How to Sound Like a Rich Old Guy

Over the course of a week, the world has been graced with the presence of two financial market legends, Alan Greenspan and Warren Buffett. Both of these guys, one a former long-serving Federal Reserve Chairman and the other a billionaire investing guru, are getting up there in age so it’s important to catch their live appearances while are still above ground. Each gentleman offers a great example of how keeping the mind sharp through rigorous daily studies and the pursuit of new learning could make age but a number. In our opinion, Greenspan and Buffett could intellectually stomp the typical investment banker or portfolio manager for their life experiences are like no other. Buffett has built his company Berkshire Hathaway into a holder of 10 insurance companies and 69 commercially focused businesses, including a railroad. People pay $120,000 a share to own Berkshire Hathaway stock at this moment for it basically resembles an annuity (in terms of consistent returns), while 30,000 people flocked to the annual meeting to seek Buffett’s advice, along with that of his equally intelligent and senior in age Charlie Munger. As for Greenspan, he was the first rockstar Federal Reserve Chairman, a man that was easily recognized on local news before the rise of the iPhone and internet. That rockstar status arose as Greenspan gained unmatched knowledge of the global financial system during his tenure, to go alongside an already impressive resume as a top economist.

We not only want you to sound as smart as these legends, but to understand their words/advice while they are still popping up on television networks. Once they are no longer with us, we highly doubt the average person will YouTube them, so catch’em in action today.

World of Warren Buffett

Buffett on Berkshire buying back its own stock: “Only if they are dramatically undervalued.”

For a stock, or as Buffett thinks, a company, to be dramatically undervalued is for investors, today, to be unfairly appreciating a company’s future profits. If a stock trades at $100 per share, but the outlook for the business is so strong as it grows globally that it’s worth $200 per share that would be “dramatically undervalued.” Buffett hates the thought of buying back Berkshire stock because usually he believes the company is worth more than the stock market believes today. Moreover, he would rather spend the money doing a splashy deal that only makes the company financially stronger in the future.

Buffett on paying a dividend: “Putting the money to good use is better than paying a dividend.”
Along the lines of his views on buying back Berkshire stock, Buffett wants available cash should a mega deal surface. That cash pile is not as robust if Berkshire is sending checks to shareholders every three months. Furthermore, Buffett tends to be of the opinion shareholders of Berkshire will be fairly compensated by holding Berkshire stock, making a sweeteners in the form of a dividend unnecessary.

Buffett on deals: “I don’t think every deal I have made could be made by a successor.”

If Warren Buffett picks up the phone and says let’s do a deal or “hey, give me XYZ terms and I will loan you cash and provide my stamp approval”, rest assured people drop everything and listen. However, “sweetheart” deals may be less available to the eventual Buffett successors simply because they are not the iconic investor, despite having access to gobs of money and Buffett’s son serving as non-executive chairman of the company. As a long-term investor in Berkshire, this comment has to be the most alarming.

Decoding Wall St. is an interactive, online investor education platform designed to teach the masses about investing and the world of Wall Street in a fresh, easy to understand way.  For those aspiring to become investors, or those relatively new to the world of investing, our Gumshoe membership teaches you everything there is to know about what the “experts” are talking at you on a daily basis.  As for industry pros, our Sleuth membership helps to decode all of the nitty gritty stock market facts and jargon you love, and then guide you to winning stocks based on that knowledge.  Both membership options provide the member with direct access to Editor in Chief of Decoding Wall St., stock market/investing expert, and media personality Brian Sozzi.  www.decodingwallst.com As for industry pros, our Sleuth membership helps to decode all the nitty gritty stock market facts and jargon you love, and then guide you to winning stocks based on that knowledge.

Both membership options provide the member direct access to Editor in Chief of Decoding Wall St., stock market/investing expert, and media personality Brian Sozzi. As for industry pros, our Sleuth membership helps to decode all the nitty gritty stock market facts and jargon you love, and then guide you to winning stocks based on that knowledge.