Investor Education
Chris Bloomstran of Semper Augustus is one of our favorite investors to follow. His Twitter bio reads, "Nothing here is advice. In fact, drop the phone and slowly back away from Twitter. Read a 10-K."
Read our investor education 10-K here!
Swimming
“We try and predict what individual investments will swim well in relation to the tide. We’re emphasizing the knowable by predicting how certain people and companies will swim against the current. We’re not predicting the fluctuation in the current.” ―Charlie Munger
In December 1979, John Train wrote an article for Financial World that profiled a 49-year-old investor named Warren Buffett. While still only about 1/3 into what would be a long, successful, and still ongoing career, Buffett was already well-respected in the industry. As Train writes:
With the death of Benjamin Graham, the Maimonides of portfolio management, his disciple Warren Buffett of Omaha, Nebraska, may have succeeded to the title of the investor’s investor. He disbanded his troupe of less than a hundred clients, collected in a single pool called the Buffett Partnership, before his 40th birthday, to become a solo operator. Though he has written no textbooks, among investment professionals there is no more respected voice.
If you had put $10,000 in Buffett’s original investing partnership at inception in 1956, you would have collected about $300,000 by the time he dissolved it at the end of 1969. He has never had a down year, even in the severe bear markets of 1957, 1862, 1966, and 1969. That achievement stands alone in modern portfolio management.
If you were reading that article in 1979, you might have thought you were too late. Buffett had wound down his partnership and was now just running a company called Berkshire Hathaway that he had taken over in 1965. Berkshire, at the time, had $335.85 in book value per share at the end of 1979, and a share price of about $320 at the end of that year.
Today, each $320 one would have spent to buy a share is worth about $480,000, a compound growth rate of about 18.5%. That is 18.5% per year without making another decision, and without having to pay taxes along the way. It appears that being 23 years late in discovering Warren Buffett wasn’t so bad—if you had gotten on board in 1979.
As we’ve written before, Prediction is Hard. There will be recessions and surprises and Black Swans. Earnings and economies go up and down, and if you had to predict every fluctuation to make money, you’d have an impossible task.
But you don’t have to predict those fluctuations. You just have to predict the companies, management teams, and investment managers that can swim well in changing tides. And often, it’ll be companies and people—like Mr. Buffett in 1979—that have already proven they can do it well.
Tweets of the Week
In Case You Missed it…
The Art and Science of Spending Money - by Morgan Housel
Yet Another Value Blog: Deep Dive #6: The Offshore Inflection, Part #1
Yet Another Value Blog: Deep Dive #6: The Offshore Inflection, Part #2
First Eagle Investments: Global Value Team Annual Letter
Richer, Wiser, Happier Podcast: A Margin Of Safety In Stocks & Life w/ Fred Martin
Founders Podcast: #285 How Jay Gould Built Wall Street's Biggest Fortune
Investing by the Books Podcast: #39 Gregory Zuckerman: The Man Who Solved the Market
Warren Buffett Explains How to Invest in 2023
If you have not already upgraded your membership…
Avenel Financial Group, a merchant banking and advisory firm located in Charlotte, NC, launched a new business venture called the Co/Investor Club. The Co/Investor Club is a community of value-oriented investors that collaborate on investment opportunities and ideas. You are receiving this newsletter because you are a Free or Premium Member of the Co/Investor Club!
Chat with Mike
Whether you’re an executive with investment opportunities or a college student looking to network, we would love to chat with you!Email our Founder, Mike Pruitt, at mp@coinvestorclub.com with questions and ideas or schedule a meeting.
Don’t forget to follow us on social media too!
Twitter: @coinvestorclub1
LinkedIn: Co/Investor Club
For our disclaimer, please visit our website.
Have friends that want to join? The Co/Report is public, so feel free to share!
Thank you for reading. Co/Report grows through word of mouth. Please consider sharing this post with someone who might appreciate it.