Warren Buffett - Can you get a 50% return on $1,000,000?

Warren Buffett and Charlie Munger discuss the potential of getting a return of 50% per year when starting from a base of $1,000,000. From the 1999 Berkshire Hathaway annual meeting.
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[@knmfujiwara]

Find something you know, something you're good at then invests large chunks of resources with a margin of safety and certainty. Do it enough times and get it right more than you get it wrong. Learn more. Be humble. Be persistent. That's it.

[@veritasimmigration]

Your videos are the BEST! Thank you!

[@The_Financial_Review]

Thank you Bruno!

[@AuditorInvestor]

2:24

[@jf8474]

Does anybody know what Buffett means, where do I have to look?

[@compound26]

Josef Kurzmann Start reading books on value investing I'd suggest start with Dhandho Investor by Mohnish Pabrai Then go on to read Benjamin Graham's books like intelligent investor

[@jf8474]

Thank you both. Ill buy the books you were referring. I already did read peter lynchs "one up on wallstreet" which was great. I just bought "the intelligent investor.

[@Matheus-xk3fj]

Ass Gordon said, active investing is a full time job - indexing is not a bad choice

[@aaryanmehta4609]

Look up NCAV investing, a mechanical form of value investing. One of the best methods for the average retail investor

[@AndrewHillard1]

2x earnings... american steel is currently trading around there

[@thelonewolf8333]

“The Blue horseshoe loves Anacott Steel”

[@abitamimbharmal1498]

Their revenue and profits are shrinking every year. Thats why it trades at 2x earnings. Because it will be 4x earnings next year and 20x earnings in 5 years at this current price.

[@AndrewHillard1]

@@abitamimbharmal1498 Agreed. They are not exactly a good company. But at the time I wrote this comment they had a trailing pe of 2 which is still amazing. And if you had invested when I wrote that comment you would be sitting on about a 100% gain.

[@abitamimbharmal1498]

@@AndrewHillard1 Sure. But I couldve bought Apple or Microsoft or Amazon and made the same return. And on top of that, all three half far better long term prospects than US Steel, which is another thing Buffet looks for

[@aaryanmehta4609]

@@abitamimbharmal1498 It was a cigar butt all okay

[@empemitheos]

People buy millions of dollars worth of real estate for tens of percent under market value pretty often

[@aaryanmehta4609]

I doubt it

[@empemitheos]

@@aaryanmehta4609 you seriously have never seen a house you could renovate and make tens of thousands of dollars on? you realize you're making over the yield of the s&p 500 by just holding a decent mortgage in the house you live in, your day job likely has a return on investment of your college degree over 100% per year, Airbnbs rented out make more than the s&p 500, there is no big mystery to making a high rate of return outside of financial markets with small money, Warren Buffett has to move hundreds of billions and is happy to beat the market by few percent per year, he has said that if there were no management costs, single family real estate is a great investment he would do and beat the market with

[@foodscrazy9229]

Yeah that's true algorithms still can't reach the rural guys with big mansions

[@foodscrazy9229]

@@empemitheos and I heard that one guy made millions raising exotic lizards and his 10 year kid already made 145k , but you need good marketing to sell those animals to celebs

[@empemitheos]

@@foodscrazy9229 I mean it's even simpler than that, it's just very hard for any big money to go out and find valuable property, renovate it, sell it or manage it, warren buffett said himself if it didn't take a ton of management he would try to do that but it's impossible to do that with billions upon billions of dollars and thousands of thousands of houses, though very easy when you have small amounts of money and only do that a few times per year

[@itsrealshadyg2082]

Think about all the folks who are barely starting out with 1K or so and get 100% returns.

[@richardl.currier4052]

That doesn't happen over a longer timeframe, believe me. I've been investing for almost 40 years, through thick and thin, and by far 2020 reminds me the most of 1999. All these folks with their tiny Robinhood accounts are going to be leaving the market soon after getting their asses kicked.

[@D45886]

@@richardl.currier4052 Hopefully because I’m ready to short them

[@richardl.currier4052]

@@D45886 Looks like I was right. Since that post, the EV/SPAC/CRYPTO trade has basically blown up. Anyone who was saturated in those trades has cut their accout in half. Enough said. To top it off, Bitcoin has developed a MASSIVE head and shoulders pattern and is probably heading MUCH lower. Watch out, because Michael Burry has loaded his short position.

[@D45886]

@@richardl.currier4052 Everyone controls his own risk… I‘m pretty happy that just more people jumped in the market. It doesn’t equal a more difficult market environment. It‘s more the opposite. I had an easier time to short Futures since these Robin Hood Boys invest in my strategy :-)

[@richardl.currier4052]

@@D45886 Nice! There should be good short opportunities coming up soon, all these junk stocks have rallied a lot since May.

[@jungeunji8289]

Its kind of weird that people ask buffet if hes able to make 500k in a year.

[@joshreddy4278]

What does he mean by the 2 times earnings? Does he mean market capitalizations

[@killianfoley]

@@daneilpetersen6572 this is not correct. For clarification it's eps * 2 = shareprice

[@warrenwhitmore7472]

He means a price to earnings ratio (PE) of 2 or less. He used that number because (100/2) = 50% The average stock has a price to earnings ratio of 20 which is equal to 5%. This of course implies zero growth.

[@TheMegaTushar]

@@warrenwhitmore7472 how come zero growth? Could plz explain, dont understand 5% point

[@warrenwhitmore7472]

@@TheMegaTushar ; I am happy to. As an example the stock "asc" has a price to earnings of 2.6. If there is no growth or shrinkage of earnings it will take 2.6 years for the earnings to equal the stock price. If there is earnings growth it will take less time. If there is earnings shrinkage it will take longer. There are 3 ways to make money with a stock. 1) Dividends. 2) growth. 3) Trading in and out of the stock. For example let's take the stock "MO" (A large stock) . It is paying an 8% dividend. It has zero growth. So to get that one to 50% you would need to buy at 42 and sell at 48 many times throughout the year. Warren & Charlie can not do this because they would move the market. If you have < 10 million you can get all 3. You can buy a some "GNK" (A small stock) for example collect the dividend, expect some growth, and buy low and sell high. It's a small company so frequently the high price for the year is double the low price for the year. I hope this helps. If you have 1 cent it is easy to turn it into 2 cents in 2 years. Same with a dollar, 10 dollars, 100 dollars etc. All they are saying is at 10 million that game is over.

[@jonasscheuer7639]

@@TheMegaTushar the other guy explained it well. I argue its a bit simpler. Munger and Buffet are obviously smart guys. Imagine them thoroughly looking through stock manuals, eyeing thousands of opportunities and finding something at an "absurdly" cheap evaluation. The markets were way more inefficient back then because information wasnt easily accessible. If you knew where to look, it wasnt that important to know some crazy stuff. That however only worked at smaller sums because of liquidity issues. You cant just invest 10mil$ in an 80mil$ stock without causing a major movement in stock price (this implies that you also get a worse price for your own order) (+ all the "law action" you face when aquiring a large stake in a company). I think this is what Munger and Buffet refer to.

[@christophertaylor3150]

He is combines buying stocks with selling derivatives.

[@ReflectionOcean]

By YouSum Live 00:00:11 Understanding compounding and investment returns. 00:01:43 Small sum opportunities for high returns. 00:02:24 Difficulty in finding high returns with larger sums. 00:03:07 Transition from simpler to more complex investment strategies. By YouSum Live

[@rupenpatel1313]

It will work. It's called Angel investing. Not public listed companies.

[@notfadeaway6617]

ベラルーシで暗殺される以外考えられないが何らかのプロレスなのか？

[@JamesToler]

Few generals sprinkled in with workouts!

[@qalinlecilmi947]

يا ايها في الدولتي انا داخل عداوة واضحة والله لن ينصرني كل وانا قانع في عداوة واضحة وصبر الي الله اين الجيش ارسلني اين

[@qalinlecilmi947]

انا مستعد وطالب لينصرني انا بلا علم يا علماء في العلم لينصرني انا داخل عداوة واضحة ومتاكد لطلبها نستيحة الامريكي

[@foodscrazy9229]

Breed exotic lizards

[@edyedy1436]

What a horrible answer was this... never expected from Warren seriously. It was not even close to what was asked....

[@foodscrazy9229]

You want to be ultra active to do that , you should visit small companies with good future and put a deal that work for you with discounts that no one dare to do

[@foodscrazy9229]

Like Buffet did with regional companies, but it's like being VP investment banker or private equity guy without broker you should do that, that's how he made it , but here I'm without any capital right now and I have to figure out my own way to make money in this country

[@foodscrazy9229]

@@CalebJWebb I found the word , you want to be ruthless to do what MR Buffet did 50+ years ago because you mainly deal with different type of people , not with fancy stocks like all others do right now to get snow ball effect you need some push so reach out small undervalued companies in your are and put a deal