Six Days Until Release Of Next Press On Research Issue
Below is a three page unedited and unfinished excerpt from the next Press On Research issue. To release July 21 2015.
The Biggest Investment Secret In The World
How Warren Buffett Got So Rich And How You Can Too
Warren Buffett is admired around the world for his philanthropy. He plans to donate 99% of his $70 billion plus net worth to charity when he dies.
And he can donate so much money because of how great an investor he is.
But almost no one knows how Warren Buffett made his fortune.
Yes, most investors know about his investments in Coke (K), Johnson & Johnson (JNJ), and Wells Fargo (WFC). But this isn’t how he built his fortune and Berkshire Hathaway.
Investor’s who’ve studied Buffet know he built his partnership, and then Berkshire Hathaway, buying small companies.
But this still isn’t the true secret to Warren Buffett’s success.
Today I’m going to tell you how he built an initial $100,000 of investable money into more than $70 billion. And tell you how we can start doing the same things Buffett did.
So we can start building our own fortunes by owning a safe, small, investment he would buy if he were starting to invest today.
But before we explain the exact companies Buffett built his fortune on. We need to talk about why Press On Research concentrates on small caps.
A University of Kansas student asked Buffett about this in 2005:
“Question: According to a business week report published in 1999, you were quoted as saying: “It’s a huge structural advantage not to have a lot of money. I think I could make you 50% a year on $1 million. No, I know I could. I guarantee that.”…would you say the same thing today?”Here’s Buffett’s answer:
“Yes, I would still say the same thing today. In fact, we are still earning those types of returns on some of our smaller investments. The best decade was the 1950s; I was earning 50% plus returns with small amounts of capital. I could do the same thing today with smaller amounts. It would perhaps even be easier to make that much money in today’s environment because information is easier to access.
Yes, I’ve said this before many times. But it’s an important concept to understand.
Small ultra safe investments that produce a ton of cash. Have little to no debt. Pay dividends and buy back shares. And are cheap are my favorite investments.
These kinds of businesses are what Value Investing Journey and Press On Research is all about.
Today’s recommendation has no debt. Is undervalued by every one of my conservative valuations. Owns more cash, cash equivalents, and short term debt equivalents than its entire market cap.
Just its net cash, cash equivalents, short term debt equivalents make up 77% of the companies market cap. And its more profitable than its competition.
This doesn’t count any of its property, plant, and equipment, future premiums earned, or cost free float. And this company is undervalued by 29% to 70%.
Today’s pick isn’t just a great company with all the above traits. It’s also in Buffett’s favorite industry to invest.
To see the rest of this 27 page issue. What the company is. And the three other Press On Research picks up to this point. Subscribe here.
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Benjamin Graham – also known as The Dean of Wall Street – was a scholar and financial analyst who mentored legendary investors such as Warren Buffett, William J. Ruane, Irving Kahn and Walter J. Schloss.
Warren Buffett wrote the preface for Graham’s book – The Intelligent Investor – in which he calls it “by far the best book about investing ever written.”
Graham’s first recommended strategy – for novice investors – was to invest in Index stocks.
For more serious investors, Graham recommended three different categories of stocks – Defensive, Enterprising and NCAV – and 17 qualitative and quantitative rules for identifying them.
For professional investors, Graham described various special situations or “workouts”.
Warren Buffett once gave a speech at Columbia Business School explaining how Graham’s record of creating exceptional investors (such as Buffett himself) is unquestionable, and how Graham’s principles are everlasting. The speech is now known as “The Superinvestors of Graham-and-Doddsville”.