Monday, April 13, 2015

Warren Buffett Partnership Investments

Warren Buffett is becoming a person bigger than life. He is 84 years old now and very coy about when he'll step down from Berkshire Hathaway. He is, however, focusing on the direction of the company after he passes on. I am very skeptical that anyone can control what happens after they die. But if Warren Buffett can, all the more power to him. I just don't think about it too much. Today, my Berkshire position has dwindled down to a small part of my portfolio. And I don't really pay that much attention on what he does for Berkshire today. He is a whale in the business world, and he buys entire large caps such as Heinz, Kraft and Burlington Southern. The domain where he looks for investments is a crowded space. Quality large caps are well covered and sought after. This results in a efficient marketplace where only geniuses like Buffett can generate alpha. I don't try to duplicate Buffett in this arena as it is too hard and risky.

It is hard because the space is crowded with people who are smarter and have more insight and more time than I do. Also, it is risky because I am not a young person starting out. If I was starting out in my twenties and had a small pot of savings I could do this. I can give it a try and possibly make it the start of a great career. And if I fail at it, no real harm I have plenty of time to recover and find my niche. But I am not twenty and I cannot take an excessive risk of failure. So I must choose a path that is more proven and which makes my abilities less of a factor in the method to success.

This is the reason I've settled on the more Ben Graham's cigar-butt type of investing. Ben Graham was Buffett's early mentor and the Graham's partnership ended when Buffett's partnership was just starting out. So both Graham and Buffett ran partnership's in the same era. And during that era both were looking at cigar butts. But while the mentor was beating the market by around 2% per year, the student, in his own words, "Killed the Dow". I think Buffett did better because he thought more about the quality of businesses. So, I think the opportunity for the least work with the least intelligence with the maximum payoff is to do what Warren Buffett did in the 50's and early 60's.

To do this I need to start with as much information about the investments as possible. This post lists sources of information for Buffett Partnership (BPL) investments of the 50s and early 60's. A copy of Warren Buffett's list of his 1962 BPL investments is displayed in the book Of Permanent Value by Andrew Kilpatrick. I want to get coverage on 75% of the 1962 BPL's total equity by the time I am done.

This list is a work in progress. Enjoy!

Stock year Description Source / Link
GEICO1952 He called GEICO his first love Buffett writeup
Western Insurance Securities1952 Buffett sold GEICO to buy Western, which was even cheaper on paper Buffett writeup
Genessee Valley Gas1953
bovinebear blog
Union Street Railway1956 compoundingmachines

The Snowball by Alice Schroeder
Sanborn Maps1961 Workout situation; Buffett bought company to unlock its stock portfolio csinvseting case study

The Snowball by Alice Schroeder
Berkshire Hathaway1962 A pretty soggy cigar butt
(2.4% of partnership)
Dempster Mills1962 Control situation
(23.0% of partnership)
csinvseting case study
British Columbia Power1962 Workout situation, recommended by Munger
(11.2% of partnership)
bovinebear blog
The Snowball by Alice Schroeder
Texas National Petroleum1962
(5.7% of partnership)

Trade Like Warren Buffett by James Altucher
Stanrock Uranium Ltd.1962 Workout situation
(5.0% of partnership)
bovinebear blog
Young Spring & Wire Corp1962
(5.0% of partnership)
Grinnell Corp1962
(2.9% of partnership)
bovinebear blog
Crane Co.1962
(2.1% of partnership)
bovinebear blog
Black, Sivalls & Bryson, Inc.1962
(1.8% of partnership)
Alco Products1962
(1.0% of partnership)
bovinebear blog
Hartford Fire Insurance, INS1962
(-2.4% of partnership)
bovinebear blog

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