Buffett's Early Investments

[Brett]

I posted about this in the Berkshire forum, but was moving over here. I am the author of the book--I hope you all enjoy it! I'm happy to answer any questions.

[John Hjorth]

Amazon : Buffett's Early Investments: A new investigation into the decades when Warren Buffett earned his best returns - Brett Gardner.

[dcollon]

I truly enjoyed the book Brett.  It was hard to put it down as I loved the history on the investments.  I can't imagine the amount of time it took to dig up all the information, but thank you for doing it.  You did a great job of putting it all together and making it entertaining to read. 

 

I would highly recommend the book.  

 

 

[John Hjorth]

I took delivery of Brett's [ @Bretts ] book a few days ago.

 

I'm reading it in the nights and early mornings, where I can't sleep atm. I haven't finished reading it yet.

 

To be totally honest, I think it contains claims / assertions, that related to Mr. Buffett [Warren Buffett, the young guy, back in the beginning and the early days, pre Berkshire] may seem provocative.

 

Investing back then in net-nets was simply put - hard, cumbersome - actual work.

 

The book portraits a young man, who in his early innings was overall successful, but also did not not experienced everything he touched as investment successes [please read : headwinds and bummers], to enjoy as his platform later in life, when his approach to investing changed, because of AUM.

 

I read it as Mr. Buffett wasen't a 'savant', 'natural talent' or a person 'wired to generate alpha' [from birth]. It [the extraordinary returns] all came from [hard, sometimes cumbersome] work and due diligence, and an intellectual framework evolved over time, combined with a personality, that if you are right, [based on reason] nothing can stop you, being it an incompetent, high paid CEO, or a chairman, with an outdated world view , and likely also a lot of shares.

 

The message to me personally from the book is 'Investing can be learned', and thereby also - by inverting - 'Investing can be taught'.

 

To me, personally, that's something really special.

Edited November 12 by John Hjorth

[Buckeye]

Hello Brett, congratulations on your book!  What a tremendous feat.  I just purchased a copy on Amazon and am looking forward to reading it. Keep up the good work.

[Ballinvarosig Investors]

My wife has bought me this for Christmas, looking forward to reading it.

 

 @Brett nice of you to drop by. A few questions for you, do you think the style of investing that Buffett did then is applicable today? Also, do you think you could get the same results today? Buffett has said himself that if he managed just $1M, he could compound that at 50%.

[John Hjorth]

New podcast episode about the book :

 

Redeye - Nordic Growth - Investing by the Books [November 12^th 2024] : Investing by the Books #64 Brett Gardner: Buffett’s Early Investments.

Edited Friday at 10:57 AM by John Hjorth

[Spooky]

Ordered the book, looking forward to reading it.

[Kuhndan]

Just finished the book. Congratulations! Original take and great detailed information on a portion of Buffet’s career not fully known.

[Brett]

Thank you all for your kind comments! I really appreciate it. You made all that work worth it!

[Brett]

On 11/12/2024 at 11:47 AM, John Hjorth said:

I took delivery of Brett's [ @Bretts ] book a few days ago.

 

I'm reading it in the nights and early mornings, where I can't sleep atm. I haven't finished reading it yet.

 

To be totally honest, I think it contains claims / assertions, that related to Mr. Buffett [Warren Buffett, the young guy, back in the beginning and the early days, pre Berkshire] may seem provocative.

 

Investing back then in net-nets was simply put - hard, cumbersome - actual work.

 

The book portraits a young man, who in his early innings was overall successful, but also did not not experienced everything he touched as investment successes [please read : headwinds and bummers], to enjoy as his platform later in life, when his approach to investing changed, because of AUM.

 

I read it as Mr. Buffett wasen't a 'savant', 'natural talent' or a person 'wired to generate alpha' [from birth]. It [the extraordinary returns] all came from [hard, sometimes cumbersome] work and due diligence, and an intellectual framework evolved over time, combined with a personality, that if you are right, [based on reason] nothing can stop you, being it an incompetent, high paid CEO, or a chairman, with an outdated world view , and likely also a lot of shares.

 

The message to me personally from the book is 'Investing can be learned', and thereby also - by inverting - 'Investing can be taught'.

 

To me, personally, that's something really special.

 

This is my exact take while researching and I'm so thrilled to hear the point came across! 

 

Buffett was blessed with some abilities: high IQ, natural mathematical abilities. But he got to where he was through hard work. We are not all going to be Warren Buffett--but we can still be successful investors (or we can thrive at whatever endeavor we choose!).

[Brett]

On 11/13/2024 at 8:19 AM, Ballinvarosig Investors said:

My wife has bought me this for Christmas, looking forward to reading it.

 

 @Brett nice of you to drop by. A few questions for you, do you think the style of investing that Buffett did then is applicable today? Also, do you think you could get the same results today? Buffett has said himself that if he managed just $1M, he could compound that at 50%.

 

Thank you, I hope you love it!

 

On your first question: Net-net investing, particularly in the U.S., HAS gotten much tougher. There are objectively fewer of them as the economy has shifted from being dependent on property, plane, and equipment to tangible assets being a minority of those for the companies in the S&P 500. With that said, there are still these types of opportunities on the fringes (and more internationally!). You only need 1 or 2 a year to make your returns. Can Buffett find that one or two? Yeah, I think so. It's possible it would be international than here, and my guess is it may be in even smaller companies. 

 

I'd add, Buffett also did a lot of arbitrage, and he would also use this. I think he would pivot to companies more dependent on the earnings a little sooner than he did if he were running today, especially as he scaled, but he would still do a lot of balance sheet-oriented investing / activism. 

 

On the second question, I think he can definitely get 50% on $1 million deploying broadly the same tactics he did in the pre-partnership years and the first half of the partnership (he did fewer net-nets in the second half of the partnership, such as Amex and Disney). I think the anchor scale presents is pretty drastic, though. Meaning the returns on $10 million are way worse, $100 million are way worse than that, etc.  

 

I think there are a lot more investors that had outstanding returns for 10+ years than is commonly known. But they sort of stop investing other people's capital after accumulating their initial fortune. 

[John Hjorth]

9 minutes ago, Brett said:

 

This is my exact take while researching and I'm so thrilled to hear the point came across! 

 

Buffett was blessed with some abilities: high IQ, natural mathematical abilities. But he got to where he was through hard work. We are not all going to be Warren Buffett--but we can still be successful investors (or we can thrive at whatever endeavor we choose!).

 

Thank you for the flowers, Brett [ @Brett], 

 

I'm one of those 'Berkaholics' around here at CoBF, who really enjoys new stuff about Berkshire! This book is, to me personally, exceptional, as expressed above.

 

What you also have alluded to in the above mentioned Redeye podcast episode, is that the verbal presentations of 'the good old days' as it was 'a game of shooting fish in a barrel', perhaps mostly here alluding to statements by late Mr. Munger [may he rest in peace], buying net-nets [also] 'back then' wasen't without challenges and problems at all.

 

PS: Thank you for sharing all that great Buffett / Berkshire related stuff, you have shared in your LinkedIn feed recently, due to all your work related to the book, that eventually ended up about not to meet your criteria to get included in the book, for the reasons explained by you in the book! [For my fellow CoBF members : Link ]

[gfp]

I think there are some investors doing the 50% annually on tiny companies currently.  This guy comes to mind: https://dirtcheapstocks.substack.com  (this is a paid sub stack but the picks I have seen have been very good) - he is also on twitter.

 

Also Tim Eriksen, who runs Cedar Creek Partners, will probably get close with his expert market stuff.