Saturday, August 19, 2006

The Guru = Warren Buffett (a.k.a. Sage of Omaha)

With numerous references to The Guru on this blog, I reckon I should give a proper introduction to the person who made this blog's existence a reality. This is really for those who are asking yourselves, "What the heck is Warren Buffett?".

Warren Buffett is not a kind of eat-all-you-can buffet typically charged at $25+++ in Singapore restaurants. Warren Buffett is the world's 2nd richest man and the world's first person to donate 85% of his enormous wealth (which is roughly USD 40bn or 40% of Singapore's GDP) to charity. Imagine the whole of Singapore donating 40% of their salary to NKF.

He is also a practitioner in a style of investing known as Value Investing which has made a handful of people very rich. This is the reason why it is promoted on this blog.

For a detailed biography of Warren Buffett, try googling him or alternatively you can go to this link at Wikipedia on Buffett. No, I am sorry, Warren Buffett does not have a blog. He only tried going online a few days ago to play bridge with other people not living in Omaha, which is somewhere in the middle of nowhere in US.

See also Mr Market
and Margin of Safety


  1. I'm a big fan of Mr. Buffett. He will not only donate 85% of his wealth back to society. He will be in fact giving more than 99% of his wealth back to society. He has indicated that he had already set aside some of his investment which is seperate from his share in Berkshire for his children. He believes in making this society a more balance one by distributing back in a meaningful way instead of giving to his kids which will tilt the already imbalance society even more. Andrew Carnegie says "huge fortune that flows in large part from society should in huge part be returned to society". And Buffett too lives by this motto even before he got rich.

  2. Yeah he certainly is one noble character. Lowest paid CEO in Fortune 500, with salary of $100,000. (Of course his share in Berkshire made up for it.) You would be a shareholder even if he runs a crappy company (Citiraya???).

  3. I think it is important that he does what he enjoys. It's definitely not the money that counts most or much for him. If he were to run a crappy company with crappy accounting practices, he will not be the man that is running BH as how it is being run or even close to the success that BH enjoys today. First of all, it is his value in his private life that guides his public life, living his life in the centre of the field & not cutting any corners. For sure, I would certainly not be an investor even with a person of Warren's ability running Citiraya. Frankly, I certainly do not take things at face value just because of a certain person running it. Btw, I read thru your past article, and you seems certainly to be a staunch value investor, and I find your principles very similar to what I practice. If you could write an article on how to calculate Intrisic value (in a better way than the golden tap eg) by using a discount factor/ interest rate, i would certainly appreciate it.

  4. Hi Berkshire, read your blog, very interesing ideas, we can surely share links if you don't mind.

    Yeah i would like to call myself a value investor, but it is harder to be one. Perhaps I am still trying to find my real investment style.

    Good idea on another article on intrinsic value. I will do that. Just to share a little, I don't really go into difficult stuff like DCF or DDM. For most industry and stocks, I simply take an appropriate P/E multiply by its EPS. Will share more when I find the time!

  5. Definitely, i wouldn't mind to share links. I am here to share my ideas as well as to learn and improve on my fundamentals.

    I agree with you that it is no good to go into difficult stuff. Btw, i do not know what is those DCF, DDM thingy. Investing is meant to easily understood, that is how people can be successful in doing what they do. Simple things are the easiest thing that leads to success.

  6. Your link is up, hope to help you get some traffic there.

    DCF: Discounted Cash Flow, basically the idea is to calculate how much cash flow the firm earns over its lifetime, and use that to determine its intrinsic value today.

    DDM: Dividend Discount Model, similar to DCF, calculate how much dividend the firm will pay over its lifetime and use that to determine its intrinsic value today.

    Will do a posting on that some day.

  7. Thanks! Pls leave me any comments if you have for any of the treads that i put up.