Buffett 4 great successful secret of success

The editor has a word to say

4 recipe with successful investment of Ba Fei spy are not new perhaps, but commendable is Buffett holds to all the time.

Liu Jian

Mid time of 2011 United States on April 30, · of Bai Kexi Er with a ha drops Wei company sharehold motogp xbox game play er plenary meeting was held in Aomaha 2011, arrived partly at 9 o'clock from in the morning afternoon at 3 o'clock half, rest besides intermediate lunch a hour, buffett answers a query continuously 5 hours. What partner and market pay close attention to most is the manages Suokeer high to be suspected of inside trading problem before the company. But from go up at all for, great majority person from a great distance and come, the mainest purpose or the path that to kiss ear listen respectfully investment of Ba Fei spy succeeds.

The article summed up record of shareholder plenary meeting, the relevant opinion on public affairs in combining Buffett to go to be believed in what send shareholder, induced Buffett chooses a 4 great successful secret of success most popular selling moto gp xbox in the investment that imparted on shareholder plenary meeting 2011.

Hold to safe limit not to shake

Investor: When you invest considering China, because culture and commercial environment and beauty are a lot of more state-owned different, whether can you abide by different principle to perhaps seek different target company?

Buffett: The petrolic in investing when me moment, no matter be,by oil reserve, cash flows still is other any standards will measure, its share price is dog-cheap. Another Russia Petroleum Company as much dog-cheap, I am not expert of politics of what ground fringe, but I feel China invests to be close friends than investing to Russia a lot of. We to other market lacks understanding beyond the United States, we can be made really when investment a few adjust, but invest basic principle to apply to a whole world.

And his lifetime importunate elaborated to invest a principle in the letter that Buffett sent shareholder 1992:

"... we emphasize staying on our buying price have safe limit. The value that if we are calculated,gives a common stock is only summary prep above its price, so we won't be bought. We believe this is planted ' safe limit ' principle -- Ben Geleiemu emphasizes this especially -- the cornerstone that is a success. We believe this is planted ' safe limit ' principle -- Ben Geleiemu emphasizes this especially -- the cornerstone that is a success..

Say in the letter that Buffett sent shareholder 1990: "Be in " clever investor " in in last chapter, ben Geleiemu rejects theory of so called dagger strongly: ' the secret that faces a proper investment condenses the challenge that is 3 words, ground of my make bold puts forward a maxim: Safe limit. ' I had read it already 42 years, up to now I still think safe limit principle is very correct. Investor ignored this very simple investment maxim, bring about them thereby from on 90 time begin the century suffer significant loss. Bring about them thereby from on 90 time begin the century suffer significant loss..

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This is the investment that Buffett imparts chooses a recipe of the first success: Hold to safe limit principle, allow when to await any markets to cannot shake.

Compete continuously the advantage is the most significant

Investor: You ever were mentioned, recommend to you when Suokeerdi when buying company of road gain profit, you are not interested. Hear of the talk circumstance of he and this company CEO later, where moved you? If you do not think this company is a very strong company at the beginning, how was your view changed later?

Buffett: I just felt Lu Borun is a company that I know far from at the beginning. I also did not plan to know chemical industry. What I consider when investment is the a bit most important it is the economic motivation mechanism that I must understand this company to be in an industry (The Economic Dynamics) . In fact, I suggest Suokeer phones a partner to investigate case of manage · awn, the industry that because of me firm of profit of gain of satisfy the need is in does not understand. After talking about this company a few days with awn case, he tells me to say he also cannot understand.

The CEO that alls alone Cole reported he and road gain profit to me later Zhanmusi has a meal after the situation that understands, I just feel I am right the economic motivation mechanism of this industry had a very good understanding, also knew company of profit of gain resembling a road the part with such additive company and Petroleum Company more what kind of than be being acted photograph.

watch casesI conclude: According to market sha usb harddrive enclosure for lap top re computation, firm of road gain profit is ranked inside this i ata pci card ndus moto gp xbox try is the first, and this kind of advantage is to be able to not last for a long time retentive. The product of firm of road gain profit can help engine locomotive time is more smooth and longer, smooth, very important, and use will gain ground more.

And 1999, buffett is in " fortune magazine " publish an article to think: "To investment, the key is not to decide a certain industry has to social consequence how old, or how many will this industry grow, the competitive advantage of a business that should decide any place choose however, and more important is those who determine this kind of dominant position is durative. And more important is those who determine this kind of dominant position is durative..

This is the investment that Buffett imparts chooses the 2nd recipe: The most crucial is to search have compete continuously the preeminent company of the advantage.

Low devoted high yield gives highest effect

Investor: Considering inflation, the what company that Baikexier invests can be done best, what company can be done the poorliest?

Buffett: Expression is best is those place need to throw the company with very small capital. For instance, the chocolate product of 75% above of company of candy happy a poem can be sold with higher price. Performance is the poorest is public utility, for instance Sino-US the sources of energy, won't behave very good, because this in some way is similar to the investment of bond,be, interest rate is fixed.

It is company component in the letter that Buffett sent shareholder 2007 next third class in going up: "Truly great company, can get very tall tangible and investment gain rate, be in any abidance to manage during, need not take the much of profit at all undertake in-house reinvest, in order to keep very high investment gain rate. In order to keep very high investment gain rate..

"Those need add the company of occurrence growth of capital spending ability in great quantities, perhaps be an investment that makes a person satisfied... great majority enterprise and flight company face similar unfavorable situation, cast morely only, ability earn is more. For example, we are large-scale the utility company of the governmental control of investment belongs to this kind of enterprise. We are large-scale the utility company of the governmental control of investment belongs to this kind of enterprise..

"A kind of the worst enterprise is business growth very fast, need throws a large number of capital to support business to grow, but gain is meager do not have profit at all even. Aviation industry is the best selling ata pci the clearest case. Aviation industry is the clearest case..

This is Buffett the investment that impart chooses a recipe of success of the 3rd investment: Seek the efficient profitable machine that low devoted high yield gives.

Forecast should correct and not accurate

Investor: Whether can you forecast company future long-term cash flow? To those very dovish companies, can you still reckon its grow quality?

Buffett: Very important is, growing sex must be " profitable " growing sex. This invests in any decision-making in it is a very main factor. We do not eliminate those growing sexes very slow the company that does not have growing sex even. The company profit that I never see any invests banker to do is forecasted do not grow continuously. I should tell you, company profit always did not grow continuously. We are done with our cerebra forecast, some forecast mode is an analysis our forecast a mistake to may have how serious. But we are not willing to comply with of other one forecast.

This is Bafeiteben the 4th successful recipe that second shareholder plenary meeting imparts: Forecast prospective cash flow not to want correct accurate.

Speak of in the letter that Buffett sent shareholder 1986 in Baikexier how to undertake cash flow forecasts correctly:

"Possessory accrual includes: Report accrual increases cost of depreciation expenses, loss charge, amortize charge and cash of certain and other blame, subtractive company competes for a long time to safeguard its defray waits year of average capital sex that the position uses with specific yield at workshop and equipment a moment. (If this enterprise needs to increase circulating fund to safeguard its,long-term competition position is mixed specific yield, so increase a part to also most popular selling ata pci must include amid. But, if specific yield is changeless, so use junior the company that gives method of valuation of goods in stock first does not need to increase circulating fund normally. ) "

"Because the company competes for a long time to safeguard its defray of year of average capital sex of position and specific yield is sure can be estimation only, and it is a kin moto gp xbox best buy d of estimation that makes extremely hard sometimes, the name that provides in the cash flow meter that so our possessory accrual formula won't produce to weave according to accounting standard is cash flow of deceit to be worth for accurate fact. Although be put in this problem, but it is the investor to buying a share no matter people, the manager of whole to buying still industry people for, we think possessory accrual is numeric, is not a basis flow of cash of accounting standard calculative is numeric, just be the item that as true as appraise value purpose positive involves. We agree with the viewpoint of Keynesia completely: I aux would rather ambiguous correct, also do not want mathematical error. " (the author adds rich fund to run division of conduct financial transactions of company presiding investment to collect)