent history, in turn, suggests that such "emergency" rate cuts by the Fed have the effect of inflating asset price bubbles. That is potentially great news for equity investors.
In October 1998, when the Fed under Alan Greenspan was forced to cut the Fed funds rate to bring back liquidity to the markets after the near-meltdown of the Long-Term Capital Management hedge fund, the result was also to stimulate markets that had not needed the help. Large technology stocks, and the growing wave of dotcoms, were the greatest beneficiaries. The Nasdaq Composite index gained 40 per cent in three months, and tripled in less than 18 months as it roared through 1999. This helps explain why many in the market now refer to stocks as "partying like it's 1999".
There is another example. In 1987, after Alan Greenspan's Fed cut rates to avert a crisis in the wake of the Black Monday stock market crash, the response was again a bubble. That time, however, it was in Japanese stocks, which more than doubled in the two years after Black Monday, before beginning a long drawn-out collapse.
"This is a classic event, which happens every decade. You have the Fed tightening, then there's some kind of crisis, and then the Fed bails out, and when they do there's another leg up for someone," says Nick Raich, director of equity research at National City bank in Cleveland. "Each time it's a different sector than it was in the previous decade."
Traders know that both these incidents created bubbles that eventually burst. But they also know that in both 1998 and 1987, the euphoria created by the rate cuts lasted more than a year - plenty of time to make strong short-term profits.
Teun Draaisma, European equity strategist at Morgan Stanley, advocated selling in June, and then aggressively re-entering the market in August, for exactly these reasons. He says another "equity mania" is possible, with retail investors piling in and companies indulging in strategic mergers and deals. "If we are right, then equities could be set for a big, big rally," he says. "Bulls will say that this uptrend is unbreakable after all the trouble that has been thrown at it. Emerging markets will be seen as the new growth engine that cannot be derailed."
He also predicts that the episode will "end in tears" - but that still leaves time for investors to make fat profits in the interim.
As everyone is working on the same assumptions, gains could be limited this time. Tobias Levkovich, US equity strategist at Citigroup, who has been strongly optimistic on the market for most of this year, sounds a note of caution. "As most investors are now searching for performance data on past beneficiaries of Fed actions," he says, "we suspect some 'institutional herding' may arbitrage away much of the opportunity fairly quickly."
The Fed itself is also acutely conscious of what happened in 1999. If crisis in the money markets is indeed averted, the Bernanke Fed might well move much quicker than the Greenspan Fed did to raise rates and avert the risk of a big bubble.
Excerpts
Recent history, in turn, suggests that such "emergency" rate cuts by the Fed have the effect of inflating asset price bubbles. That is potentially great news for equity investors.
In October 1998, when the Fed under Alan Greenspan was forced to cut the Fed funds rate to bring back liquidity to the markets after the near-meltdown of the Long-Term Capital Management hedge fund, the result was also to stimulate markets that had not needed the help. Large technology stocks, and the growing wave of dotcoms, were the greatest beneficiaries. The Nasdaq Composite index gained 40 per cent in three months, and tripled in less than 18 months as it roared through 1999. This helps explain why many in the market now refer to stocks as "partying like it's 1999".
There is another example. In 1987, after Alan Greenspan's Fed cut rates to avert a crisis in the wake of the Black Monday stock market crash, the response was again a bubble. That time, however, it was in Japanese stocks, which more than doubled in the two years after Black Monday, before beginning a long drawn-out collapse.
"This is a classic event, which happens every decade. You have the Fed tightening, then there's some kind of crisis, and then the Fed bails out, and when they do there's another leg up for someone," says Nick Raich, director of equity research at National City bank in Cleveland. "Each time it's a different sector than it was in the previous decade."
Traders know that both these incidents created bubbles that eventually burst. But they also know that in both 1998 and 1987, the euphoria created by the rate cuts lasted more than a year - plenty of time to make strong short-term profits.
Teun Draaisma, European equity strategist at Morgan Stanley, advocated selling in June, and then aggressively re-entering the market in August, for exactly these reasons. He says another "equity mania" is possible, with retail investors piling in and companies indulging in strategic mergers and deals. "If we are right, then equities could be set for a big, big rally," he says. "Bulls will say that this uptrend is unbreakable after all the trouble that has been thrown at it. Emerging markets will be seen as the new growth engine that cannot be derailed."
He also predicts that the episode will "end in tears" - but that still leaves time for investors to make fat profits in the interim.
As everyone is working on the same assumptions, gains could be limited this time. Tobias Levkovich, US equity strategist at Citigroup, who has been strongly optimistic on the market for most of this year, sounds a note of caution. "As most investors are now searching for performance data on past beneficiaries of Fed actions," he says, "we suspect some 'institutional herding' may arbitrage away much of the opportunity fairly quickly."
The Fed itself is also acutely conscious of what happened in 1999. If crisis in the money markets is indeed averted, the Bernanke Fed might well move much quicker than the Greenspan Fed did to raise rates and avert the risk of a big bubble.
2007年9月28日星期五
再談貨幣戰爭
貨幣戰爭本身是一本抄襲之作，充斥著太多陰謀論，而且故事說一半又不說另一半。例如：說巴非特預期美元貶值而大量買入白銀，但股神去年早就白銀部位平倉掉了。就算黃金白銀再好，也犯不着在股神出了貨，我此等散戶才跟進去吧。總的來說，這本書就是七分真話夾雜三分屁話，but so what?
但把它全盤否定又說不過去，因爲我就是順着裏面的注釋把格林斯潘的 Money and Economic Freedom，John Perkins 的 Confessions of EHM，還有 Murray Rothbard 的 The Mystery of Banking 等通通找出來細閱一番，才讓我茅塞頓開。
http://www.mises.org/Books/mysteryofbanking.pdf
當然少不了這篇最近才發現的好文章。
http://blog.xuite.net/g1.p2/critique/12457612
不過，還真要佩服内地網民的“踢爆”能力。
http://www.douban.com/review/1201809/
但把它全盤否定又說不過去，因爲我就是順着裏面的注釋把格林斯潘的 Money and Economic Freedom，John Perkins 的 Confessions of EHM，還有 Murray Rothbard 的 The Mystery of Banking 等通通找出來細閱一番，才讓我茅塞頓開。
http://www.mises.org/Books/mysteryofbanking.pdf
當然少不了這篇最近才發現的好文章。
http://blog.xuite.net/g1.p2/critique/12457612
不過，還真要佩服内地網民的“踢爆”能力。
http://www.douban.com/review/1201809/
2007年9月27日星期四
A Collection of the EHM Series
What is EHM? Economic Hit Man:(
There are at least 3 books about the storys of the EHM, corporatocracy, and last but certainly not least, the US Empire.
There are at least 3 books about the storys of the EHM, corporatocracy, and last but certainly not least, the US Empire.
- Confessions of an Economic Hit Man
- The Secret of History of the American Empire
- A Game as Old as Empire: The Secret World of Economic Hit Men and the Web of Global Corruption
在香港未有廉正公署之前，警察被稱為「正牌爛仔」，行徑令人討厭。而現今的國際舞台上，美國常以「國際警察」自居，但實際上可能其實只是一個國際級的「正牌爛仔」。
2007年9月18日星期二
Austrian School of Economics
I learnt about the Austrian School of Economics from 貨幣戰爭. The most famous scholar is probably Murray Rothbard. I asked the staff from Ludwig von Mises Institute which book is most worth reading. They recommend "What Has Government Done to Our Money?" by Murray Rothbard.
http://www.mises.org/money.asp
http://www.mises.org/money.asp
2007年9月17日星期一
What's wrong with the Fed?
Federal-Reserve-System fiat currency and fractional-reserve banking is plainly unconstitutional, inherently fraudulent, economically unworkable in the long run, and subversive of America's political traditions of individual liberty and private property.
http://home.hiwaay.net/~becraft/VieiraMono4.htm
In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. ..... The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.
http://www.usagold.com/gildedopinion/greenspan.html
http://home.hiwaay.net/~becraft/VieiraMono4.htm
In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. ..... The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.
http://www.usagold.com/gildedopinion/greenspan.html
2007年9月13日星期四
Human Action by Ludwig von Mises
I have always liked to get to know other schools of economics because I suppose the mainstream like Keynes and Friedman are sanctioned by politicians. I learnt about Ludwig von Mises from the website of Jude Wanniski. I'll see if his book, Human Actions, is a good one.
2007年9月12日星期三
Gold Standard and Hyperinflation
In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.
This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard.
by Alan Greenspan1967
http://www.usagold.com/gildedopinion/greenspan.html
For curiosity, I got interested in getting to know more about hyperinflation, too.
http://www.pbs.org/wgbh/commandingheights/shared/minitext/col_hyperinflation.html
2007年9月10日星期一
Quotes of the Day by Terry Venables
"When you have coached at the level both he and I have, you know all the tricks and the mind games."
2007年9月2日星期日
中國威脅拋售美債的目的......
http://www.atchinese.com/index.php?option=com_content&task=view&id=38090&Itemid=110
英國《每日電訊報》近日將中國1.3兆美元的外匯儲備比喻為“核武器”，引述北京經濟智囊夏斌指中國或會大幅拋售美元資產，以報復美國就人民幣匯率問題向中國實施制裁，引來恐慌。官方新華社其後為傳聞降溫，但夏斌仍在中央電視台堅持拋售是中央領導的政策選項之一。
《每日電訊報》8月8日以“拋售美國國債：中國新核子武器”為題，引述國務院發展研究中心金融研究所所長夏斌稱，中國政府可能以其龐大的外匯儲備為武器，“對抗”美國就人民幣升值問題的制裁行動。
一石激起千重浪，該則新聞當日就成為該報網絡點襲率最高的新聞，又獲全球通訊社引述。報道震驚美國政經界，美國總統布什及民主黨總統候選人希拉利均向傳媒作出了回應，兩人均表示不相信這是北京的官方政策。碰巧8月9、10兩天美國股市受次按危機影響大跌，拖累全球股市出現股災，美國歐洲央行需向銀行注資，使得中國或拋售美元的消息更受國際關注。
財經界估計中國1.3兆美元的外匯儲備中，有約七成即約9000億為美元資產，若北京大幅拋售，定會令美元大幅貶值，經濟可能陷入衰退，其他國家幾乎肯定受到影響。
中國官方新華社8月12日發放人民銀行負責人的回應，試圖為拋售傳聞降溫。 但該官員並未明確否認拋售，只說：“美元在國際貨幣體系中佔有重要的地位，美國金融市場容量大、流動性高，包括美國政府債券在內的美元資產，是我國外匯儲備投資的重要組成部分。”
更有趣的是，中央電視台同一天披露夏斌承認將拋售美元資產作為經濟談判的籌碼的確由他提出，並表示這建議是針對美國貿易保護主義者的。中央電視台指夏斌今年4月就完成了包括這建議的報告，該報告已交中央領導人，作為他們的決策參考。
值得注意的是，中國的官方口徑一向具有超強的凌駕性，官方口徑一出，誰也不會逾越。今次新華社引述的央行官員的言論雖有助降溫，但未有明確否認拋售，似有意留一手。另有分析認為，夏斌作為政策研究員，在新聞吹得沸沸揚揚時，仍站出來堅持自己意見，背後似有中央領導在支撐，繼續為拋售美元“出口術”，以保留這政策的有效性，作為日後談判的籌碼。
過去幾年以來，美國要求人民幣大幅升值以改善貿易失衡的呼聲愈演愈烈，美國參議院財委會7月26日通過向中國匯率制度實施懲罰的法案，參議院銀行委員會也提出了一個競爭性法案，允許美國向匯率偏差國施行反補貼懲罰性措施，另有幾個類似法案在國會等待投票表決。
其實，解決中美貿易失衡的最佳辦法是兩國都作出努力，美國應該抑制國內居民消費和政府支出的增長，中國則應刺激國內消費並實施本國貨幣升值，這樣的調整方式對兩國資本市場和經濟的負面衝擊較為輕微。中國願意讓人民幣升值，但堅持幅度須循序漸進，美國一直認為人民幣升值過慢，是貿易失衡無法改善的最大原因。
嚴格來說，中國大幅拋售美元資產是解決失衡的一個方法，拋售可導致美元大幅貶值，使中國貨品價格相對大幅上漲，最終縮小中美的貿易逆差。但這做法後果嚴重，可謂“玉石俱焚”，因為美元大幅貶值會造成中國外匯儲備嚴重縮水；另外，若美元貶值過劇，可引致美國經濟衰退，由於美國是中國的最大出口市場，這將拖慢中國的經濟增長，引致失業率上升。
從實際的政策考慮而言，大幅拋售美元對北京而言並非一項明智的選擇，財經界一般相信北京不會這樣做。但面對美國政客排山倒海的壓力，北京似乎樂意繼續為拋售“出口術”，使美國政客得知中美其實在金融問題上同坐一條船，美國越是強硬要求人民幣升值，中國越有壓力拋售美元，最後只會兩敗俱傷，甚至沒有第三者得益。
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http://blog.roodo.com/shifting/archives/3899939.html
英國每日電訊報8日報導，中國政府已採取一連串針對美國經濟威脅的行動，暗示一旦華盛頓採取懲罰手段迫使人民幣升值，北京將大筆拋售手中持有的近兆美元美國財政部公債。
報導中說，兩名中國智庫高層人士在最近一連串的訪談中首次警告，北京可能會運用手中1兆美元以上的外匯存底作為政治武器，對抗美國國會制裁行動。這項外匯武器被中國官方媒體形容是「核子選項」(nuclear option)。報導並說，中國政策的變化經常由主要的智庫和學界宣布。
如果北京真的拋售美國公債，可能引發早就走跌的美元崩潰，也將造成美國債券收益短期上升，傷害美國房市，並可能引起美國經濟進入蕭條。據估計，中國擁有超過9000億美元的美國各類債券。
地位相當於部會級的中國國務院發展研究中心財務主任夏斌上周率先指出，發表顯然是政府政策的評論指出，北京的外匯儲備，應被用作與美國談判的「討價還價的棋子」。
中國社科院國際金融研究中心副主任何帆7日進一步對中國日報說，要讓人人知道北京有能力讓美元崩潰。他說：「中國累積了大量的美元，其中大部分是美國財政部長期債券，只要人民幣兌美元的匯率維持穩定，中國就不可能這樣做，一旦人民幣大幅升值，中國中央銀行將被迫出售美元，將導致美元大幅貶值。」
美國國會正準備開始夏季休會，這種說法在此一時機提出，顯然是要給國會發出政治威脅訊號。
========================
策略有很多種：一種是拿來用的，一種是拿來嚇的。把拿來用的策略和拿來嚇人的策略搞混，通常就會在談判桌上輸掉。
基本上這個論述非常有趣，我也從很久以前就聽過了。很明顯的，這是一個不可能成形的策略，也就是嚇嚇人罷了。為什麼呢？基本上，策略的預測不只是考慮到對方怎麼反應你的出手，更重要的是對方反應了你的出手後導致你必要承擔的成本（後果）是什麼？
很簡單的，想兩個問題就好。你覺得拋售美元導致美國經濟蕭條，美元大幅貶值。美元貶值會導致美國境內，進口品變貴，本土品變成相對便宜，受到最大傷害是美國嗎？還是專門賣東西給美國的中國？
美國現在還是世界經濟的龍頭，美國經濟大規模衰退，你覺得其他國家可以倖免嗎？如果不能，引起一連串的全球大規模經濟衰退，你覺得美國的經濟體質比較挺不住？還是中國的經濟體質比較挺不住？美國的政經制度比較容易崩潰？還是中國的政經制度比較容易崩潰？
如果答案都是中國可能會比較慘，那你為什麼覺得這個策略有可能被中國自己執行呢？
（聯合報也真是幹奴才幹得很賣力，主子不過嚇唬嚇唬美國，奴才們倒是一個個都樂起來了。）
========================
連我們小布希，都可以輕易看出這策略的可笑之處，真不知這些記者是混什麼飯吃的？
美中匯率大戰
布希：北京愚勇會傷己
【聯合晚報╱編譯彭淮棟/綜合報導】 針對英「電訊報」報導中國可能拋售美國資產來報復美國的貿易制裁，美國總統布希表示，北京如果這麼做，將是「愚勇」，因為中共自己受害將比美國還大。
布希接受「福斯新聞網」訪問時說，他還沒讀到那篇報導，但警告北京慎勿利用其巨大的外匯存底來打擊美國。 布希說：「假如那是中國政府的立場，這麼做未免有勇無謀(foolhardy)。」他並表示，對於報導說是根據中共國家主席胡錦濤辦公室消息人士而來，他有所懷疑。
記者請教布希，搞垮美元並造成美國經濟衰退，中國受傷是不是甚於美國，布希說：「絕對會。」
布希表示，美中「有非常複雜的貿易關係」，雙方可以「和善」解決歧異，而不是北京整倒美元，也不是美國國會立法制裁中國。
美國財政部長鮑森也出面，在有線電視財經台CNBC表示，暗示中國拋售美元債券以打擊美元，是「荒謬」之舉。 鮑森指出：「我們關係緊張，也必須處理這些緊張。但是整體而言，我們兩國都致力培養建設性的經濟關係。」鮑森上周才到北京與中國領袖會談人民幣升值的事。
2007年9月1日星期六
國際儲備體系的缺失
每年，世界各國都會保留一筆儲備資金做為因應各種偶發事故（例如外國債權人對該國的觀感急轉直下，或是出口商品價格突然崩盤）的保險措施。貧窮國家被迫保留金額可觀的儲備金，其形式為低利率的美國政府公債（有時候是歐元債券）。這些投資的報酬遠低於將這筆錢運用於教育、健康、基礎設施或工廠這些需求孔急的投資。
美國因開發中國家提供的低利貸款而獲益，這又是一例；但是，美國的利益卻是犧牲貧窮國家而來。儲備金的金額相當高，全球儲備金總額現在已超過兩兆美元，而且其中一大部分是開發中國家的儲備金。
在美國與國際貨幣基金的施壓下，開發中國家解除了對外舉債的限制，美國的獲益也隨之擴大，但是美國的獲益方式可能會抑制貧窮國家的成長。試想，若某窮國的某公司向美國一家銀行借貸一億美元的短期貸款；該國明白美國銀行可以隨時要求該公司償還負債，拒絕展期（通常這家美國銀行不會坐視該公司倒債，而是向該國政府施壓，要求若干補救措施）。
金融市場會查看，該國是否保留足夠的美元儲備金，以償還政府與企業的短期美元債務。儲備金不足時，金融市場很可能會出現恐慌。各國政府深知這點而採用審慎標準，當民間企業借貸更多美元，政府也會增加儲備金。
同理，在上述例子中，政府就必須提撥一億美元的儲備金。整體來看，就淨資金而言，該國其實一無所獲。該國可能必須支付1800萬美元的利息給美國，但是從儲備金回收的利息可能卻不到二百萬美元。這種情況或許對美國的經濟成長有所助益，或許對美國的財政狀況也有所助益，但它必定對開發中國家有害。
此外，這些國際約定隱含通貸緊縮傾向，壓制全球所得水準。儲備金必須與進口和外債同步成長，並隨風險增加而調高金額，每年提撥金額都介於1000～2000億美元之間。這些儲備金都是無法支出的所得。
此外，這個體系有其固有的不穩定性：國際貨幣基金（以及其他組織）不斷警告世界各國留意貿易逆差。但是，全球貿易逆差總額必定等於貿易順差總額；如果某國的進口總值大於出口總值，必定有某一國的出口總值大於進口總值。如果少數國家（例如日本與中國大陸）堅持貿易順差，那麼世界上其他國家必定會出現貿易逆差。如果若干國家減少貿易逆差（例如1997年金融危機後的南韓），減少的貿易逆差必定會反映在全球體系裡的某個地方。
貿易逆差就像燙手山芋。當一國出現巨額貿易逆差，它就面臨危機。就這方面而言，貿易順差國及負債國對貿易逆差都有責任。
這個體系得以運作的唯一一項因素就是，美國這個全球最富裕的國家已經成為「貿易逆差的最後棲身處」。其他國家努力消除貿易逆差時，日本與中國大陸持續出現巨額貿易順差時，美國卻願意而且有能力承受巨額貿易逆差，以保持全球貿易方程式的平衡。這是最大的諷刺。
金融體系讓美國年復一年寅吃卯糧，可是美國財政部卻年復一年教導其他國家，為什麼它們不能入不敷出。而美國從現行體系得到的好處當然遠超過美國援外的總值。這是多麼奇怪的世界，事實上是窮國在援助最富有的國家，同時這個富國正好是全球最吝於提供援助的國家之一；以國家總收入的百分比而言，美國的援助遠遠比不上歐洲與日本。
由於全球儲備金體系中的這些缺陷，由於徵兆顯示，某個環節很不對勁，由於全球金融體系漸漸成形，很顯然地，我們需要進行若干重大變革：只是修補邊邊角角是不夠的。
令人遺憾的是我們並未看到根本的改革。確實，我們幾乎沒有討論到任何根本問題（包括全球儲備金體系，或是民間市場控管風險不當）。值得注意的是，我們對於直接擺在眼前的問題幾乎未採取任何行動。資本市場自由化顯然是眾多國家問題的直接成因，然而，不令人意外的是，探討這個問題已成為禁忌。
美國因開發中國家提供的低利貸款而獲益，這又是一例；但是，美國的利益卻是犧牲貧窮國家而來。儲備金的金額相當高，全球儲備金總額現在已超過兩兆美元，而且其中一大部分是開發中國家的儲備金。
在美國與國際貨幣基金的施壓下，開發中國家解除了對外舉債的限制，美國的獲益也隨之擴大，但是美國的獲益方式可能會抑制貧窮國家的成長。試想，若某窮國的某公司向美國一家銀行借貸一億美元的短期貸款；該國明白美國銀行可以隨時要求該公司償還負債，拒絕展期（通常這家美國銀行不會坐視該公司倒債，而是向該國政府施壓，要求若干補救措施）。
金融市場會查看，該國是否保留足夠的美元儲備金，以償還政府與企業的短期美元債務。儲備金不足時，金融市場很可能會出現恐慌。各國政府深知這點而採用審慎標準，當民間企業借貸更多美元，政府也會增加儲備金。
同理，在上述例子中，政府就必須提撥一億美元的儲備金。整體來看，就淨資金而言，該國其實一無所獲。該國可能必須支付1800萬美元的利息給美國，但是從儲備金回收的利息可能卻不到二百萬美元。這種情況或許對美國的經濟成長有所助益，或許對美國的財政狀況也有所助益，但它必定對開發中國家有害。
此外，這些國際約定隱含通貸緊縮傾向，壓制全球所得水準。儲備金必須與進口和外債同步成長，並隨風險增加而調高金額，每年提撥金額都介於1000～2000億美元之間。這些儲備金都是無法支出的所得。
此外，這個體系有其固有的不穩定性：國際貨幣基金（以及其他組織）不斷警告世界各國留意貿易逆差。但是，全球貿易逆差總額必定等於貿易順差總額；如果某國的進口總值大於出口總值，必定有某一國的出口總值大於進口總值。如果少數國家（例如日本與中國大陸）堅持貿易順差，那麼世界上其他國家必定會出現貿易逆差。如果若干國家減少貿易逆差（例如1997年金融危機後的南韓），減少的貿易逆差必定會反映在全球體系裡的某個地方。
貿易逆差就像燙手山芋。當一國出現巨額貿易逆差，它就面臨危機。就這方面而言，貿易順差國及負債國對貿易逆差都有責任。
這個體系得以運作的唯一一項因素就是，美國這個全球最富裕的國家已經成為「貿易逆差的最後棲身處」。其他國家努力消除貿易逆差時，日本與中國大陸持續出現巨額貿易順差時，美國卻願意而且有能力承受巨額貿易逆差，以保持全球貿易方程式的平衡。這是最大的諷刺。
金融體系讓美國年復一年寅吃卯糧，可是美國財政部卻年復一年教導其他國家，為什麼它們不能入不敷出。而美國從現行體系得到的好處當然遠超過美國援外的總值。這是多麼奇怪的世界，事實上是窮國在援助最富有的國家，同時這個富國正好是全球最吝於提供援助的國家之一；以國家總收入的百分比而言，美國的援助遠遠比不上歐洲與日本。
由於全球儲備金體系中的這些缺陷，由於徵兆顯示，某個環節很不對勁，由於全球金融體系漸漸成形，很顯然地，我們需要進行若干重大變革：只是修補邊邊角角是不夠的。
令人遺憾的是我們並未看到根本的改革。確實，我們幾乎沒有討論到任何根本問題（包括全球儲備金體系，或是民間市場控管風險不當）。值得注意的是，我們對於直接擺在眼前的問題幾乎未採取任何行動。資本市場自由化顯然是眾多國家問題的直接成因，然而，不令人意外的是，探討這個問題已成為禁忌。
2007年8月27日星期一
書中自有黃金屋 My Rocommended Reading List
Seth Klarman
Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor
曹任超
Warren Buffett
Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor
曹任超
- 論 勢
- 論 戰
- 論 性
Warren Buffett
- The New Buffettology by Mary Buffett and David Clark (與巴菲特同步買進)
- The Essential Buffett by Robert Hagstrom (巴菲特的新主張)
- How to Pick Stocks Like Warren Buffett by Timothy Vick (巴菲特如何選擇成長股）
- 《巴菲特的八堂投資課》 劉建位編著
- Warren Buffett on the Stock Market
Philip Fisher
- Common Stocks and Uncommon Profits (非常潛力股）
Peter Lynch
- One up on Wall Street (彼得林區選股戰略)
- Beating the Street (征服股海)
Benjamin Graham
- The Intelligent Investor (智慧型股票投資人)
- Security Analysis (證券分析)
Charlie Munger
- Poor Charlie's Almanack
- Damn Right by Janet Lowe (投資奇才曼格)
Money, Political Economics & Misc
- The Mystery of Banking by Murray Rothbard
- Jude Wanniski on Money
- Gold and Economic Freedom by Alan Greenspan
- 《一個投機者的告白》作者：Andre Kostolany
- 《貨幣戰爭》作者：宋鴻兵
- 《一個經濟殺手的自白》作者：John Perkins
- 《血戰華爾街 F.I.A.S.C.O.》aka《誠信的背後》作者：Frank Partnoy
- 《黑天鵝》作者：Nassim Taleb
- The Promise and Peril of Credit Derivatives by Frank Partnoy and David Skeel
- The Five Rules for Successful Stock Investing by Pat Dorsey (股市真規則)
- Behavioral Finance and Wealth Management: How to Build Optimal Portfolios that Accounts for Investor Biases by Michael Pompian
2007年8月22日星期三
Greatest Quote of the Day
"If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them, will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered."
Thomas Jefferson
2007年8月18日星期六
2007年8月16日星期四
Carry Trade and a New Form of Financial Turbulence
At the end of February, global stock markets registered the largest decline since the 9-11 Incident. Just a decade ago in February 1997, international speculators began selling the Thai Baht, and gradually led to the Asian Financial Turmoil - a major incident in 20th century world economic history. It is worthy to compare the recent market turbulence with the past.
http://www.tdctrade.com/econforum/boc/boc070401.htm
http://www.tdctrade.com/econforum/boc/boc070401.htm
2007年8月13日星期一
今日佳句
事情往往就是這樣，當你不打算大賺時，幸運反而來敲門。
http://finance.sina.com.cn/money/lczx/20070813/02403874804.shtml
違反規則所付出的代價的多少，決定著規則被人敬畏的程度。如果規則本身就是“疲軟”的，違規者需要付出的成本很低而收益卻很大，強勢者就敢於衝破規則的底線。一旦人們爭相突破規則的限制，就很容易形成法不責眾的混亂狀況，最終導致規則本身被廢掉。
http://sy.focus.cn/news/2006-06-30/218481.html
http://finance.sina.com.cn/money/lczx/20070813/02403874804.shtml
違反規則所付出的代價的多少，決定著規則被人敬畏的程度。如果規則本身就是“疲軟”的，違規者需要付出的成本很低而收益卻很大，強勢者就敢於衝破規則的底線。一旦人們爭相突破規則的限制，就很容易形成法不責眾的混亂狀況，最終導致規則本身被廢掉。
http://sy.focus.cn/news/2006-06-30/218481.html
房地產遊戲的公開秘密：銀行一手托買賣兩家
這裏有一個公開秘密，一個關於中國房地產遊戲中的你知我知天知地知的暗語。那就是銀行於房地產業是一手托兩家：一邊給房地產開發商貸款，讓他們蓋房多多地蓋房，另一方面又給購房者按揭，讓他們買房買了再買。它們成為了供給的創造者，同時又是需求的創造者。那末，整個房地產的供給與需求大抵都由商業銀行出錢打造的，房地產市場就是它們自己導演的一場鬧劇。最近，有網友將中國特色的這種現象稱之為“狗咬自己尾巴”遊戲，算是入木三分。
2007年8月7日星期二
投資六部曲
1. 選股原則以公司擁有持續競爭優勢，或擁有高於賬面值之資產為大前提。（參考 The Essential Buffett, The New Buffettology 及 One Up on Wall Street。）
2. 所支付之價格相對於估值範圍，必須存在足夠的安全空間，以避免買價過高。（參考 How to Pick Stocks Like Warren Buffett 的數學例子。）
3. 資金分配於各資產的比例多寡，以保留靈活性為原則，並且避免孤注一擲。（參考 The Essential Buffett。）
4. 遠離市場干擾，然後耐心等待低買時機的來臨。
5. 下單前，請重溫所有投資箴言一遍，以減少犯上低級錯誤。
6. 長期持有，而且避免以賬面盈虧作為賣出指標。
2. 所支付之價格相對於估值範圍，必須存在足夠的安全空間，以避免買價過高。（參考 How to Pick Stocks Like Warren Buffett 的數學例子。）
3. 資金分配於各資產的比例多寡，以保留靈活性為原則，並且避免孤注一擲。（參考 The Essential Buffett。）
4. 遠離市場干擾，然後耐心等待低買時機的來臨。
5. 下單前，請重溫所有投資箴言一遍，以減少犯上低級錯誤。
6. 長期持有，而且避免以賬面盈虧作為賣出指標。
2007年8月5日星期日
下單前沉思兩分鐘
- 弄清楚自己所研究的公司股票屬於哪一種類型：緩慢增長型，穩定增長型，快速增長型，周期型，隱藏資產型，困境反轉型。
- 這支股票目前的價位相對於公司將來的發展前景來説是低估還是高估了。
- 盡可能了解公司正如何經營運作，以使公司業務更加繁榮，增長更加強勁。
如果你打算買入的是一家穩定增長型公司的股票，那麼你應該重點關注的因素包括，市盈率是多少？最近幾個月股價是否已經大幅上漲？如果有的話，什麼因素將會推動公司增長速度進一步加快？
如果你打算買入的是一家快速增長型公司的股票，那麽你應該關注的重點是這家公司向哪些市場擴張即如何控制成本，才能繼續快速增長以及如何經營管理才能繼續保持快速增長？公司獲得巨大成功的關鍵在於：通過降低成本和提高價格實現了公司受益的大幅增長。
如果你考慮買入的是一家周期型公司的股票，那麽你應該圍繞公司業務狀況，存貨增減以及銷售價格為中心來思考公司的未來發展。
如果你打算買入的是一家隱藏資產型公司的股票，你應該了解這傢公司隱藏資產是什麼？這些資產的價值是多少？
除了隱藏資產型公司之外，對於其他類型的公司，你必須尋找能夠推動這些公司收益持續增長的動力因素。
如果一家公司最初的經營模式成功，那麼在其他地方進行複製也能同樣獲得成功嗎？
還有，你所支付的價格是否過高？
在下單前進行一兩分鐘的獨白：我之所以對這支股票感興趣的原因是什麼，需要具備哪些調解者傢公司會取得成功，這家公司未來發展面臨哪些障礙。如果你能夠向家人，朋友講述招傢公司未來的發展前景，如果連一個小孩子也能聽懂你的分析，那就表明你已經真正抓住了這家公司發展的關鍵了。
2007年8月2日星期四
你具備股票投資成功所必需的個人素質嗎？Are You Equipped With the Personal Qualities of Successful Stock Investing?
彼得.林奇認爲股票投資成功所必需的個人素質包括：
- 耐心 - Patient
- 自立 - Independent
- 常識 - Common Sense
- 對於痛苦的忍耐力 - Pain Endurant
- 心胸廣闊 - Broad Minded
- 超然 - Aloof
- 堅持不懈 - Persistent
- 謙虛 - Humble
- 靈活 - Flexible
- 願意獨立研究 - Willing to Research Independently
- 能夠主動承認錯誤 - Accept Errors Proactively
- 能夠在市場普遍性恐慌之中不受影響，並且保持冷靜的能力。Remain calm during market panic.
人類内在的本性讓投資者的情緒成了股市的晴雨表。這些一點也不謹慎小心的投資者不斷地再三種情緒之間變化：擔心害怕，洋洋自得，灰心喪氣。在股市下跌後或者經濟看來停滯的時候，這些股票投資者就會變得對股市非常關注，由於過於擔心股市進一步下跌以至於他們沒有膽量乘機以低價買入好公司的股票；在股市開始上漲時，他們以較高的價格追漲買入股票。他們的股票也會隨著股市上漲而上漲，於是他們就開始洋洋自得起來，而其實這時候他們更應該對公司的基本面給予充分的關注，但是他們卻並沒有這樣做。最後，他們的股票不斷下跌知道跌至他們的買價以下時，他們開始灰心喪氣，決定放棄投降，慌張地就把股票以低價賣掉了。
一些人自詡為“長期投資者”，但是一旦股市大跌（或者是稍稍上漲），他們馬上就從“長期投資”變成了短期投資，在股市大跌時寧願損失極大也會恐慌性全部抛出，或者偶爾能夠得到一點點小利時也迫不及待地將股票全部抛出。在波動不定的股市中，投資者很容易陷入恐慌。
投資的竅門不是要學會相信自己内心的感覺，而是要約束自己不去理會内心的感覺。只要公司的基本面沒有什麼根本的變化，就一直持有你手中的股票。
2007巴非特致股東的信
巴菲特每年寫給股東的信清晰、流暢，充滿睿智和幽默，已成為世界傑出投資經理和優秀CEO的必讀經典。在此大盤震盪之際提供給廣大投資朋友們參考。
裏面包括巴菲特對保險業的分析，他說：“最重要的是要記住，追溯保險合同總是會給我們帶來承保損失，值不值得承擔這些損失，取決於我們收到的現金能否產生超過這些損失的投資收益。”
http://www.zhuaxia.com/item/339836428
裏面包括巴菲特對保險業的分析，他說：“最重要的是要記住，追溯保險合同總是會給我們帶來承保損失，值不值得承擔這些損失，取決於我們收到的現金能否產生超過這些損失的投資收益。”
http://www.zhuaxia.com/item/339836428
How to Detect Financial Defects
Despite the accounting irregularities in some listed companies, investors can be forewarned by looking at the company’s liquidity, profitability, management, borrower communications, external environment and strategy.
Q: How can an individual investor without much financial training detect financial irregularities in listed companies?
Investors always depend on financial statements to make investment decisions. Following the recent accounting frauds in a few listed companies, some investors wonder whether they should still take the effort to analyse financial statements, given that those statements may not be true or reflect the real picture of the company.
Nevertheless, we believe financial statements still provide us with the main source of references. Besides, there are other indicators of the company, which can also provide us with certain levels of financial warnings.
According to Charles W. Mulford and Eugene E. Comiskey in their book titled Financial Warnings, there are mainly six types of financial warnings: liquidity, profitability, management, borrower communications, external environment and strategy.
Liquidity
One of the most important types of financial warnings is liquidity. This factor is normally related to the massive expansion of a company’s operation way beyond the control of the company’s management.
In most instances, the company’s internal control fails to provide adequate control on the company’s risk management. Besides, a company that shows a sharp increase in trade debtors or a jump in bank borrowings may imply it has liquidity problems.
Besides financial statements, there are other indicators of a company that can provide investors with certain levels of financial warnings.
Profitability
Retailers always have problems in determining the quality earnings of a company. Sometimes, the reported profits of a company may not reflect its real earnings, as a big portion of the profits were derived from non-operating sources of income, for example, the gain from the disposal of assets, securities or accounting adjustments for net income.
One of the key indicators in this section is gross profit margin as a percentage of sales. We should be checking if there is any deterioration in gross profit margin resulting from price cutting on key products.
Management
Good management will discuss the company’s performance and prospects during analysts’ briefings or in the annual reports.
However, some companies talk freely to investors when things are going well but “clam up” when troubles and disappointment occur.
Investors need to take note of the resignation of key management or change of owners, excessive perks for owners, lifestyle of owners not being consistent with the profitability of the company or the management’s projections of sales and earnings that are well beyond past history.
In Malaysia, we should be alert to events like the disposal of a significant equity interest by the major shareholders, failure to meet earnings projections or pending some material litigation.
Borrower communications
In this section, the two most important indicators are the delay in providing financial statements and changes in accountants or auditors.
We should also be watchful on the change in format of income statement, the change in financial year-end or the provision of only basic financial information without much detail on certain key important items.
External environment
A good management should be able to perform well during the good as well as bad times.
Investors need to be watchful for changes in external environments like the increase in interest rates, changes in regulations, new competition or new technologies in the industry.
Strategy
Financial warning on strategy mainly refers to the expansion into unrelated businesses or a fundamental change in business direction.
In Malaysia, some second board companies incurred high losses during 1997/98, which were mainly due to expansion into unrelated businesses like property development activities during 1996.
2007年8月1日星期三
The Hedge Fund Subprime Credit Crunch Explained
The ongoing crisis triggered by the subprime mortgage defaults continues to spiral into new directions, making it difficult for even experienced market watchers to comprehend the complete picture and its implication for the financial markets. Therefore this article attempts to explain the crisis and what it implies for future interest rate trends.
http://www.freebuck.com/articles/nwalayat/070731nwalayat.htm
Making Money the Warren Buffett Way
When an investor amasses $52 billion over half a century, humble stock pickers take note. When he's Warren Buffett, the homespun "Oracle of Omaha," it not only pays to heed his thinking, but it's fun.
http://www.usnews.com/usnews/biztech/personalfinance/personal_investing_buffett/index.htm
http://www.usnews.com/usnews/biztech/personalfinance/personal_investing_buffett/index.htm
2007年7月30日星期一
亞洲金融危機能否使我們更聰明
http://big5.ce.cn/gate/big5/intl.ce.cn/gjjr/zxdt/200707/02/t20070702_12026502.shtml
1997年7月2日，泰國宣佈放棄固定匯率制，實行浮動匯率制，隨之潘多拉之盒被打開了，一場遍及亞洲的金融風暴席捲而來，危機蔓延的速度令人瞠目，直到1999年才逐漸平息。十年過去了，雖然許多重大事件都逐漸湮滅在歷史長河裏，但亞洲金融危機卻始終是刻在亞洲人心中的一道傷痕。從危機中走出的亞洲國家，也在痛定思痛，努力通過改革來消除下一次危機的可能性。
雖然由於特殊的經濟金融體制，中國並沒有陷於危機的痛苦，但同樣遭受了較大的外部衝擊。同時，在受影響較大的國家身上，通過對危機動因的觀察，我們也找到了很多自身的影子。問題是：現在我們能否真正吸取教訓，避免一次真正的金融危機？
隨著人民幣國際化的推進與資本市場的不斷開放，這成為我們所面臨最大的外部不確定因素。從國內來看，在對亞洲金融危機的反思中，仍然有幾個重要問題沒有清楚了解，或許才是威脅金融安全的達摩克裏斯之劍。
首先，面對日趨複雜的現代金融市場，怎樣才能穩定市場預期與信心？金融市場魅力的本源在於風險，隨著金融市場的深度和廣度不斷拓展，風險波動的不確定性更大。金融市場穩定，除了要有良好的監管、健全的市場基礎設施、成熟的金融技術之外，還要有相對穩定的市場預期，並且不破壞微觀主體的信心。因為，市場預期的變化會對資金流動產生重大影響，如在亞洲金融危機中受損最大的五國，1996年私人資本凈流入為729億美元，1997年凈流出為110億美元，造成的後果不言而喻。應該說，直到1997年擴大內需開始，中國政府才嘗試現代意義的宏觀政策調控，政策制定與實施還缺乏藝術。無論是先前貨幣政策刻意追求“出乎意料”，還是最近印花稅調整中前後傳遞資訊矛盾的無心之失，都會嚴重損害市場預期的穩定，最終結果是破壞金融市場的遊戲規則。
筆者認為，金融活動本質上是建立在人們對未來的樂觀態度基礎上，信心則是維繫金融市場運行的無形基礎，一旦非理性預期積累到使人們喪失參與金融遊戲的信心，則市場崩潰和危機蔓延會超出所有人的想像。從此意義上講，成熟的政府監管，在於維繫政策模式的特定姿態和可預期性，以此使人們能夠明白市場遊戲規則，從而理性應對各類金融事件的衝擊。
其次，隨著金融創新的加速，我們對伴隨的風險是否胸有成竹？從去年開始，金融產品創新的步伐在我國逐漸加快。無論是公眾熱議的股指期貨，還是ABS、MBS和人民幣期權期貨，都是發揮相對落後的金融資源效率所必需的。從近年來國外CDO產品的發展來看，一個有趣的現象，是各類新型金融工具的誕生，本來是為了管理特定風險，然而複雜金融技術的出現，卻同時帶來了令人難以理解的風險收益結構，產生了更多難以控制的風險。
迄今為止，國內推進金融產品創新的動力，一直是為了應對傳統意義的風險。如人民幣衍生品多是為了應對匯率、利率風險，股指期貨為了應對缺乏做空機制的股市風險。然而，一旦這些產品推出之後，我們所面臨的另一層面風險，就是如何使這些金融工具能發揮風險管理效率，而不被濫用。關於美國橙縣和巴林銀行運用金融衍生工具失敗的例子我們已非常熟悉，但回到我們尚不成熟的金融體系中，如果出現類似事件，危機被放大的可能性更高。對此，無論是監管模式的適應性改革，還是商業銀行及其他金融機構儘快進入角色，都是將來避免金融風險累積的必要條件。
再者，對於國際“熱錢”的衝擊，如何從國家金融安全的高度予以應對？對亞洲金融危機，最得到公認的就是把國際遊資作為罪魁禍首。目前，我們面臨的是極度不穩定的國際貨幣金融體系，以及全球流動性過剩背景下短期資本的聚集。隨著全球金融市場的不斷融合，由於新興經濟體的投資收益率相對較高，包括對衝基金在內的各類機構都有進入獲利的強烈衝動。有了資訊技術的高速發展，以及各國資本市場的不斷開放，投機性遊資必然對新興經濟體金融市場的內在不穩定性推波助瀾。
中國金融市場開放程度是不斷提高的，因此未來被衝擊的可能性也在逐漸增大。今年2月27日全球股市大跌從中國A股市場開始，正如索羅斯所言，“日本長期零利率催生的大量日元套利交易”竟成了A股暴跌的罪魁。在我們習慣於對這些資本神話隔岸觀火的時候，可怕的海外對衝基金卻不知不覺的來到身邊。在5月30日股市暴跌之前，也有對外資機構集體唱空的質疑。雖然筆者並不認為背後有某種陰謀，但這說明瞭問題在於政府監管的缺陷，導致外資基於獲利目的能夠對資本市場穩定產生衝擊。任何資本都有獲利要求，這不是道德問題，關鍵在於政府要基於國家安全的戰略高度開始有所防範，才能避免海外投機資本在將來更加恣意，而損害國內金融市場穩定。
最後，能否建立起社會利益均衡機制，防止政治風險的共同衝擊？穆迪公司近期發表了總結亞洲金融危機的報告，指出人們仍未弄清楚的重要問題之一，是對政治風險的認識不足。脆弱的金融體系，加上潛在的政治危機，往往會給一國帶來噩夢般的境遇。在亞洲金融危機中，遭受影響較大的泰國、印尼，其政治風險對危機的助推作用不容忽視。而遭受影響較小的中國香港和新加坡，政治穩定則為其抵禦衝擊提供了定心丸。
當前，國內總體社會形勢穩定，但積累的矛盾和風險也已引起各界廣泛關注。在持續20多年的改革後，富裕階層已經在中國社會中初步形成，但收入分配公平程度卻在惡化。這種情況不根本改變，會使廣大利益受損人群對改革過程中的政府誠信度產生懷疑，將可能抵制市場化進程，甚至引起社會動蕩。假如真的有金融危機爆發，政治社會穩定應成為避免經濟崩潰的最後堡壘。目前困擾我們的，一方面是國內還缺乏社會利益均衡機制，無法實現利益的協調和補償，因此容易積累矛盾。另一方面，政府政策迫切需要向“民生導向”進行轉型。傳統的效率優先的政策目標已經不適應形勢的要求，只有全面轉向民生型政策，建立就業優先、中低階層福利優先等政策目標，才能充分表達現代政府應有的社會正義責任。只有這樣，才能在可能的金融危機中，最大限度地避免對社會穩定的負面影響。
通常來看，人們往往難以認清所處時代的大勢，只有待後人回首，才會一切澄明於心。然而，這並不意味我們無所為，吸取教訓並以理性面對未來，才能避免在同一處跌倒兩次。亞洲金融危機是亞洲共同的經驗和教訓，真正理解其歷史內涵，才能使中國市場化改革與金融深化之路免受重大波折。
1997年7月2日，泰國宣佈放棄固定匯率制，實行浮動匯率制，隨之潘多拉之盒被打開了，一場遍及亞洲的金融風暴席捲而來，危機蔓延的速度令人瞠目，直到1999年才逐漸平息。十年過去了，雖然許多重大事件都逐漸湮滅在歷史長河裏，但亞洲金融危機卻始終是刻在亞洲人心中的一道傷痕。從危機中走出的亞洲國家，也在痛定思痛，努力通過改革來消除下一次危機的可能性。
雖然由於特殊的經濟金融體制，中國並沒有陷於危機的痛苦，但同樣遭受了較大的外部衝擊。同時，在受影響較大的國家身上，通過對危機動因的觀察，我們也找到了很多自身的影子。問題是：現在我們能否真正吸取教訓，避免一次真正的金融危機？
隨著人民幣國際化的推進與資本市場的不斷開放，這成為我們所面臨最大的外部不確定因素。從國內來看，在對亞洲金融危機的反思中，仍然有幾個重要問題沒有清楚了解，或許才是威脅金融安全的達摩克裏斯之劍。
首先，面對日趨複雜的現代金融市場，怎樣才能穩定市場預期與信心？金融市場魅力的本源在於風險，隨著金融市場的深度和廣度不斷拓展，風險波動的不確定性更大。金融市場穩定，除了要有良好的監管、健全的市場基礎設施、成熟的金融技術之外，還要有相對穩定的市場預期，並且不破壞微觀主體的信心。因為，市場預期的變化會對資金流動產生重大影響，如在亞洲金融危機中受損最大的五國，1996年私人資本凈流入為729億美元，1997年凈流出為110億美元，造成的後果不言而喻。應該說，直到1997年擴大內需開始，中國政府才嘗試現代意義的宏觀政策調控，政策制定與實施還缺乏藝術。無論是先前貨幣政策刻意追求“出乎意料”，還是最近印花稅調整中前後傳遞資訊矛盾的無心之失，都會嚴重損害市場預期的穩定，最終結果是破壞金融市場的遊戲規則。
筆者認為，金融活動本質上是建立在人們對未來的樂觀態度基礎上，信心則是維繫金融市場運行的無形基礎，一旦非理性預期積累到使人們喪失參與金融遊戲的信心，則市場崩潰和危機蔓延會超出所有人的想像。從此意義上講，成熟的政府監管，在於維繫政策模式的特定姿態和可預期性，以此使人們能夠明白市場遊戲規則，從而理性應對各類金融事件的衝擊。
其次，隨著金融創新的加速，我們對伴隨的風險是否胸有成竹？從去年開始，金融產品創新的步伐在我國逐漸加快。無論是公眾熱議的股指期貨，還是ABS、MBS和人民幣期權期貨，都是發揮相對落後的金融資源效率所必需的。從近年來國外CDO產品的發展來看，一個有趣的現象，是各類新型金融工具的誕生，本來是為了管理特定風險，然而複雜金融技術的出現，卻同時帶來了令人難以理解的風險收益結構，產生了更多難以控制的風險。
迄今為止，國內推進金融產品創新的動力，一直是為了應對傳統意義的風險。如人民幣衍生品多是為了應對匯率、利率風險，股指期貨為了應對缺乏做空機制的股市風險。然而，一旦這些產品推出之後，我們所面臨的另一層面風險，就是如何使這些金融工具能發揮風險管理效率，而不被濫用。關於美國橙縣和巴林銀行運用金融衍生工具失敗的例子我們已非常熟悉，但回到我們尚不成熟的金融體系中，如果出現類似事件，危機被放大的可能性更高。對此，無論是監管模式的適應性改革，還是商業銀行及其他金融機構儘快進入角色，都是將來避免金融風險累積的必要條件。
再者，對於國際“熱錢”的衝擊，如何從國家金融安全的高度予以應對？對亞洲金融危機，最得到公認的就是把國際遊資作為罪魁禍首。目前，我們面臨的是極度不穩定的國際貨幣金融體系，以及全球流動性過剩背景下短期資本的聚集。隨著全球金融市場的不斷融合，由於新興經濟體的投資收益率相對較高，包括對衝基金在內的各類機構都有進入獲利的強烈衝動。有了資訊技術的高速發展，以及各國資本市場的不斷開放，投機性遊資必然對新興經濟體金融市場的內在不穩定性推波助瀾。
中國金融市場開放程度是不斷提高的，因此未來被衝擊的可能性也在逐漸增大。今年2月27日全球股市大跌從中國A股市場開始，正如索羅斯所言，“日本長期零利率催生的大量日元套利交易”竟成了A股暴跌的罪魁。在我們習慣於對這些資本神話隔岸觀火的時候，可怕的海外對衝基金卻不知不覺的來到身邊。在5月30日股市暴跌之前，也有對外資機構集體唱空的質疑。雖然筆者並不認為背後有某種陰謀，但這說明瞭問題在於政府監管的缺陷，導致外資基於獲利目的能夠對資本市場穩定產生衝擊。任何資本都有獲利要求，這不是道德問題，關鍵在於政府要基於國家安全的戰略高度開始有所防範，才能避免海外投機資本在將來更加恣意，而損害國內金融市場穩定。
最後，能否建立起社會利益均衡機制，防止政治風險的共同衝擊？穆迪公司近期發表了總結亞洲金融危機的報告，指出人們仍未弄清楚的重要問題之一，是對政治風險的認識不足。脆弱的金融體系，加上潛在的政治危機，往往會給一國帶來噩夢般的境遇。在亞洲金融危機中，遭受影響較大的泰國、印尼，其政治風險對危機的助推作用不容忽視。而遭受影響較小的中國香港和新加坡，政治穩定則為其抵禦衝擊提供了定心丸。
當前，國內總體社會形勢穩定，但積累的矛盾和風險也已引起各界廣泛關注。在持續20多年的改革後，富裕階層已經在中國社會中初步形成，但收入分配公平程度卻在惡化。這種情況不根本改變，會使廣大利益受損人群對改革過程中的政府誠信度產生懷疑，將可能抵制市場化進程，甚至引起社會動蕩。假如真的有金融危機爆發，政治社會穩定應成為避免經濟崩潰的最後堡壘。目前困擾我們的，一方面是國內還缺乏社會利益均衡機制，無法實現利益的協調和補償，因此容易積累矛盾。另一方面，政府政策迫切需要向“民生導向”進行轉型。傳統的效率優先的政策目標已經不適應形勢的要求，只有全面轉向民生型政策，建立就業優先、中低階層福利優先等政策目標，才能充分表達現代政府應有的社會正義責任。只有這樣，才能在可能的金融危機中，最大限度地避免對社會穩定的負面影響。
通常來看，人們往往難以認清所處時代的大勢，只有待後人回首，才會一切澄明於心。然而，這並不意味我們無所為，吸取教訓並以理性面對未來，才能避免在同一處跌倒兩次。亞洲金融危機是亞洲共同的經驗和教訓，真正理解其歷史內涵，才能使中國市場化改革與金融深化之路免受重大波折。
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