WEB on CNBC Monday with Ted, Todd, and Traci

[VersaillesinNY]

“In my whole life, I have known no wise people who didn't read all the time -- none, zero. You'd be amazed at how much Warren [buffett] reads -- at how much I read. My children laugh at me. They think I'm a book with a couple of legs sticking out".”

 

Charles T. Munger, Poor Charlie's Almanack

 

“Read 500 pages like this every day”-- “That's how knowledge works. It builds up, like compound interest. All of you can do it, but I guarantee not many of you will do it.”

 

Warren E. Buffett

http://www.omaha.com/apps/pbcs.dll/article?AID=/20130428/MONEY/704289987

 

"I’ve read about 80 books a year for the past 50 years. I come from cultural breeding. I don’t have a cellphone. When you spend all your time checking your cellphone messages, or updating your Facebook (of course I don’t have a Facebook page) then you don’t have any time for reading."

 

Vaclav Smil

[wknecht]

The question about putting his widow's money in a Vanguard ETF versus BRK is one I wanted answered. He didn't really answer this question though, so I'm still wondering why he's doing this.

[Guest deepValue]

The question about putting his widow's money in a Vanguard ETF versus BRK is one I wanted answered. He didn't really answer this question though, so I'm still wondering why he's doing this.

 

Because his widow is not able to assess Berkshire's value and Buffett believes it is foolish to own something that you don't understand. It's not that he doesn't think BRK will outperform the S&P 500, he just doesn't think his widow could really know that.

[cubsfan]

The question about putting his widow's money in a Vanguard ETF versus BRK is one I wanted answered. He didn't really answer this question though, so I'm still wondering why he's doing this.

 

I think he did answer this on Monday, when he said it would be self serving to promote Berkshire.

[jay21]

The question about putting his widow's money in a Vanguard ETF versus BRK is one I wanted answered. He didn't really answer this question though, so I'm still wondering why he's doing this.

 

He did.  He said "I'm giving away all my BRK shares to charity" implying that he will not give the shares to the trust. I believe he also said that index funds and BRK are good choices.

[CorpRaider]

I just wonder why he chose the S&P 500 versus a value index or a smaller market cap index.  I guess those are more likely to be high ROIC businesses...

[nkp007]

The question about putting his widow's money in a Vanguard ETF versus BRK is one I wanted answered. He didn't really answer this question though, so I'm still wondering why he's doing this.

 

I think he did answer this on Monday, when he said it would be self serving to promote Berkshire.

 

I love Buffett...but that's a really rich answer.

 

http://www.berkshirehathaway.com/letters/letters.html

 

http://mobile.thegatesnotes.com/Personal/At-the-Berkshire-Hathaway-Annual-Meeting-in-Omaha

 

[oddballstocks]

So if I just read 500 pages a day, drink Coke, eat hamburgers, and buy good companies at great prices I'll be as rich as Buffett right?

 

This is like Michael Jordan saying he warms up by throwing 100 free throws, and some high school player thinking that throwing 100 free throws is what makes him great.

 

I'd argue that it's the synthesis in Buffett's brain that makes any reading he does more valuable that us mere mortals might do.

 

Blindly reading 500 pages because someone said that's what they do is worth less than reading and thinking and considering something thoughtful that might only be 30 pages.

 

The average person reads one page a minute, that's the average, so 500 pages a day of truly reading every single word at an average speed is 8 1/4 hours of reading a day.  I would hope these guys pull their heads out of a book for at least an hour a day to maybe think about what they're reading, instead of just mindlessly plowing through all this material.

 

I get that some of you guys on here are super-human and can somehow read 500 pages by the time they're done with breakfast.  I have trouble reading dense legalese and comprehending it quickly.  Does everyone who reads 500 pages before breakfast also run a 4 minute mile and do 200 pull ups before lunch as well?  This is the Internet, so I understand, we're all skinny and married to supermodels as well.

 

I won't argue that there are probably a lot of members who are just sitting around in big comfy armchairs reading all day straight.  Some of us don't have that luxury.  We have jobs, families, kids, houses to maintain.  If I need to read 500 pages, then sit and think about it for four hours I'm left with barely any time to eat or go to the bathroom before I need to sleep.  Call me crazy, but I'd rather forget the books and enjoy life.

 

Instead of blindly mimicking Buffett et al, why not switch on the brain and think about shortcuts to this.  I would prefer to find a system where I have to read a small amount and have similar results.  I'd rather find a system where I minimized the time I spend for similar results. 

 

I'd love to see some sort of an equation of performance broken down by time spent on an investment.  I personally do this, I have a return on research.  I look at how many hours it takes to research, then my potential gain.  If the potential gain for the amount of research isn't as high as my hourly wage the investment isn't worth it.  I guess the formula breaks down for people managing millions or billions, but it would be cool to see something normalized.

 

Sorry for the rant.  I'm tired of the blind Buffett following.  Maybe he said pages per week, or maybe per day, or maybe per month.  Maybe he's older and doesn't remember perfectly.  The guy's not God.  I have this sense that if he said everyone needed to wear a pink tutu and dance a jig each morning to find great investments we'd see threads about where to find the best tutu deals...

[Guest longinvestor]

I just wonder why he chose the S&P 500 versus a value index or a smaller market cap index.  I guess those are more likely to be high ROIC businesses...

 

What he knows (S&P500, larger companies, 10k's of some /many of which he has likely read over the years) versus what he does not know (1000's of smaller companies)

[oddballstocks]

In other news I think I've found the formula to gain friends online.  Go on the message board and bash the person it's named after....

 

I might have to turn in my value investor certification soon.  I just hope I don't run into any value investors in a dark alley after that.  I can't imagine being hit over the head with the 1968 Moodys manual...

[wknecht]

The question about putting his widow's money in a Vanguard ETF versus BRK is one I wanted answered. He didn't really answer this question though, so I'm still wondering why he's doing this.

 

Because his widow is not able to assess Berkshire's value and Buffett believes it is foolish to own something that you don't understand. It's not that he doesn't think BRK will outperform the S&P 500, he just doesn't think his widow could really know that.

Yes I feel this makes the most sense, though other things he said made me wonder. For example at the AGM he and Munger I thought both mentioned that it would be a mistake for their families to sell their shares. But I guess a mistake from Buffett and Munger's perspective doesn't mean you should not do it anyway based on the particular circumstances.

 

His explicit answer about being self-serving to promote Berkshire didn't make sense to me because I don't see why he couldn't do that quietly instead of announcing it in his Annual Letter / CNBC.

[Guest longinvestor]

So if I just read 500 pages a day, drink Coke, eat hamburgers, and buy good companies at great prices I'll be as rich as Buffett right?

 

This is like Michael Jordan saying he warms up by throwing 100 free throws, and some high school player thinking that throwing 100 free throws is what makes him great.

 

I'd argue that it's the synthesis in Buffett's brain that makes any reading he does more valuable that us mere mortals might do.

 

Blindly reading 500 pages because someone said that's what they do is worth less than reading and thinking and considering something thoughtful that might only be 30 pages.

 

The average person reads one page a minute, that's the average, so 500 pages a day of truly reading every single word at an average speed is 8 1/4 hours of reading a day.  I would hope these guys pull their heads out of a book for at least an hour a day to maybe think about what they're reading, instead of just mindlessly plowing through all this material.

 

I get that some of you guys on here are super-human and can somehow read 500 pages by the time they're done with breakfast.  I have trouble reading dense legalese and comprehending it quickly.  Does everyone who reads 500 pages before breakfast also run a 4 minute mile and do 200 pull ups before lunch as well?  This is the Internet, so I understand, we're all skinny and married to supermodels as well.

 

I won't argue that there are probably a lot of members who are just sitting around in big comfy armchairs reading all day straight.  Some of us don't have that luxury.  We have jobs, families, kids, houses to maintain.  If I need to read 500 pages, then sit and think about it for four hours I'm left with barely any time to eat or go to the bathroom before I need to sleep.  Call me crazy, but I'd rather forget the books and enjoy life.

 

Instead of blindly mimicking Buffett et al, why not switch on the brain and think about shortcuts to this.  I would prefer to find a system where I have to read a small amount and have similar results.  I'd rather find a system where I minimized the time I spend for similar results. 

 

I'd love to see some sort of an equation of performance broken down by time spent on an investment.  I personally do this, I have a return on research.  I look at how many hours it takes to research, then my potential gain.  If the potential gain for the amount of research isn't as high as my hourly wage the investment isn't worth it.  I guess the formula breaks down for people managing millions or billions, but it would be cool to see something normalized.

 

Sorry for the rant.  I'm tired of the blind Buffett following.  Maybe he said pages per week, or maybe per day, or maybe per month.  Maybe he's older and doesn't remember perfectly.  The guy's not God. I have this sense that if he said everyone needed to wear a pink tutu and dance a jig each morning to find great investments we'd see threads about where to find the best tutu deals...

;D Best articulation on this thread.

 

World full of wannabes. The problem I have is when someone starts chest thumping and even start throwing out future prospects of their own investments versus Berkshire. Love hearing bromides like "Investing in BRK and the index are the same thing because BRK is too big"; Or worse, disguised self-promotion "We spend X hours reading complex 10K's and therefore are certain to return 15-20% versus the capped 8-10% of the severely weighed down BRK". I have a nice laugh at this ugly lack of humility. Well, there are fees involved as well. I would never put a penny in the hands of anyone like this. It was interesting to hear how WEB ended up selecting the 3 T's, it was all about their character that "jumped out of the page". Wonder how some of the 1000's who did apply for the roles did not make it!

[slkiel]

Sorry for the rant.  I'm tired of the blind Buffett following.  Maybe he said pages per week, or maybe per day, or maybe per month.  Maybe he's older and doesn't remember perfectly.  The guy's not God.  I have this sense that if he said everyone needed to wear a pink tutu and dance a jig each morning to find great investments we'd see threads about where to find the best tutu deals...

 

Just in case Buffett does mention the pink tutu thing, I think we should be prepared. These are on sale at Berkshire-owned Oriental Trading, though my quick search only turned up child-size: http://www.orientaltrading.com/child-pink-tutu-a2-13616945-12-1.fltr?Ntt=tutus

[Guest longinvestor]

The question about putting his widow's money in a Vanguard ETF versus BRK is one I wanted answered. He didn't really answer this question though, so I'm still wondering why he's doing this.

 

Because his widow is not able to assess Berkshire's value and Buffett believes it is foolish to own something that you don't understand. It's not that he doesn't think BRK will outperform the S&P 500, he just doesn't think his widow could really know that.

Yes I feel this makes the most sense, though other things he said made me wonder. For example at the AGM he and Munger I thought both mentioned that it would be a mistake for their families to sell their shares. But I guess a mistake from Buffett and Munger's perspective doesn't mean you should not do it anyway based on the particular circumstances.

 

His explicit answer about being self-serving to promote Berkshire didn't make sense to me because I don't see why he couldn't do that quietly instead of announcing it in his Annual Letter / CNBC.

 

WEB/CM have been remarkably consistent about each investor making his / her own decision. For his part, he provides full disclosure through his annual report and the AGM that should allow investors to make informed decisions, but no further. Not even for family members. If they go off the deep end, too bad for them. This is so Munger-like!

 

Of course the media is going to spin that  as "even Buffett recommends buying the index versus BRK. Look what he is doing with his estate"

 

 

[Kraven]

So if I just read 500 pages a day, drink Coke, eat hamburgers, and buy good companies at great prices I'll be as rich as Buffett right?

 

This is like Michael Jordan saying he warms up by throwing 100 free throws, and some high school player thinking that throwing 100 free throws is what makes him great.

 

I'd argue that it's the synthesis in Buffett's brain that makes any reading he does more valuable that us mere mortals might do.

 

Blindly reading 500 pages because someone said that's what they do is worth less than reading and thinking and considering something thoughtful that might only be 30 pages.

 

The average person reads one page a minute, that's the average, so 500 pages a day of truly reading every single word at an average speed is 8 1/4 hours of reading a day.  I would hope these guys pull their heads out of a book for at least an hour a day to maybe think about what they're reading, instead of just mindlessly plowing through all this material.

 

I get that some of you guys on here are super-human and can somehow read 500 pages by the time they're done with breakfast.  I have trouble reading dense legalese and comprehending it quickly.  Does everyone who reads 500 pages before breakfast also run a 4 minute mile and do 200 pull ups before lunch as well?  This is the Internet, so I understand, we're all skinny and married to supermodels as well.

 

I won't argue that there are probably a lot of members who are just sitting around in big comfy armchairs reading all day straight.  Some of us don't have that luxury.  We have jobs, families, kids, houses to maintain.  If I need to read 500 pages, then sit and think about it for four hours I'm left with barely any time to eat or go to the bathroom before I need to sleep.  Call me crazy, but I'd rather forget the books and enjoy life.

 

Instead of blindly mimicking Buffett et al, why not switch on the brain and think about shortcuts to this.  I would prefer to find a system where I have to read a small amount and have similar results.  I'd rather find a system where I minimized the time I spend for similar results. 

 

I'd love to see some sort of an equation of performance broken down by time spent on an investment.  I personally do this, I have a return on research.  I look at how many hours it takes to research, then my potential gain.  If the potential gain for the amount of research isn't as high as my hourly wage the investment isn't worth it.  I guess the formula breaks down for people managing millions or billions, but it would be cool to see something normalized.

 

Sorry for the rant.  I'm tired of the blind Buffett following.  Maybe he said pages per week, or maybe per day, or maybe per month.  Maybe he's older and doesn't remember perfectly.  The guy's not God.  I have this sense that if he said everyone needed to wear a pink tutu and dance a jig each morning to find great investments we'd see threads about where to find the best tutu deals...

 

Yes, exactly.  I find it hysterical the cavalier attitude some on this thread have about reading 500 pages a day.  First, like anything anyone says of this nature it isn't meant to be exact.  No one counts their pages per day (well, apparently some do since they think Buffett et al do).  Second, no one, not Buffett not anyone, is reading something like an AIG 10-K in a "few hours".  I just looked, it's well over 300 pages of dense text, numbers, etc.  Maybe it's skimmed and few sections read in detail.  It's impossible to read that cover to cover in a few hours and digest it. 

 

For those who said they believe it includes things like newspapers and the like, I would again call bullshit.  5 newspapers in a couple of hours?  Word for word in every section?  So Buffett is sitting there and reading every word in the Style and Metro sections?  Or is he flipping pages like everyone else does when they "read" a newspaper concentrating on the articles that interest them.

 

A number of people have said this is very doable.  In my view there is reading and then there is reading.  If one means skimming, fine, that's I guess doable in part.  But reading, really reading, is a different animal altogether.  So here is an interesting experiment.  For anyone who claims this is easy, they should be provided with approximately 500 pages of reading.  The types of things that a good value investor should be able to read easily.  Everything from articles to 10-Ks to prospectuses.  They would have 8 hours to read it.  At the end of the 8 hours they would be asked 5 questions that someone who read and understood all 500 pages should be able to answer.  There isn't anyone who could pass that test. 

 

[gurpaul88]

I believe in hindsight being able to comprehend the information is far more important than the quantity read, whether it be 50 or 500 pages.

[bmichaud]

5 newspapers in a couple of hours?  Word for word in every section?

 

Since you are again addressing the entire board, I'm not sure if you are referring to my exact post. Though I believe I was the only one discussing newspapers....

 

I said one could conceive of reading 500 in a day if that included scanning 5 newspapers in a couple of hours. You missed the entire point of my post (again assuming that's what you are addressing), which was 500 is possible if it is not ACTUAL reading as you point out.

 

 

[Kraven]

5 newspapers in a couple of hours?  Word for word in every section?

 

Since you are again addressing the entire board, I'm not sure if you are referring to my exact post. Though I believe I was the only one discussing newspapers....

 

I said one could conceive of reading 500 in a day if that included scanning 5 newspapers in a couple of hours. You missed the entire point of my post (again assuming that's what you are addressing), which was 500 is possible if it is not ACTUAL reading as you point out.

 

I have no idea who posted what.  I skim (and skip) many of the posts and focus on what is interesting to me  . . . just like most people read. 

[Guest longinvestor]

I believe in hindsight being able to comprehend the information is far more important than the quantity read, whether it be 50 or 500 pages.

+1

More important than reading is what you do after reading? Or don't do!  WEB has supposedly made far fewer than 100 meaningful decisions over his lifetime. So most of the time it is read and do-nothing. At least for now. This separates the men from the boys of investing. Ted Weschler said this in the interview. "important not to fall in love with an idea after reading something".

[west]

So if I just read 500 pages a day, drink Coke, eat hamburgers, and buy good companies at great prices I'll be as rich as Buffett right?

 

This is like Michael Jordan saying he warms up by throwing 100 free throws, and some high school player thinking that throwing 100 free throws is what makes him great.

 

I'd argue that it's the synthesis in Buffett's brain that makes any reading he does more valuable that us mere mortals might do.

 

Blindly reading 500 pages because someone said that's what they do is worth less than reading and thinking and considering something thoughtful that might only be 30 pages.

 

Sure, none of us are likely to become the next Buffett.  But, keeping with your basketball analogy, if we want to "play in the big leagues", and not just do this in our spare time but do it professionally, it probably won't hurt to practice the way he says to practice.  Especially when Combs followed his instructions (even though Buffett said most people wouldn't) and it worked out pretty well for him.

 

Also, while 500 pages a day doesn't mean anything by itself of course, it is something to shoot for.  I figure it's better to track this stuff and see improvement, even if you never hit 250 pages per day, than to say "Nah!  I'm never going to hit 500 pages a day!  So there's no reason for me to measure my reading and see if I can improve."

 

Finally, I currently work on investing full time.  Yesterday I read 111 pages of some hardcore, new-to-me, concept material.  This took me about 10 hours.  Maybe I'm a slow reader.

 

Then, at night, I read some stuff that was both easier and that I was already familiar with.  I read twenty pages in twenty minutes, no problem.

 

The point it is, if you're not familiar with something, there's no way you can read 500 pages in a day and understand it all.  However, if you're reading something that you've already read plenty of times before and know what to expect (for example, Oil & Gas Journal, the Wall Street Journal, Retailing Today, etc... you know, the things Buffett allegedly held up during that Columbia lecture where Combs was in the audience) and you have all day to read, and are a little bit obsessed with what you're doing, there's no reason to think you can't read 500 pages of that kind of material in a day.

[reddog66]

Oddball,

 

My prior comment was in poor form and I am confident I need to lighten up.  I agree with you on many points. 

 

One of the your points I agree with the most is establishing a system where someone minimizes the time they spend for similar results. 

 

Which is one reason why I admittedly, read and listen to Buffet and Munger like a brainwashed Kool-Aid drinking Scandinavia canoeist.  Much if not all of my knowledge concerning securities is chauffeur knowledge.  On the very, very rare occasion it is not, I try to go in loaded for bear.    The main way I am able to do this is through lots of reading and some thinking.

 

No hard feelings.

reddog

 

Ps. Would you consider providing any info you might have regarding the rumor of the pink tutu comments and if it is in a transcript somewhere?  I would like to see if there is some truth to it.

 

[Buckeye]

I just finished reading "How to Read a Book: The Classic Guide to Intelligent Reading" of all things and there was one point that really stood out to me.  Apparently if you are reading complicated material or new material it has been shown that you comprehend the material much better and are able obviously able to read faster if you read through any areas you don't understand.  So reading faster and more pages has been shown to be more beneficial than slowing down and really drilling into specifics.  Evidently you will pick up some of the concepts later in the reading.

 

Maybe there is something to trying to read a lot of pages per week that pushes you through certain roadblocks that can cause people to get hung up on new terms or concepts.

[Guest deepValue]

I just finished reading "How to Read a Book: The Classic Guide to Intelligent Reading" of all things and there was one point that really stood out to me.  Apparently if you are reading complicated material or new material it has been shown that you comprehend the material much better and are able obviously able to read faster if you read through any areas you don't understand.  So reading faster and more pages has been shown to be more beneficial than slowing down and really drilling into specifics.  Evidently you will pick up some of the concepts later in the reading.

 

Maybe there is something to trying to read a lot of pages per week that pushes you through certain roadblocks that can cause people to get hung up on new terms or concepts.

 

As I recall, the book advises the reader to read through an entire text without stopping to understand difficult concept only on the first reading. Then it advises to read through it again, giving it the text the most thorough attention possible given unlimited time. However, I read the book several years ago, so I could be mistaken.

[Liberty]

However, I read the book several years ago, so I could be mistaken.

 

Does that mean the book doesn't work?  ;)

[fareastwarriors]

http://www.bloomberg.com/news/2014-03-05/buffett-s-book-pick-guides-fuss-to-marks-beating-market.html

 

 

Buffett’s Book Pick Guides Fuss to Marks Beating Market