From: Dehede011@aol.com
Date: Mon Jun 16 2003 - 10:58:03 MDT
In a message dated 6/16/2003 8:44:33 AM Central Standard Time,
rhanson@gmu.edu writes: Maybe Buffet is in fact much more rational than the average trader.
And there are people who win at poker too. But what makes you think you are
another Buffet?
Robin,
Let me compliment you on asking a good question. Your question is
absolutely a real world question for me as I am working to position myself to try
exactly that.
Maybe the question goes this way. I have several elders that played
poker for money. No I don't just mean they gambled I mean they played as semi
pros and they went home with the other fellows money. I noticed they never
played each other except rarely and just for fun. They were looking for suckers
to fleece not sharks to compete with.
In addition I have read Mr. Buffet, and observed my grandfather as
well as an old buddy playing business for money. Mr. Buffet is in stocks, my
friend dealt in small businesses and my grandfather in livestock. All knew at
what price they could purchase their chosen commodity at guarenteed profit --
almost certainly. When someone offered them their price, they would deal.
Certainly those men had failures but all three did extremely well on
the average. In the end I don't regard Mr. Buffet as a stock market investor
although he does buy stocks. It seems his talent is finding really good
profitable businesses that emotional people are willing to sell too cheaply on some
given day.
To me the illuminating question is this: if I do a Buffet type
investigation of a business and its market and end up buy a stock paying $15 annual
dividends like clockwork for $100 per share (that is his criteria for
performance) and that stock goes to $50 per share if I do analysis of the stock only to
discover nothing material has changed should I sell?
Ron h.
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