Thursday, 12 July 2012

Warren Buffett - This is Always a Bad Investment

Uploaded by  on 1 Apr 2011
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From 2008 to 2009 it was a once in a lifetime year. There was even more panic than the Great Depression because of how fast it came on. Congress came through into the end. We had the right people in Washington. We don't know what would have happened if other men were in that position.

This was a great opportunity to purchase a business that will be around for hundreds of years. It is the most inexpensive way for travel, and it is the best for the environment. Both of those things are going to be important in the future. There will be more people and more goods in America in the future.

If Charlie had agreed with this purchase, then it probably would have been the wrong answer. He just kin of grumbled, which is a good sign. The railroad business is highly controlled, and it is capital intensive. But it will be here, and if it provides reasonable returns, then that it good enough.

Coal is widely shipped by train. We will wean ourselves off of coal, and we will reduce our use of that over time. If someone wants to replicate a railroad company, it might take $100 million. Railroads have become far more efficient over the years. They move far more goods with fewer people.

Cash is always a bad investment. Cash has never produced anything, and its value will go down over time. We will always have cash around, but it's not good to have too much. You would much rather own a good business. Every currency will be worth less in the future. More money will be printed than there will be goods circulating in the economy.

1 comment:

Investbullbear Investbullbear said...

Warren Buffett has US$ 8 to US$ 10 billion to invest every year.

Despite this, he had US$ 40 billion in cash before the GFC in 2008. Then he invested US$ 20 billion during the 2008 - 2009 GFC meltdown. He continues to keep cash of at least US$ 10 billion always.

Food for thought.

1. How much cash income is your portfolio of stocks generating yearly?
2. How much cash income do you have to reinvest yearly?
3. Are you growing this cash income over the years?
4. How much cash do you keep in your portfolio at any time?

My goal:

1. To grow consistently the cash income of my portfolio to >>> RM$ XX per year.
2. To have a portfolio cash income of RM$ XX per year to reinvest into new businesses and stocks.