Do You Know What Warren Buffet Is Buying?
A REALTOR friend of mine, Lisa Carey of Armor Realty in Tallahassee, sent me an email recently regarding things we should be considering in this current real estate market. Lisa cited a Money Magazine article titled "21 Good Things To Do In A Bad Market," and expressed that we will probably all look back at this time and regret that we weren't more aggressive in picking up bargains.
Her quote got me thinking about the most successful investor that I know about. Warren Buffett usually has something to say about different segments of the economy so I went out looking to see if the "Oracle of Omaha" had anything new going on in real estate.
Real Estate Brokerages On Buffett's Plate
It turns out that Bershire Hathaway (Buffetts investment company) is the parent company of the second largest real estate brokerage business in the United States. In an article on Bloomberg.com, it is noted that his company, Homeservices of America, is making money in the biggest housing slump since the great depression. Apparently, Mr. Buffett is not listening to all the noise in the market, rather he is gathering good buys when he can find them.
There Is So Much To Learn From Warren Buffett
When I was working on my MBA, I tried to focus much of my work on the lessons that Mr. Buffett has presented over the years. His explanation of intrinsic value is an excellent lesson in investment analysis and his ability to simplify often complex situations has been demonstrated for many, many years, much to the benefit of his investing partners.
Great Quotes From Warren Buffett
I'll end this simply with some of my favorite quotes that are attributed to the "Oracle of Omaha."
- I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful. Lecturing to a group of students at Columbia U. He was 21 years old.
- The most common cause of low prices is pessimism - some times pervasive, some times specific to a company or industry. We want to do business in such an environment, not because we like pessimism but because we like the prices it produces. It's optimism that is the enemy of the rational buyer. 1990 Chairman's Letter to Shareholders
- We will reject interesting opportunities rather than over-leverage our balance sheet. Berkshire Hathaway Owners Manual
- Managers thinking about accounting issues should never forget one of Abraham Lincoln's favorite riddles: `How many legs does a dog have if you call his tail a leg?' The answer: `Four, because calling a tail a leg does not make it a leg'.
- Our future rates of gain will fall far short of those achieved in the past. Berkshire's capital base is now simply too large to allow us to earn truly outsized returns. If you believe otherwise, you should consider a career in sales but avoid one in mathematics (bearing in mind that there are really only three kinds of people in the world: those who can count and those who can't)1998 Chairman's Letter to Shareholders