Posts Tagged ‘warren buffet’
Warren Buffet – The Snowball and The Business Of Life
Why Read It?
•The first full biography of Warren Buffett, the most famous investor of all time, written with his full cooperation and collaboration.
•Gives a lucid account of his life and career, from his first financial forays to becoming a revered investment guru.
•Analyses his business deals and strategies, as well as mistakes, by looking at the development of his investing style, his many investment partnerships, and how he built up his fortune.
•Snowball is a thorough and inclusive biography of the world’s greatest investor, examining his family history, his youthful adventures, and how he developed his investment acumen.
•It shows how Buffett came from a line of small business owners, and how his parents toiled through the Great Depression, and how his somewhat unbalanced mother shaped his outlook on life.
•Reveals that his investment career took off with the purchase of textile firm Berkshire Hathaway, and explains how he grew it into the 12th largest corporation in the United States.
•It combines biographical detail with an examination of his business deals, focusing on the development of his expertise, strategy, and investment philosophy.
•Lays bare the real Buffett—his moral viewpoint, honesty, and integrity, as well as his many contradictions, such as his frugality, eccentric eating habits, and choice of clothing.
•Details how he built up his business expertise, and the success of his many investment partnerships.
•Gives a detailed account of his investments over the years, how he selected companies in which to invest, his definition of risk, and how he decided how much to actually invest in each company.
•Shows his successful preference for long-term investing in sound businesses that he can understand, as well as belief in stewardship and integrity towards these companies.
•Examines how he has evolved into the figurehead of value investing after his guru Benjamin Graham, rather than as someone who follows market bubbles, such as the tech boom of the late 1990s.
•Looks at his dependence on friends and a network of business associates, and how his collaboration with other investment managers proved essential to his success.
•Provides insight into Buffett’s focus on customer loyalty, the quality of management, choosing allies carefully, and avoiding unnecessary diversity.
•Shows how he was one of the first to point out the inherent danger in derivative products, and how they could affect the financial system.
Quotations
“Warren may have said he wanted to become a millionaire, but he never said that he would stop there.”
“Berkshire’s best opportunities always came at times of uncertainty, when others lacked the insight, resources, and fortitude to make the right judgments and commit.”
“Cash combined with courage in a crisis is priceless.
Boom time is over and we are slap bang in the middle of hopefully the worst recession we will ever see.
So is it time for aspiring entrepreneurs to hunker down and wait for the sun to come back out before starting a business?
Not at all.
Recession does indicate a contracting economy but it doesn’t mean that businesses across the board are shrinking and dying. Many businesses and industries buck the trend by growing through the downturn.
You can increase your chances of running one of these businesses by starting a business in an industry that tends to remain resilient, or even prospers, in economic downturns.
So which types of business are good to start in a recession?
Start a business selling essential goods or services
Most businesses are discretionary, meaning that their products and services are non-essential.
Essential items tend to be bought in roughly the same quantities whatever the economic weather. Businesses dealing in food or shelter, two of life’s most fundamental needs, tend to be resilient in an economic dowturns.
There are stark exceptions, however.
Restaurants are enormously susceptible in a recession as the difference in cost compared to eating at home is huge, so meals out are often the first thing to go when people have less money in their pocket.
And the mortgage market can seize up in tough times, like at present, where there’s a squeeze on credit. However, people always need somewhere to live so the lettings market, by contrast tends to remain stable.
Other examples of businesses bracketed in the essential category are law firms, funeral parlours, healthcare businesses, law firms, schools and home maintenance businesses.
Start a business selling guilty pleasures
And yet, somewhat paradoxically, people often increase their spending on non-essentials too, on indulgencies.
For example, Cadbury’s announced a 28% jump in profits in July, and analysts suggest it was, to an extent, because of the recession rather than despite it. In gloomier times people often turn to comfort eating and buy chocolate, ice cream and other treats to make themselves feel better.
People do tend to be more price aware, however, so the emphasis is on affordable luxury. So they’re more likely to plump for Cadbury’s Dairy Milk than Hotel Chocolat truffles.
Start a business selling budget goods
Starting a business selling budget ranges are, unsurprisingly, more prosperous in lean times.
‘Everything for a pound’ shops tend to do well. And with the credit crunch making bank loans hard to come by, pawn shops and cheque cashing shops are enjoying a spike in custom.
In contrast to restaurants, retailers selling budget food ranges are very successful.
Start a business selling goods and services used by the over-50s
They’ve got equity in their property, and they’ve got savings so their earnings rise with interest rates: over 50s have more to spend than younger age groups and they’re also more resilient in a recession.
Buy a franchise
An established franchise will invariably stand a better chance of thriving than a start-up. Many franchise brands have come through previous recessions unscathed so you can be confident they’ll have the means and savvy to do it again.
When the economy contracts some businesses inevitably go under. With their time-honed, streamlined processes and systems, franchises are usually leaner and fitter than their rivals and much less likely to fall by the wayside.
“We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.”
Warren Buffett
