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alstry (< 20)




August 29, 2011 – Comments (0)

Buffett's best friend, Bill Gates is one of the world's foremost experts on Technological Singularity....

Buffett knows you can't stop the trend of outsourcing jobs to technology and the pace is accelerating....

it is why Buffett knew to shutter Berkshire Hathway 30 years ago and it went from being a suit lining company to investment business.

The banking business is no favorite of ours. When assets are twenty times equity-a common ratio in this industry-mistakes that involve only a small portion of assets can destroy a major portion of equity. And mistakes have been the rule rather than the exception at many major banks. Most have resulted from a managerial failing that we described last year when discussing the "institutional imperative:" the tendency of executives to mindlessly imitate the behavior of their peers, no matter how foolish it may be to do so. In their lending, many bankers played follow-the-Ieader with lemming-like zeal; now they are experiencing a lemming-like fate.

Because leverage of 20:1 magnifies the effects of managerial strengths and weaknesses, we have no interest in purchasing shares of a poorly-managed bank at a "cheap" price. Instead, our only interest is in buying into well-managed banks at fair prices.

It gets really hard to lie when your philosophy has 30 years of writings behind it.....

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