National Oilwell Varco Inc (NYSE:NOV)

CAPS Rating: 5 out of 5

The Company is a worldwide provider of equipment and components used in oil and gas drilling and production operations, oilfield services, and supply chain integration services to the upstream oil and gas industry.


Player Avatar 20Punches (45.61) Submitted: 12/26/2012 1:55:42 PM : Outperform Start Price: $45.08 NOV Score: -1.63

“When Warren lectures at business schools, he says, “I could improve your ultimate financial welfare by giving you a ticket with only 20 slots in it so you had twenty punches – representing all the investments that you get to make in a lifetime. And once you’ve punched through the card, you couldn’t make any more investments at all. Under those rules, you’d really think carefully about what you did, and you’d be forced to load up on what you’d really thought about. So you’d do much better.”" – Charlie Munger

In the spirit of this idea, I made 5 initial punches/picks, and will thereafter make a maximum of 1 pick per fiscal quarter until all 20 punches have been used. I expect to use up all punches over the next 5-7 years. I will compare the performance of this acct to my more "active" CAPs account, and see if this maxim proves correct.

Report this Post 6 Replies
Member Avatar DrGoldin (99.69) Submitted: 1/1/2013 6:57:19 AM
Recs: 2

People hang on Ole Warren's words as though he were a prophet, and unfortunately his advice isn't always helpful (at least not if it's taken literally). The notion that we shouldn't make more than twenty different investments in a lifetime is preposterous. Think about it--your house alone is (at least) one of them. How many investments has Ole Warren himself made? And what happens when you prudently decide to close a position: do you get your punch-hole back? Or are you supposed to just sit on the proceeds for the rest of your life?

Member Avatar 20Punches (45.61) Submitted: 1/1/2013 7:33:29 PM
Recs: 3

It's not to be taken literally. The main idea is just to limit yourself to your very best ideas. And yes, people are overly obsessed with Buffett, including me. I try to learn from as many gurus as I can.

Member Avatar trackjakeambrose (55.16) Submitted: 1/13/2013 5:57:19 AM
Recs: 1

dr, the point hes making is to think very serious about your moves for one, and your house is not what hes meaning by investments, hes meaning investments intended to achieve being asssets which a house is not. next, warren making way more than 20, if u did take it literally, is not to apply because he has billions to invest. he might not be ablt to purchase as large of stakes in companies as he likes because there isnt enough available and buying say 50% of mcdonalds would be hard to sell off with out your own buys sky rocketting the share price and sells dropping it. next, no a sell counts as a punch. point being some things u invest in u may never sell so choose wisely you may be living off those dividends for life.

Member Avatar trackjakeambrose (55.16) Submitted: 1/13/2013 5:58:58 AM
Recs: 0

him making more is because has to find more places to use the money because his now amount is so dam huge.

Member Avatar dajmipivo (44.42) Submitted: 1/14/2013 2:08:54 PM
Recs: 1

I can do it with two picks - VTI and BND.

Member Avatar aldousworp (< 20) Submitted: 5/4/2013 12:32:49 AM
Recs: 0

At one time over 90% of Buffet's fortune was in one stock. I think it was Geico. Now it's mostly in Berkshire. I've seen a Youtube video where Charlie Munger said without their dozen or so best picks he and Warren wouldn't be famous. His words were more colorfull.

I've had similar experience. With a few exceptions, the stocks I put serious money into have done much better than the rest. In 1976 I put almost my entire net worth of $3,100 into Rockwell International. I sold most of it for about $18,000 eleven years later. What was left has since grown to over $60,000 (including the half dozen spin-off companies). Berkshire Hathaway and Qualcomm did even better. In late 1999 Qualcomm grew to over 60% of my portfolio. I have had many less profitable stocks including many that lost money, sometimes all I put in. When I diversifed by selling Qualcomm and buying stocks outside telecom I got a lot of junk. One of the biotechs went up seven times what I paid for it in six months. Then it went to zero over the next couple years. Freddie Mac and Fannie May also went up a lot before going almost to zero.

Featured Broker Partners