Monday, May 7, 2012

Is Warren Buffet still in the game?

Is Buffet still regarded as one the most successful investor in the world?

Buffet has built his wealth using the value investing principle which included  "Purchase businesses with excellent long-term prospects, Purchase businesses at a large discount to their intrinsic value, Purchase businesses with a high return on invested capital and Purchase businesses with honest managers".
Recently, I have seen a lot of articles on the " Wall street Journal", " Yahoo finance"  doubting about the investing methods of Buffet in this new Era of finance, so I went to check his company's stocks  (Berkshire hathaway) price on bloomberg and I got this :
I picked the 1 year period to have a better idea, and I compared it to the index' price of the S&P 500 (purple line) and the stock's price of JP morgan (blue line). Despite the financial turmoil caused by the european debt crisis, Berkshire Hathaway has shown  little variation compare to JP Morgan stocks which shows that Berkshire is a less risky stock compare to Jp Morgan. Moreover the stock has been following the value of the S&P 500 which shows that Buffet has been able to diversify almost all the unsystematic risk of its assets). The performance of this stock seems to be really fair for a crisis period and it is not the first time Buffet is getting through a crisis, and his experience shows that he can handle it.

So My Answer is YES, Buffet is still an excellent investor and his value investing principle is still up to date.
I widely reccomend the book " The Warren Buffet way" which explains in details how Warren Buffet invest and how he starts his career and became one of the most successful investor.


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