50% Return Method Billionaire Investor Warren Self Help Willingness He can use, you can use!

Learn about Warren Buffett's 50% one-year claim for $ 1 million.

Last week I shared a word from Warren Buffett in a 1999 BusinessWeek article that he announced:

"I think I can make $ 1 million a year

I see a lot of comments about Buffett's famous assertions, but there is not a single attempt to understand the underlying information.

So here's my point of view.

Warren Buffett shared the following quotes in a private conversation with a Columbia University student in 1993:

"When I got the first place at Columbia to go to work, Five brokerage firms, operating in Omaha, subscribe to Moody's industry brochures, banking and finance manuals, and utility brochures. "

" … I found a company called Genesse Valley Gas near Rochester, which has 22,000 shares, which is a public utility with earnings per share of about $ 5. 5 US dollars per share price to buy it. "

" … I found Western Insurance in Costa Fort, Kansas, and the price range for the Moody's Financial Handbook is $ 12- $ 20. Earnings per share are $ 16. I published an advertisement in the Ford Scott paper to buy the stock. "

" … I found the Union Street Railway Company in New Bedford when it was priced at about $ 45 and as far as I know it now has $ 120 in cash, .

First, let us know about Warren Buffett's Genesse, West Insurance and Union Street buying context:

* Buffett was born in 1930 Year, at the age of 18 to enter the university

* He will graduate in 1952, and so on.

* Therefore, he will start working in the 1950s on "operating five brokerage firms in Omaha".

* I think Buffett bought stocks around 1953 or so.

* He started the Buffett partnership in 1956

* I think the years are right – they are all from memory. May be a year or two, but very close.

The only real point I'm trying to build is that these purchases may be in the mid-1950s to late.

This afternoon, I re-read Buffett's letter of partnership. Here are some interesting points that help explain 50% of the claims:

* Buffett's first recorded incarnation of the "Forever Buy and Hold" concept comes from his letter to the partner Dates

When I deal with people I like, in business I find the stimulus (what not?) And get a valuable total return on capital (such as 10-12%), it looks stupid from the situation until the situation a few percent again. I think it is unwise to communicate with a higher level of personal relationships that are known to be pleasantly rewarding at a substantial rate of return, possibly stimulating, aggravating or possibly worse.

Accordingly, we will continue to retain part of the capital (but not more than 40%, as the nature of our partnership agreement may create liquidity requirements) to invest in controlled operations below the aggressive stock market operations inherent of.

Several points to emphasize:

1. Buffett made his 50% annual return statement on his situation in the 1950s

2. The above "buy forever" Of the offer is from 1968, at least in the investment era after a decade of reference to the 1999 Business Week claims.

3. Buffett's investment style is likely to be influenced by Graham's "quantitative" style when he discusses the three investments discussed in the Colombian student lecture. ("Qualitative" effects from Munger and Fisher were around the 1970s)

Also, investment from the 1950s was in very small stocks.
I run the following calculation on the Inflation Calculator

* The cap on the inflation-adjusted Genesse Valley [$ 110,000] is now $ 755,745. * Coca-Cola, American Express, Gillette, Jeko: These investments are really not part of Buffett's "secret", earning 50% a year.


* Conversely, the concept of "Forever Buy and Hold" is a logical progression (in my opinion, at least …) Investment ideology, the basic necessity of possible implementation, because Buffett's management of assets to a point, this micro-hat situation "will not move the needle," quoted Mohnish Pabrai phrases.

And, finally:
Buffett instinctively instinctively applies the pure Grahamian method to achieve his assurance.

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