Tap Dancing To Work by Carol Loomis

by Book ReviewsScrip Scan

Carol Loomis’s ‘Tap Dancing To Work ~ Warren Buffett on practically everything 1966-2012’

Believe me I read the Book in one Saturday Night Sitting till 2 am on Sunday Morning And I’m penning this quick review after a hearty Sunday Morning Breakfast!

Carol Loomis especially brings the Book quite alive towards the Millenium years with Warren Buffett’s Berkhshire Hathaway picking up Chinese Companies, Petro China and BYD

For a Buffett Fans, this selected compilation of Buffett articles, some written by him and others by others, and his Annual Shareholder Letters is simply a must possess

As Carol Loomis presents her credentials to write this book“… lucky to be standing alongside Warren Buffett as he was becoming Warren Buffett”

The Inside Story of a young Warren Buffett

Warren Buffett was born in Omaha in 1930 ~ has had a fascinating journey with Numbers and Money right from when he was just a kid ~ he adored his stockbroker father Howard Buffett,who affectionately called him ‘Fireball’ ~ he memorized a book ‘One Thousand Ways to Make $1000’ and pictured himself to be the world’s youngest millionaire ~ he got his first books on stocks at the tender age of just 8! ~ at 11 he and his fried put out a horse racing handicapping sheet under the name Stable-Boy Selections! ~ he went on to try out all trading methodologies and at the same age picked up his first stock Cities Service investing US $ 114 of the US $ 120 he had painstakingly accumulated over five years in his bank account as shown in the maroon passbook ~ a bank that he later purchased! ~ at 13 he had to move to Washington from Omaha when his father was elected to Congress ~ he was homesick for Omaha and ran away and suffered drop in his school grades,even in Maths that was his favourite ~ till his father threatened to stop his newspaper delivery routes ~ At 16 he graduated from school and did two years at the Univ of Penn before moving to the Univ of Nebraska where in 1950 at the age of 19 he first read Benjamin Graham’s ‘The Intelligent Investor’ ~ In 1950 he applied to Harvard and was interviewed by a local alumni in Chicago who appraised him thus “a scrawny 19 year old who looked 16 and had the social poise of a 12 year old” ~ the interview was over in just ten minutes as were his chances of Harvard ~ this was a blessing in disguise as Buffett learnt that Benjamin Graham was teaching at Columbia and he successfully applied ~ here he met William Ruane,who runs Sequoia Fund today, and they became lifelong friends~ At the end of the school year Buffett offered to work for Benjamin Graham’s Investment company Graham-Newman, for free but Ben denied him the opportunity as Buffett humorously now states “Ben applied his customary calculation of value to price and said no” ~ However Ben Graham allowed Buffett to join him only in 1954 ~ Two years later Buffett moved back to Omaha in 1956 equipped with Graham’s learnings and set up Buffett Partnership Limited at just 25 with US $ 105000 funds from Family and Friends ~ 13 Years later in 1969 when he disbanded it (read below) it had grown to US $ 100 Million under management

In 1969 Buffett actually suggested to invest in Bonds and stay away from Equity!

In 1969, Buffett,39 at the time, returned the funds that had compounded 24% in thirteen years to Investors in his Partnership suggesting to them to invest in municipal bonds instead of Equities as he suspected the juice had gone out of the stock market and that sizeable gains are in the future going to be very hard to come by ~ “This is a market I don’t understand”

On misjudging Inflation in 1970

In 1970 Buffett contended that Inflation and Corporate Taxes will remain high and Corporate Earnings will languish at 12% ~ he underestimated Fed Governor, Paul Volcker’s resolve to break the back of Inflation

Ironically buying out Berkshire Hathaway was his worst mistake! 

Ironically, Buffett’s worst Investment Mistake was his buying out a dying textile company Berkshire Hathaway in 1965 and trying to revive it ~ he describes this as a ‘Cigar Butt Approach’ where there is a Cigar Butt lying on the ground burning with one more puff left in it ~ you pick it up because you see it as free and cheap ~ but it’s a dying butt! ~unless you are planning to liquidate the company the approach is one of great folly ~ Berkshire Hathaway was transformed into a Holding Company that invests in Many Other Companies ~ today it is the flagship of Warren Buffett ~ and is assisted by just 23 persons in running it! ~ Of course the Companies invested in are run independently by brilliant managers ~as he wrote in one of his Shareholder letters “we are looking for large simple businesses(if there’s lots of technology,we won’t understand it) with consistent earning power,little debt,management in place (we can’t supply it) and an offering price.We will not engage in unfriendly transactions.We can promise complete confidentiality and a very fast answer as to possible interest – customarily within five minutes”  

In 2012 Warren Buffett has promised Carol Loomis that in 2015 when he completes 50 managerial years he will pen a catalog of his mistakes ~ “I will not lack for material” he jests

Some of Buffett’s gems from the 1989 Shareholder letter

“It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price”

“Good Jockeys do well on good horses,but not on broken-down nags”

“…when a Management with a reputation for brilliance tackles a business with a reputation for bad economics,it is the reputation of the business that remains intact”

 “My behavior has matched that admitted by Mae West:”I was Snow White,but I drifted””

“Charlie and I have not learned how to solve difficult business problems.What we have learned is to avoid them….we concentrated on identifying one-foot hurdles that we could step over rather than we acquired any ability to clear seven-footers” 

“It’s no sin to miss a great opportunity outside one’s area of competence.But I have passed on a couple of really big purchases that were served up to me on a aplatter and that I was fully capable of understanding”

Being discordant with Efficient Market Hypothesis  and the Debate on “Can you Beat the Market” 

In May 1984, Colombia University pitted the well known Academic,Prof Michael Jensen of the University of Rochester against Warren Buffett to debate the Efficient Market Hypothesis Theory ~ Jensen  began first expounding the virtues of EMH and asserting that the excellent investment performance of Warren Buffett and others could not undeniably be attributed to skill ~ the records could just have easily been compiled by luck  ~ Buffett then goes on to demolish Jensen’s assertion in his famous address “The Superinvestors of Graham-and-Doddsville” calling it absurd that the nine superinvestors achieved their performance purely by chance ~ they had done so in widely different ways with very few stocks being duplicated in each others portfolios ~ their value approach reflect the ideas of a common intellectual father, the late Benjamin Graham

On his Views on his Children Inheriting his Wealth 

Says Buffett on leaving Wealth for his Children,Susan,Howard and Peter ~ all in their 50s ~ “enough money so they could feel they could do anything,but not so much that they could do nothing” 

He disclosed in 2010 that apart from the US $ 10 million that they were willed by their Mother Susie on her death in 2004,he will be bequeathing US $ 15 million to each on his death~Their Foundations too have been gifted with over US $ 400 million each for deploying towards charitable causes and will rise gradually to reach even beyond US $ 2 billion ~ However most of his billions are now going to the Bill & Melinda Gates Foundation

On the Infamous Salomon 1991/92 Scandal

This is Buffett’s wry comment on the fine and jail sentence imposed on Paul Mozer who precipitated the treasury auction scandal and his taking over the reins ~” Mozer’s paying $ 30000 and is sentenced to prison for four months. Salomon’s Shareholders including me paid  $ 290 million,and I got sentenced to ten months as CEO”

On Traits that will spawn New Warren Buffetts IWBIt goes beyond just Investment PerfromanceII

It goes beyond Investment Performance ~ It involves High Grade Ethics ~ putting Clients Interests before self ~having a large part of your own networth invested alongside clients to avoid potential conflicts of interest~ brains help but only upto a point ~ ability to detach brain from emotions to be rational in making decisions other than based on short term greed or fear

On his Coca Cola Investment

“If you gave me $ 100 billion and said take away the soft-drink leadership of Coca-Cola in the world, I’d give it back to you and say it can’t be done”

Warren Buffett quietly began buying Coca Cola in 1988 and continued till 1994 till Berkshire Hathaway now has a near 9 % stake through adjusted 400 Million shares at an investment of US $ 1.3 Billion at just under $ 3.25

Buffett also served on the Coca Cola Board till 2007 and was instrumental in making the Coca Cola CEO Doug Ivestor resign after just two years in the seat in 2000 telling him that he had lost trust in his leadership ~ Buffett also successfully argued against the next CEO Doug Daft’s proposal to diversify into non cola products and acquire Quaker Oats,which owned Gatotrade in a $ 15.7 billion deal by issuing Coke Stock

The Book chronicles so much more till 2012 including Buffett’ mockery of ‘Beta’ as a concept of Risk,his not looking at macro indicators when investing in Equities,his  investing $ 500 million in Petro China by simply reading the Annual Report and selling it off for a huge Profit inside years before it fell off a cliff,of taking huge losses in Conoco Phillips because of wrong timing of purchase in 2007 and 2008, and his Investment in another Chinese Auto Battery Company BYD because he believed in Dave Sokol’s enthusiasm even though he broke his own rule of not investing in what he did not know and he had no idea of cellphones and batteries,on him simply telling Sokol “Don’t make a habit of it” when Sokol lost $ 200 million on a bad Investment because of a new technology that did not work in the field,on why Sokol resigned on suspicion of Insider Trading on Lubrizol, having acquired the shares before proposing that Buffett too acquire them,on How Bill Gates,who was reluctant to come for the day spend,but had committed to his mother, and he met and became friends for life and how there is a 10 year bet that ends in 2017 between Protege Partners, a New York based Money Management Fund that manages a Fund of Funds and Warren Buffett ~ the point Buffett makes is that a passive low cost Index Fund will give better returns than a Hedge Funds after expenses and fees are deducted ~ the bet is between the performance of five selected hedge funds and the S & P 500 ~ so far both are on even keel.

Read the Book ~ It’s a fascinating insight into Warren Buffett ~ the Man and his Mindset and Methods.

Screw Business As Usual by Richard Branson

by Book ReviewsScrip Scan

Richard Branson’s ‘Screw Business As Usual’ is fairly interesting but not as racy and peppy as his earlier books

Richard Branson’s  “Screw Business As Usual” ~ Is written in first person in his signature racy style ~ yet found it not as racy and peppy as his earlier books ~ more an encouraging pat for many he believes are making a difference to Planet Earth and the Species, including Humans, on it  and for some a clear ‘plug’

Many of those who read it may view it more like a Compilation Endeavour of Social, Economic and Environmental Issues that dog our World and how these are being tackled by enterprising and concerned Individuals and Entities, including Branson and his Virgin Group

One of his earlier efforts “Screw It, Let’s Do It” changed my view of Richard Branson ~ in fact it charged me up as there were a host of situational similarities I saw between Branson and me ~ for instance both of us have cheated Death more than once ! ~ the only difference is that his adventures over the Ocean &  in the Air were out of Choice and mine out of Chance in Bomb Blasts, Sahara Desert and in a Road Accident!

In the Preface itself of “Screw Business As Usual” one gets a sense of what the Book is all about ~ “It’s at moments like these one realises how unimportant ‘stuff ‘  is” says Branson when he along with Family & Friends that included Kate Winslet of ‘Titanic’ fame, watch as the House on his Necker Island was reduced to ashes in a fire caused by lightening that struck the Balinese Roof ~ Yet the Positive Energy radiates ~ “The future is still ours to hold and share”  says Branson as he rallies all to come around and have breakfast and pitch in with ideas and discuss how to rebuild the House

The Book is all about exploring this next great frontier where the boundaries between work and higher purpose are merging into one,where doing good really is good for business

It’s a Long Read ~ 372 Pages, not counting the 12 pages that include the Preface ~ Seven Chapters that begin with Capitalism 24902 and ends with Power of Communities

The Essence is to turn typical corporate business culture and philanthropy on it’s head, and move away from just the ‘golden cheque’ philosophy to leveraging everything in the business to drive change ~ Capitalism 24902 conveys that every single person on earth is responsible for taking care of the 24902 circumference miles of our planet  ~ it’s not just ‘doing good’ but it’s ‘doing better’ and having fun along the way

Branson relates several situations and endeavours, some of which that his Virgin Group has got involved in to ‘do better’ for the world we live in

Many of these are fascinating :

~ one of which is about an enterprising and concerned Indian, Gyanesh Pandey who creates eco friendly and cheap Electricity from a waste product, Rice Husk for the Villagers in Bihar, India

~ another is of an American of Indian Origin, Jigar Shah who created SunEdison for Solar Energy

~ a third is of  Chris Kilham, an ethobotanist who  New York Times describes as “part David Attenborough, part Indiana Jones” ~ he has gone from being a hippie with a passion for yoga and yogurt to unlocking the health secrets that plants hold ~ one of his early trips was to India to locate exotic plants that were mentioned in the ancient manuscripts ~ he met up with witch doctors, shamans and ordinary people who used these plants as medicines and herbal remedies ~  this resulted in a holistic health course “The Shaman’s Pharmacy’

Of course many of  Branson’s references gave me a sense of ‘plugging’ too, especially of the US Giants Wall Mart and GE ‘s efforts to control emissions !  ~ Let me tell you this ~ USA is one of the biggest polluters and yet  is not a signatory to the UN Climate Protocols of Kyoto ~ The Copenhagen effort too was thwarted being dominated and bullied by USA

An absorbing chapter is ‘Gaia Rocks’ ~ Gaia is the Greek Goddess of Earth and is the name given by James Lovelock to his theory of Earth being alive and therefore a living organism that  can enjoy good health or  suffer disease ~ he relays bad news that the Earth is seriously ill and will soon lapse into a coma that will last for 100000 years! We are responsible and we will suffer, he cries ~ “We are destroying our own home. With every species and habitat we destroy we are upsetting the balance of Gaia!”

….and Branson adds ” So why worry about lemurs, sharks, tigers, elephants and parks when we have so many other issues in the world? How we treat the world is a reflection of our humanity, our intelligence, our conscience, and, ultimately, our very survival. The rapid depletion of our natural resources since the start of the Industrial Age is the root cause of any of the impending environmental issues, such as climate change”

Branson’s  personal mantra for success has always been :

  • Have passion for what you do
  • Believe in Yourself and Your Product and Customer
  • Persevere
  • Delegate
  • Listen
  • Have Fun

….and to all of this he has added ‘Do Good’

You would ‘do good’ by buying his new book ~ but you would ‘do better’ by perhaps simply borrowing it from a library, like I have done 

president-barack-obama

Barack Obama, after taking Oath of Office as President of USA

by Inspiring Speeches

Barack Obama’s Historic Speech on January 20, 2009, after taking Oath of Office as USA’s 44th and First African American President

president-barack-obamaHistory is made, Barack Obama became the 44th and the first African American President of the United States of America on January 20, 2009. Here is his historic speech:

My fellow citizens: I stand here today humbled by the task before us, grateful for the trust you have bestowed, mindful of the sacrifices borne by our ancestors. I thank President Bush for his service to our nation, as well as the generosity and cooperation he has shown throughout this transition.

Forty-four Americans have now taken the presidential oath. The words have been spoken during rising tides of prosperity and the still waters of peace. Yet, every so often the oath is taken amidst gathering clouds and raging storms. At these moments, America has carried on not simply because of the skill or vision of those in high office, but because We the People have remained faithful to the ideals of our forbearers, and true to our founding documents.

So it has been. So it must be with this generation of Americans.

That we are in the midst of crisis is now well understood. Our nation is at war, against a far-reaching network of violence and hatred. Our economy is badly weakened, a consequence of greed and irresponsibility on the part of some, but also our collective failure to make hard choices and prepare the nation for a new age. Homes have been lost; jobs shed; businesses shuttered. Our health care is too costly; our schools fail too many; and each day brings further evidence that the ways we use energy strengthen our adversaries and threaten our planet.

These are the indicators of crisis, subject to data and statistics. Less measurable but no less profound is a sapping of confidence across our land — a nagging fear that America’s decline is inevitable, and that the next generation must lower its sights.

Today I say to you that the challenges we face are real. They are serious and they are many. They will not be met easily or in a short span of time. But know this, America — they will be met.

On this day, we gather because we have chosen hope over fear, unity of purpose over conflict and discord.

On this day, we come to proclaim an end to the petty grievances and false promises, the recriminations and worn-out dogmas, that for far too long have strangled our politics.

We remain a young nation, but in the words of Scripture, the time has come to set aside childish things. The time has come to reaffirm our enduring spirit; to choose our better history; to carry forward that precious gift, that noble idea, passed on from generation to generation: the God-given promise that all are equal, all are free, and all deserve a chance to pursue their full measure of happiness. In reaffirming the greatness of our nation, we understand that greatness is never a given. It must be earned. Our journey has never been one of short-cuts or settling for less. It has not been the path for the faint-hearted — for those who prefer leisure over work, or seek only the pleasures of riches and fame. Rather, it has been the risk takers, the doers, the makers of things — some celebrated but more often men and women obscure in their labor, who have carried us up the long, rugged path towards prosperity and freedom.

For us, they packed up their few worldly possessions and traveled across oceans in search of a new life.

For us, they toiled in sweatshops and settled the West; endured the lash of the whip and plowed the hard earth.

For us, they fought and died, in places like Concord and Gettysburg; Normandy and Khe Sanh.

Time and again these men and women struggled and sacrificed and worked till their hands were raw so that we might live a better life. They saw America as bigger than the sum of our individual ambitions; greater than all the differences of birth or wealth or faction.

This is the journey we continue today. We remain the most prosperous, powerful nation on Earth. Our workers are no less productive than when this crisis began. Our minds are no less inventive, our goods and services no less needed than they were last week or last month or last year. Our capacity remains undiminished. But our time of standing pat, of protecting narrow interests and putting off unpleasant decisions — that time has surely passed. Starting today, we must pick ourselves up, dust ourselves off, and begin again the work of remaking America.

For everywhere we look, there is work to be done. The state of the economy calls for action, bold and swift, and we will act — not only to create new jobs, but to lay a new foundation for growth. We will build the roads and bridges, the electric grids and digital lines that feed our commerce and bind us together. We will restore science to its rightful place, and wield technology’s wonders to raise health care’s quality and lower its cost. We will harness the sun and the winds and the soil to fuel our cars and run our factories. And we will transform our schools and colleges and universities to meet the demands of a new age. All this we can do. And all this we will do.

Now, there are some who question the scale of our ambitions — who suggest that our system cannot tolerate too many big plans. Their memories are short. For they have forgotten what this country has already done; what free men and women can achieve when imagination is joined to common purpose, and necessity to courage.

What the cynics fail to understand is that the ground has shifted beneath them — that the stale political arguments that have consumed us for so long no longer apply. The question we ask today is not whether our government is too big or too small, but whether it works — whether it helps families find jobs at a decent wage, care they can afford, a retirement that is dignified. Where the answer is yes, we intend to move forward. Where the answer is no, programs will end. And those of us who manage the public’s dollars will be held to account — to spend wisely, reform bad habits, and do our business in the light of day — because only then can we restore the vital trust between a people and their government.

Nor is the question before us whether the market is a force for good or ill. Its power to generate wealth and expand freedom is unmatched, but this crisis has reminded us that without a watchful eye, the market can spin out of control — and that a nation cannot prosper long when it favors only the prosperous. The success of our economy has always depended not just on the size of our Gross Domestic Product, but on the reach of our prosperity; on our ability to extend opportunity to every willing heart — not out of charity, but because it is the surest route to our common good.

As for our common defense, we reject as false the choice between our safety and our ideals. Our Founding Fathers, faced with perils we can scarcely imagine, drafted a charter to assure the rule of law and the rights of man, a charter expanded by the blood of generations. Those ideals still light the world, and we will not give them up for expedience’s sake. And so to all other peoples and governments who are watching today, from the grandest capitals to the small village where my father was born: know that America is a friend of each nation and every man, woman, and child who seeks a future of peace and dignity, and that we are ready to lead once more.

Recall that earlier generations faced down fascism and communism not just with missiles and tanks, but with sturdy alliances and enduring convictions. They understood that our power alone cannot protect us, nor does it entitle us to do as we please. Instead, they knew that our power grows through its prudent use; our security emanates from the justness of our cause, the force of our example, the tempering qualities of humility and restraint.

We are the keepers of this legacy. Guided by these principles once more, we can meet those new threats that demand even greater effort — even greater cooperation and understanding between nations. We will begin to responsibly leave Iraq to its people, and forge a hard-earned peace in Afghanistan. With old friends and former foes, we will work tirelessly to lessen the nuclear threat, and roll back the specter of a warming planet. We will not apologize for our way of life, nor will we waver in its defense, and for those who seek to advance their aims by inducing terror and slaughtering innocents, we say to you now that our spirit is stronger and cannot be broken; you cannot outlast us, and we will defeat you.

For we know that our patchwork heritage is a strength, not a weakness. We are a nation of Christians and Muslims, Jews and Hindus — and nonbelievers. We are shaped by every language and culture, drawn from every end of this Earth; and because we have tasted the bitter swill of civil war and segregation, and emerged from that dark chapter stronger and more united, we cannot help but believe that the old hatreds shall someday pass; that the lines of tribe shall soon dissolve; that as the world grows smaller, our common humanity shall reveal itself; and that America must play its role in ushering in a new era of peace.

To the Muslim world, we seek a new way forward, based on mutual interest and mutual respect. To those leaders around the globe who seek to sow conflict, or blame their society’s ills on the West — know that your people will judge you on what you can build, not what you destroy. To those who cling to power through corruption and deceit and the silencing of dissent, know that you are on the wrong side of history; but that we will extend a hand if you are willing to unclench your fist.

To the people of poor nations, we pledge to work alongside you to make your farms flourish and let clean waters flow; to nourish starved bodies and feed hungry minds. And to those nations like ours that enjoy relative plenty, we say we can no longer afford indifference to suffering outside our borders; nor can we consume the world’s resources without regard to effect. For the world has changed, and we must change with it.

As we consider the road that unfolds before us, we remember with humble gratitude those brave Americans who, at this very hour, patrol far-off deserts and distant mountains. They have something to tell us today, just as the fallen heroes who lie in Arlington whisper through the ages. We honor them not only because they are guardians of our liberty, but because they embody the spirit of service; a willingness to find meaning in something greater than themselves. And yet, at this moment — a moment that will define a generation — it is precisely this spirit that must inhabit us all.

For as much as government can do and must do, it is ultimately the faith and determination of the American people upon which this nation relies. It is the kindness to take in a stranger when the levees break, the selflessness of workers who would rather cut their hours than see a friend lose their job which sees us through our darkest hours. It is the firefighter’s courage to storm a stairway filled with smoke, but also a parent’s willingness to nurture a child, that finally decides our fate.

Our challenges may be new. The instruments with which we meet them may be new. But those values upon which our success depends — hard work and honesty, courage and fair play, tolerance and curiosity, loyalty and patriotism — these things are old. These things are true. They have been the quiet force of progress throughout our history. What is demanded then is a return to these truths. What is required of us now is a new era of responsibility — a recognition, on the part of every American, that we have duties to ourselves, our nation, and the world, duties that we do not grudgingly accept but rather seize gladly, firm in the knowledge that there is nothing so satisfying to the spirit, so defining of our character, than giving our all to a difficult task.

This is the price and the promise of citizenship.

This is the source of our confidence — the knowledge that God calls on us to shape an uncertain destiny.

This is the meaning of our liberty and our creed — why men and women and children of every race and every faith can join in celebration across this magnificent mall, and why a man whose father less than sixty years ago might not have been served at a local restaurant can now stand before you to take a most sacred oath.

So let us mark this day with remembrance, of who we are and how far we have traveled. In the year of America’s birth, in the coldest of months, a small band of patriots huddled by dying campfires on the shores of an icy river. The capital was abandoned. The enemy was advancing. The snow was stained with blood. At a moment when the outcome of our revolution was most in doubt, the father of our nation ordered these words be read to the people: “Let it be told to the future world … that in the depth of winter, when nothing but hope and virtue could survive … that the city and the country, alarmed at one common danger, came forth to meet [it].”

America. In the face of our common dangers, in this winter of our hardship, let us remember these timeless words. With hope and virtue, let us brave once more the icy currents, and endure what storms may come. Let it be said by our children’s children that when we were tested we refused to let this journey end, that we did not turn back nor did we falter; and with eyes fixed on the horizon and God’s grace upon us, we carried forth that great gift of freedom and delivered it safely to future generations.