mruszczy:

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mruszczy NEED LOGOS!!
Famous Investors
November 7, 2005
Western Investment Club Created by Prabh
Chandhoke, November 7, 2005
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Agenda

• Warren Buffett
• Peter Lynch
• George Soros

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Warren Buffett Oracle of Omaha

• Born 1930, Omaha, Nebraska.
• Attended Wharton- transferred to Nebraska after
  2 years.
• Later received Masters in Economics from
  Columbia under Benjamin Graham (father of value
  investing).
• Currently worth 44 billion,2nd richest man in
  the world.

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• First business purchased a pinball machine for
  25, and placed in barber shop.
• Later purchased 2 others, and sold business for
  1,200.
• In 1957, started his first investment
  partnership with 100 of his own money and
  25,000 from outside investors (Buffett
  Partnership Limited)
• Goal was to beat DOW Jones, by 10 a year.
• 1957-1969 experienced compound rate of 29.5
  compared to 7.4 (DOW).

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• In 1962, BPL began to establish a position in
  Berkshire Hathaway (textile industry) and slowly
  increased it to 49.
• In 1969, liquidated his stake in BPL and
  maintained holding in Berkshire.
• Began to redirect cash invested in textile
  industry to acquire private businesses and
  equities including insurance companies.
• Insurance industry provided large cash flows
  which could be invested in liquid assets.

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• By 1985, business of textile was eliminated and
  began purchasing larger stake in insurance
  companies.
• GEICO and General Re (reinsurer).
• During the past 37 years, the company has
  delivered an average annual return of 22.6.
  Since 1965 the company's book value has gone up
  by 194,936.

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Philosophy

• Investment decisions are long term- based on
  value.
• Never invested tech no value, more complex.
• Invested in industries that were easy to
  understand.
• Has large holdings in
• Coca-Cola
• Gillette (PG)
• American Express
• Wells Fargo
• Does not believe in stock splits stock
  currently trades at 88,300, Class B 2,919.

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Peter Lynch

• Born United States, 1940.
• Attended Boston College and Wharton School of
  Finance.
• Currently serves as Vice Chairman of Fidelity
  Investments.

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• Started working at Fidelity in 1969 as an
  analyst.
• Became manager of the Magellan Fund in 1977.
• Fund consisted of 22 million of assets.
• Fund averaged 29.2 growth from 1977-1990.
• Under his direction, fund grew to 14 billion at
  the time of his departure.
• Also looked for undervalued companies including
  Pier 1 Imports, Taco Bell and Hanes.

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Philosophy

• Invest in what you know
• Divided stocks into 6 groups slow growers,
  stalwarts, turnaround plays, asset plays,
  cyclical stocks, fast growers
• Favoured fast growers and avoided slow growers
  and cyclical stocks.
• Know the story of each company and follow it.
• Dont sell the stock if the 'story' is still
  good, whether the market is up or down."

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George Soros

• Born 1930 in Hungary.
• Graduated from the London School of Economics.
• Founded Soros Fund Management LLC.
• Includes hedge funds such as the Quantum Group of
  Funds.
• Open Society Institute.

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• In 1992, Quantum Funds made 2 billion in under
  a week.
• Tremendous pressure on England to devalue
  currency.
• Took a 10 billion short position on the pound,
  and made 2 billion profit.
• Also lost, 2 billion in Russian Ruble crisis.
• Quantum fund average annual return from
  1970-2000 was approximately 30.
• If you had invested 1,000 in 1969 it would have
  been worth 4 million in 1994 if it were invested
  in the Quantum Fund.

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Philosophy

• Speculative bets on securities throughout the
  world including currencies - short term focus.
• Based analysis on macroeconomic trends and
  events.
• No guts, no glory.
• It is not whether you are right or wrong that's
  important, but how much money you make when
  you're right and how much you lose when you're
  wrong

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• Questions?