Forum Archive Index - May 2002

[jerrold poh <pohj@ihug.co.nz>]

> > b) he also doesn't buy for the capital increase, but for the
> > dividends.
> 
> I haven't read an awful lot on Buffett, but I think part b) is
> incorrect.

yup, you're correct (forgot about that).  he only invests for capital
increase if he knows that it's going to get him a return that equivilent
of that 25% increase a year.

don't forget though, his most sucessful purchases (washington post,
coke, maybe more) he was able to pay back the entire amount of the
capital he had to use, with the dividends he collected after 5 - 10
years (don't remember the exact number), so after those 10 years, he was
actually getting "free" money from his investment. (very much like real
estate)

interesting fact: during the years that buffett wasn't in the market, he
was doing special deals (don't remember the correct name), where he
would buy companies which were take over targets, or companies who's
shares were about to split, etc, and with that, he was able to make his
25% a year, even though he was "out of the market".



> not sure.  Buffett certainly had a head start on others - maybe in 40
> years time there will be more fundamental investors on the rich list? 
> are there any chartists on the rich list?

true, they aren't any chartists on the rich list, see my next post.


jerrold.


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