Life Lessons from Movies

Warren Buffett

In Documentary, Movies on June 27, 2014 at 5:15 PM

Warren Buffett: Bloomberg Game Changers (2013) is a documentary from Bloomberg Television about Warren Buffet, a billionaire investor who became the world’s wealthiest person by buying stocks from companies, and later companies, that were: easy to understand, well managed, competitive, enduring and profitable businesses, such as See’s CandiesGEIKO insurance, and Fruit of the Loom clothing – all of which became subsidiaries of Berkshire Hathaway, his investment company.

Life Lesson:

One path to obtaining wealth is investing long term in the stock market, which has an S&P 500’s historical average return of 10% per year: Buy stocks when the market goes down/stock prices drop, keep those stocks for multiple years/decades, and “know what you buy, and buy what you know.” — Motley Fool

Movie Scene:

Buffett: “Many people take their cues as to what to do from what the market itself is doing, but [Benjamin] Graham would tell you that the market is there to serve you, not to inform you. And basically he was saying the market will be wrong… sometimes the market is very, very wrong and if you look at the prices of stocks as buying pieces of businesses, you will be able to recognize when the market is very wrong.”

Narrator: “He was picking stocks that others were ignoring, and his stocks kept going up.”

Roger Lowenstein: “He’s devouring every annual report, and they stayed devoured. He remembers them and he’s got these balance sheets in his mind, so that if a stock gets cheap, you know, three years later, he remembers what the fundamentals of the company are. This is a ‘buy now’.”

Alice Schroeder: “Warren has always quoted Gus Levy, who said, ‘be greedy when others are fearful; be fearful when others are greedy’.”

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  1. From:
    http://www.fool.com/legal/fool-disclosure-policy.aspx

    “First, we strongly believe the most effective way to create wealth is through the long-term ownership of stocks. The stock market has compounded 10% average annual returns over the last century. We believe in using the stock market as a savings bank, and we strongly encourage treating money management as a lifelong endeavor.”

  2. From:
    http://www.fool.com/investing/general/2008/02/01/the-greatest-secret-of-all.aspx

    “Expressed in easy-to-read black and white on a page or two of numbers was an astonishing demonstration of long-term investment success. Almost position by position, stocks that were trading for $30, $40, $50 a share on that day had been held for years and years, invested at cost bases of $1.57, $2.34, $0.88.

    What I saw that day is what every young investor should see: Finding good companies and holding those positions tenaciously over time can yield multiples upon multiples of your original investment. That’s what great investors do. Warren Buffett has done it with classic American brands Coca-Cola (NYSE: KO ) and American Express (NYSE: AXP ) ; Philip Fisher did it with Motorola (NYSE: MOT) and Texas Instruments (NYSE: TXN) ; Shelby Davis did it with American International Group (NYSE: AIG). […]

    Find good companies and hold those positions tenaciously over time to yield multiples upon multiples of your original investment.”

  3. From:

    http://americasmarkets.usatoday.com/2014/11/12/whats-apple-worth-skys-the-limit/

    “Analysts have been scrambling to keep ahead of the soaring shares of Apple — but the stock seems to have no bounds. Perhaps the analysts saying Apple is the first “risk free” stock are on to something after all?”

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