Warren Buffett MBA Talk – Part 7
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Valuation Matters; Therefore, The Stock Market is Wrong! February 27th, 2009, By ChuckC of TheMarketsUpChuck.com Part 1 of 2 focuses on stock market valuation. Warren Buffett once lamented that For some reason, people take their cues from price action rather than from values. The dumbest reason in the world to buy a stock is because its going up. And Peter Lynch of Fidelity Magellan fame said in his New York Times bestseller One Up on Wall Street Just because you buy a stock and it goes up does not mean you are right. Just because you buy a stock and it goes down does not mean you are wrong. Both of these renowned gurus are acknowledging the undeniable fact that the stock market can often grossly over or under value a company. During the irrational exuberant period of the late 1990s the market was overpricing stocks to the extreme. Today, the stock market is undervaluing stocks to an opposite extreme. As overvaluation was the precursor to horrible long-term results, todays mirror image is the beginning of a great long-term opportunity. Valuation and earnings growth are the true determents of future return. Watch our Frat™ Videx™ for the compelling and undeniable evidence! Ultimately the owners of any company, public or private, will derive their economic reward from the cash flow the underlying business generates or earns. Therefore, determining risk and reward is truly a straightforward and simple exercise. You merely forecast the income you expect and measure it against …
what it takes to be great, the be the best at what you do, to excell, secrets of super performers, by fortune magazine Research now shows that the lack of natural talent is irrelevant to great success. The secret? Painful and demanding practice and hard work By Geoffrey Colvin, senior editor-at-large October 19 2006: 3:14 PM EDT (Fortune Magazine) — What makes Tiger Woods great? What made Berkshire Hathaway (Charts) Chairman Warren Buffett the world’s premier investor? We think we know: Each was a natural who came into the world with a gift for doing exactly what he ended up doing. As Buffett told Fortune not long ago, he was “wired at birth to allocate capital.” It’s a one-in-a-million thing. You’ve got it – or you don’t. Well, folks, it’s not so simple. For one thing, you do not possess a natural gift for a certain job, because targeted natural gifts don’t exist. (Sorry, Warren.) You are not a born CEO or investor or chess grandmaster. You will achieve greatness only through an enormous amount of hard work over many years. And not just any hard work, but work of a particular type that’s demanding and painful.
Part 1: www.youtube.com The One Percent is a 2006 documentary about the growing wealth gap between America’s wealthy elite and the citizenry on the whole. It was created by Jamie Johnson, heir to the Johnson & Johnson fortune, and produced by Jamie Johnson and Nick Kurzon. The film’s title refers to the top one percent of Americans in terms of wealth, who control forty percent or more of the nation’s wealth.