Source: Tencent self-selected stock

Niuniu knocked on the blackboard:

What kind of person is a good investor? Buffett believes that one of the criteria is the ability to stick to their beliefs, and those who follow the crowd tend to fail; in addition, good investors always look to the future and do not indulge in past successes or past failures.

In February 2015, Buffett shared with a group of MBA students in his hometown of Omaha what he sees as the common ground of good investors, the two best questions to ask when chatting with the management of a company, and what he sees as Mrs. B. To share with you today.

Excellent investors, the first to pursue the right

Q1: how do you select outstanding talents? How to tell if they fit Berkshire's culture?

A: although there are many talents, it is not easy to pick out the right ones for our company. I know a man who can definitely beat the S & P, but this person, who I marry my daughter to, can't marry him.

Therefore, the most basic first rule is that the talents I choose must be recognized by me, whom I am willing to associate with, and who I can be friends and family.

Since such a person can be recognized by me, he must have the advantages I admire and share a common pursuit with me.

Such people, even better than me, are people I hope to emulate.

Such people, I admire their behavior and talent and wisdom, I appreciate their impeccable character, especially hope to become friends with them.

I told them one thing, they can do ten things, they always do better than I expected. When choosing people, you must choose first-rate people.

Q2: how do you define "success"? In your years of investment, has your definition of success changed?

A: as the saying goes: success is the satisfaction of achieving pursuit, and happiness is the contentment of cherishing what you have. Success is about getting what you want, while happiness is about wanting what you get. Personally, I think happiness is more important.

When I was young, I always pursued financial independence. I want to work for myself and for the people I respect. I want to be in charge of the decision-making process.

By the time I was 25, I had earned enough money to make a living. At that time, I had two children, and my money at that time was about the equivalent of 2 million dollars today. Since then, no matter how much I have earned, I can't use it up.

Throughout your life's work, I hope you will always have a scoreboard in your heart to measure whether you are satisfied with your performance and achievements. Don't worry too much about what the world around you think of your achievements. what you should focus on is how you think you're doing.

In terms of return on investment, my personal success is secondary, and Berkshire's success always comes first. I just want you to remember one thing and always try to be a good person.

Q3: what do good investors have in common?

A: one is to stick to your investment philosophy, and the other is not to be swayed by mood swings. Good investors start from the data, and they enjoy investing.

The people who invest well are those who really like to invest. They regard investment as a game, and investment is their favorite game.

Excellent investors, the first pursuit is the right, the second is to make money, the right decision, money followed.

There should be a tenacity in investment. In the face of temptation, in the face of the interference of others, can you still stick to your beliefs? I've seen too many smart people who do stupid things because they follow the crowd.

In addition, good investors always look to the future and do not indulge in past successes or past failures.

You might as well read history and see how many tragic events have taken place in history. We were involved in World War II and fought a civil war. The United States will do it!

Q4: when you were young, you could sit on the bench, settle down and think, and form your own thoughts. In today's ubiquitous ocean of social media and information, students seem to have lost your ability to focus. We prefer tofu block information and can't read tome books.

What do you think of this problem? How does in-depth and independent thinking help you with your investment for decades?

A: the main reason why we are successful today is that we spend a lot of time thinking. Berkshire does not hold any meetings or set up any committees.

I don't know what better way to become a more rational person than to sit down and read. Charlie and I spend most of our time reading every day.

Students taught by efficient market theory suffer, and investors who find value through constant reading take advantage.

From my personal point of view, other people always hold their mobile phones, do not know how to read and think, I have an advantage over others. When others sent messages there to share what they had for breakfast, I read several annual reports and gained some knowledge.

I have seen a lot of changes in my life, especially in the way people use their time.

The chance of falling gold in the sky is about six times in a lifetime.

Q5: how did you seize the opportunity of reverse investment? In addition, what do you think of the risk?

A: with years of experience, we have developed some filtering conditions at Berkshire. When understanding or studying an investment opportunity, as long as there is a filter that filters it out, I will never invest in it. Charlie has similar filtering conditions.

We don't force us to understand a lot of things, we just need to understand something, which is within the scope of our ability circle.

For example, when you visited Nebraska Furniture Mart this morning, when Berkshire acquired the company, its founder, Mrs. B, chose cash over stock because she thought she didn't know anything about stocks.

It's important to know what you can do. In another five years, I don't know which company in the auto industry will be at the top, so I'm not going to pick auto stocks. I prefer to do simple things within my circle of ability.

A good opportunity is the one that screams for you to buy (Good decisions scream at you.) For example, in 2008, when asset prices were cheap, there was no need to be afraid. In your lifetime investment career, this kind of golden opportunity will be encountered about 6 times.

Speaking of risk, we have lost 2% of our portfolio once and 1% twice in Berkshire's history, both in 1974 and 1975, when we sold cheaper assets and bought cheaper ones.

To invest in stocks, if you hold them for a long time, there is no risk, just save the purchasing power of the present and save it for the future. Cash is a risky asset.

In financial theory, risk is measured by beta coefficient, but volatility is not risk, the impairment of purchasing power is risk. The longer the time, the weaker the impact of fluctuations.

The risk of investment still comes from the investor. In our upcoming annual report, I will discuss how to re-recognize risk. Stocks are generally believed to be riskier than bonds, but this is not the case in the long run.

Q6: have you ever made money by copying homework?

A: I prefer to make money by discovering investment opportunities by myself. I prefer to find good companies with reasonable prices.

Investing by picking up cigarette butts can make money, but the investment method of picking up cigarette butts is more efficient when the capital is small and easier to use in the early years. By picking up cigarette butts, there is no way to build a good company and business.

I do not read brokerage reports, many people recommend investment opportunities to me, but I do not take the initiative to ask others what to buy. I am in the circle of my ability.

Berkshire has large assets under management and limited investments it can make. In places where few people pay attention, there are often good opportunities for low prices. For example, I screened the Korean stock market some time ago and found some opportunities worthy of attention.

At that time, I flipped through Moody's Corporation's handbook published in 1951 to look for investment opportunities. Turn to the back, on page 1433, there is a good opportunity. I found Western Insurance Company (Western Insurance), which earns $29 per share, with a stock price as high as $13.

No one told me about this opportunity. I then consulted some insurance brokers and learned about the Western Insurance Company. I found that there was nothing wrong with the company, so I bought its shares.

In short, I prefer to read firsthand company financial reports and consult people in the industry.

Q7: in the process of evaluating a company, are there any questions that investors should ask but often ignore?

A: at the beginning, look at 7-8 companies in an industry, communicate with the management of each company, and ask them general research questions.

In addition, ask the management of each company which competitor they are willing to choose, invest their money and remain unchanged for 10 years. Then ask them which competitors they choose to short.

After asking these two questions, you may know more about the industry than the veterans.

The same is true for personal promotion, and it is recommended that you look at the people around you in this way. Among your friends, who is your role model and who is your negative example?

Think of it this way: which friend do you want to buy, have 10% of its future income, and which friend do you want to short? Think about the advantages of your role models and make them your own. What are the shortcomings of negative examples? get rid of them on your own.

All of you here are young people, and you still have a chance to break your bad habits. "the shackles of habit are too light to be noticed at first, but then too heavy to get rid of. (The chains of habit are too light to be felt until they are too heavy to be broken ".)

Q8: what information do you need to know to value a company?

A: to learn more about a company, you must first understand its industry. Invest only in companies and industries that you can understand, and don't leave your circle of abilities.

You need to know what the company's competitive advantage over its peers is, whether its management is good, and most importantly, whether it has a moat. You don't even know how many competitors there are in a company, so don't invest.

Coca-Cola Company's moat is that Coke has no taste memory and does not get tired of drinking. The moat of the railway company is that the industry is saturated and no one can build a new railway. So, Coke, railway, these two industries, I have invested now.

Q9: you mentioned Mrs. B just now. You also mentioned Mrs. B in last year's annual report. You said that we young students can learn a lot from Mrs. B. what is the most worthwhile thing for us to learn from Mrs. B?

A: please think about it. A woman left the Soviet Union after hardships and set foot on a strange land. She could not speak a word of English. It took her 16 years to save $2500 by selling used clothes, and in the end she set up a mall worth nearly $1 billion.

She has no novel invention, no large amount of money, no professional education, but she has made such a great achievement that she must have something to learn from.

Sam Walton (Sam Walton) is similar to Mrs. B. Sears was in its heyday in the late 1960s, when Sears had 100 stores in Chicago and more than 20 million credit card customers. Sears opened a new store, the land was chosen by it, and the money was so abundant that it could not be used up. Unexpectedly, a small potato with a pickup truck in Arkansas later defeated Sears.

Charlie and I both like to read biographies, and we read biographies with questions, wondering, "Why are these people successful?"Why do these people fail?"

According to my summary, Sears is a typical company that failed because of ABC. A stands for Arrogance (arrogance), B for Bureaucracy (bureaucracy), and C for Complacency (lack of progress).

Sears has made all three mistakes. After making a company bigger and achieving excellent results, we must beware of arrogance, bureaucracy and lack of progress.

What Sam Wharton and Mrs. B have in common is their love of their business. Out of this love, what they pursue is not money at all, but to do their best. Love can unleash great power. You can't do it if you only want money, but you have to go all out for the best.

When we acquire enterprises, we always pay special attention to the managers of enterprises, hoping that after the completion of the acquisition, their love for business will not be reduced at all. We can rest assured to be with such a manager.

More money is debt.

Q10Rom 2013, you said in an article that you are optimistic about the future of the US economy, and you also said that women will make greater contributions to economic development. Can you talk about the role of women in economic development?

Before the 1920s, women and ethnic minorities had not yet participated in the economy, and with only half of the workforce contributing, the per capita GDP of the United States had increased sixfold in decades. If all the labor force is involved, the economy can certainly achieve greater development.

In the past 15 to 20 years, American women have played an increasingly important role.

My sisters are no worse than me and have good personality. they were born at the same time as me, but they don't get the same opportunities and success as I do. In those days, people thought that a girl could find a good family to marry off.

Even today, the status and opportunities of women are still inferior to men. Of Berkshire's 12 directors, only three are women. On March 5, 2015, I will send the sixth message since I opened my Twitter account, which is about female managers.

Q11: what do you think of income inequality?

A: income inequality will become more and more serious. There is something wrong with the statement of income inequality, and we should not pursue equality of income, but should strive to achieve equality of opportunity.

With the development of capitalism, the bottom 10% or 20% will be left farther and farther away. The reason for this phenomenon is that the degree of specialization of society is getting higher and higher.

In the farming era, there was not much income gap between people with an IQ of 150 and those with an IQ of 80. Most people can farm the land. In the era of manufacturing, the degree of specialization has increased, but the income gap is not very large. With the development of the market structure of today's society, people with professional knowledge and skills have gained a significant advantage.

In boxing, for example, before television, the best boxers got about $6000 for a fight. Recently, in the showdown between Manny Manny and Freud Mayweather, the prize money reached hundreds of millions of dollars. The invention of television promoted boxing and generated huge commercial benefits.

Another reason for income inequality is the tax law, which is good for the super-rich. The top 400 earners in the United States pay a tax rate of less than 20%.

In short, the market mechanism can not really solve the problem of income inequality. However, we do not have a better mechanism at present.

Q12: what do you think foreign companies need to learn from American companies?

A: be sure to compete with opponents at a higher level than yourself. The business environment in the United States is the best, as long as it can be done well at home. Although the success of others is dazzling, it is difficult for us to copy it ourselves.

In addition, we should study not only successful cases, but also failure cases. From my personal experience, I was inspired by the process of watching the market with a cold eye.

The financial crisis of 2008 is like a big movie. When the movie is showing, no one knows how it will end.

Q13: you said you would use your wealth for charity and donate your personal wealth to the Gates Foundation and your children's foundation. Is there anything you particularly want to support?

A: I think cyber attacks, nuclear weapons and chemical and biological weapons attacks are the greatest threats facing mankind at present. I particularly want to contribute to solving this problem, but unfortunately I can't find a suitable way.

When I was young, I gave a sum of money and donated it to my wife's foundation. At that time, my wife wanted to donate all our extra money, but I didn't want to lose the power of compound interest. If I donate at that time, I can donate $1 and save it for later. I may be able to donate $1000, so I must keep the compound interest growth.

Let me do charity myself. I can't do it well. So I outsourced philanthropy to five foundations, including Gates' foundation and the foundation set up by my children, who are more enthusiastic than I am in solving the problems facing the world.

Personally, I still hope that the money will not be used to solve small local problems, but to solve big global problems, even if it fails.

Money is of no use to me. I am satisfied that I can spend enough, but money may be of great use to the rest of the world. To me, more money is liabilities than assets.

I am also persuading others to join the Giving Pledge and sign an agreement to donate more than 50 per cent of my personal wealth after death. So far, 127 people have signed the agreement.

A few days ago, Mark Zuckerberg (Zuckerberg) also signed, which is a huge victory for us. Zuckerberg can call on more young billionaires to donate their wealth like him.

Edit / Viola