Friday, April 17, 2015
FAIRFIELD-SUISUN, CALIFORNIA
99 CENTS

Buffett investment approach not what you may think

sievers column sig

By
From page B8 | June 22, 2014 |

Every year when Warren Buffett releases his annual report on Berkshire Hathaway, I always find it to be interesting reading. It is an excellent counterpoint to the usual superficial financial reporting in the media.

Too often the financial media focuses on the wrong topic, mainly because it sounds sensational and will sell. For example, when the media raises the subject of beating the market through astute stock picking, they often cite Warren Buffett. But what does this legendary investor actually say about the smart way to invest?

Buffett is considered to have such a track record of picking stock winners and avoiding losers that his annual letter to shareholders in his Berkshire Hathaway conglomerate is treated as a major event by the financial media. But the media emphasis is off target.

Usually the reporters are obsessed with current issues they can whip into a “crisis.” What does he think about the Federal Reserve taper? What could be the implications for emerging markets of a Russian military advance into Ukraine? What does an economic slowdown in China mean for developed markets?

Buffett has a neat way of parrying these questions from journalists and analysts. Instead of offering instant opinions about the crisis of the day, he recounts in his most recent annual letter a folksy story about a farm he has owned for nearly 30 years.

He states that he has not laid awake at night worrying about fluctuations in the farm’s market price. Instead, he has focused on its long-term value. He counsels investors to take the same sanguine, relaxed approach to liquid investments such as shares as they do to the value of their family home.

“Those people who can sit quietly for decades when they own a farm or apartment house too often become frenetic when they are exposed to a stream of stock quotations,” Buffett said. “For these investors, liquidity is transformed from the unqualified benefit it should be to a curse.”

While many people seek to ape Buffett in analyzing individual companies in minute detail in the hope of finding a bargain, he advocates that the right approach for most people is to let the market do all the work and worrying for them.

“The goal of the nonprofessional should not be to pick winners,” Buffett wrote in his annual letter. “The regular investor who both diversifies and keeps his costs minimal is virtually certain to get satisfactory results.”

As to all the predictions out there about interest rates, emerging markets or geopolitics, there will always be a range of opinions, he says. But we are under no obligation to listen to the media commentators, however distracting they may be.

“Owners of stocks . . . too often let the capricious and irrational behavior of their fellow owners cause them to behave irrationally,” Buffett says. “Because there is so much chatter about markets, the economy, interest rates, price behavior of stocks, etc., some investors believe it is important to listen to pundits and, worse yet, important to consider acting upon their comments.”

The Buffett prescription isn’t rocket science, as one might expect from an unassuming, plainspoken octogenarian from Nebraska. He rightly points out that an advanced intellect and success in long-term investment don’t necessarily go together.

“You don’t need to be a rocket scientist,” he has said. “Investing is not a game where the guy with the 160 IQ beats the guy with 130 IQ.”

I think Buffett is spot-on in his opinions. But maybe that is because those are my opinions as well.

Mark Sievers, president of Epsilon Financial Group, is a certified financial planner with a master’s in business administration from the University of California, Berkeley. Contact him at [email protected]

LEAVE A COMMENT

Discussion | No comments

The Daily Republic does not necessarily condone the comments here, nor does it review every post. Read our full policy

.

Solano News

Show features 3 men, 21 guitar strings, Bach

By Amy Maginnis-Honey | From Page: B1

 
Scores attend workshop on Fairfield Train Station

By Ryan McCarthy | From Page: A1, 20 Comments | Gallery

Director brings light, humor to ‘Picnic’

By Amy Maginnis-Honey | From Page: B1

 
State moves to install barrier on Delta channel

By Kevin W. Green | From Page: A1, 2 Comments | Gallery

 
Young inventors test catapult-making skills

By Ian Thompson | From Page: A1, 1 Comment | Gallery

 
Military brats made memories

By Tony Wade | From Page: A2, 1 Comment

 
 
Women in Action to host bunco bash

By Amy Maginnis-Honey | From Page: A3

Il Fiorello all-in for chocolate favorites

By Susan Hiland | From Page: B3

 
Kroc Center hosts 1st science fair

By Ian Thompson | From Page: A3, 1 Comment | Gallery

 
Judge provides update on status of Solano courts

By Jess Sullivan | From Page: A4 | Gallery

County to host warehouse sale of surplus items

By Kevin W. Green | From Page: A4

 
Total Home, Garden and Outdoors Show starts

By Ian Thompson | From Page: B11 | Gallery

 
Weather for Friday, April 17, 2015

By Daily Republic staff | From Page: B12

Fairfield police log: April 15, 2015

By Susan Hiland | From Page: A12

 
Suisun City police log: April 15, 2015

By Susan Hiland | From Page: A12

.

US / World

Office worker arrested for posing as dentist

By The Associated Press | From Page: A2

 
Standardized tests to be taken on computers

By The Associated Press | From Page: A5

National Guardsmen charged with selling arms

By The Associated Press | From Page: A5

 
Drought is apparent cause for death of hundreds of elk

By The Associated Press | From Page: A5

 
Auction house cancels internment camp art auction

By The Associated Press | From Page: A5

WikiLeaks creates online archive of hacked Sony documents

By The Associated Press | From Page: A6

 
 
Homeland chief: Gyrocopter came in ‘under the radar’

By The Associated Press | From Page: A6

Amid chaos, Al-Qaida consolidates hold of Yemen province

By The Associated Press | From Page: A7

 
Thousands flee as IS group advances on Iraq’s Ramadi

By The Associated Press | From Page: A7

Putin confident on economy, offers to mend ties with West

By The Associated Press | From Page: A7

 
Coast Guard makes seizure of 14 tons of cocaine

By The Associated Press | From Page: A12

.

Living

Today in history: Friday, April 17, 2015

By The Associated Press | From Page: A2

 
Community Calendar: April 17, 2015

By Susan Hiland | From Page: A2

Horoscopes: April 17, 2015

By Holiday Mathis | From Page: A9

 
My son’s new girlfriend is insisting we sever ties with his former flame

By Kathy Mitchell and Marcy Sugar | From Page: A9

.

Entertainment

Week in preview April 17-23, 2015

By Amy Maginnis-Honey | From Page: B1

 
 
New ‘Star Wars’ teaser, cast information revealed at event

By The Associated Press | From Page: B3

 
Kim Richards of ‘Real Housewives of Beverly Hills’ arrested

By The Associated Press | From Page: B3

Sarah Jessica Parker returns to HBO with comedy ‘Divorce’

By The Associated Press | From Page: B3

 
Entertainment Calendar: April 17, 2015

By Susan Hiland | From Page: B4

 
Ari Millen multiplies as male clones on ‘Orphan Black’

By The Associated Press | From Page: B5

TVGrid

By Daily Republic Syndicated Content | From Page: B6

 
.

Sports

Prep girls soccer: Breeden lifts Vanden to 1-1 tie with Benicia

By Daily Republic staff | From Page: B7

 
Prep softball: Vikings sail to 12-1 win over Falcons

By Daily Republic staff | From Page: B7

Rodriguez earns 9-6 badminton win over Armijo

By Daily Republic staff | From Page: B7

 
More changes likely for Kings after another losing season

By The Associated Press | From Page: B7

Warriors? Cavs? Spurs again? No clear NBA Finals favorite

By The Associated Press | From Page: B7

 
Phelps wins 100 butterfly at 1st meet in 8 months

By The Associated Press | From Page: B7

JC baseball: Falcons lose battle for first to Mariners

By Daily Republic staff | From Page: B7

 
Middle School soccer: Green Valley boys, girls sweep PSA

By Daily Republic staff | From Page: B7

Prep swimming: Indians swim well, get swept by Wildcats

By Daily Republic staff | From Page: B7

 
Prep boys golf: Mustangs fall to Crushers in MEL play

By Daily Republic staff | From Page: B7

 
NBA players to be tested for HGH starting next season

By The Associated Press | From Page: B8

NFL reinstates Adrian Peterson from suspension

By The Associated Press | From Page: B8

 
Reports: Top prospect Kris Bryant headed to the Cubs

By The Associated Press | From Page: B8

Spieth struggles in 1st round after Masters win

By The Associated Press | From Page: B8

 
NBA sets attendance record with nearly 22 million fans

By The Associated Press | From Page: B8

Jewell Loyd taken first in WNBA draft by Seattle

By The Associated Press | From Page: B8

 
Giants rallies fall short in 7-6 loss to Dbacks in 12

By The Associated Press | From Page: B8

Coroner: Ex-NFL running back’s cellmate death ruled homicide

By The Associated Press | From Page: B8

 
Thief steals sneakers from Boston Marathon bombing survivors

By The Associated Press | From Page: B8

 
This date in sports history for Friday, April 17, 2015

By The Associated Press | From Page: B9

Signups for Friday, April 17, 2015

By Paul Farmer | From Page: B10

 
NFL reinstates Adrian Peterson from suspension

By The Associated Press | From Page: B10

Woman who accused Winston of rape files lawsuit against him

By The Associated Press | From Page: B10

 
.

Business

 
Scion youth looks to sedan, hatchback to revive sales

By The Associated Press | From Page: C2

Obama signs overhaul of how Medicare pays doctors

By The Associated Press | From Page: B11

 
More Americans sought unemployment benefits last week

By The Associated Press | From Page: B11

US home construction off to weak March start

By The Associated Press | From Page: B11

 
Apple digs in on green with China solar, US forest projects

By The Associated Press | From Page: B11

VW recalls Chrysler-made minivans to fix ignition switches

By The Associated Press | From Page: B11

 
Financial incentives OK’d for workplace wellness programs

By The Associated Press | From Page: B11

Yahoo chooses to stay with Microsoft in updated search deal

By The Associated Press | From Page: B11

 
Nissan expands air bag recall after Louisiana injury

By The Associated Press | From Page: B11

.

Obituaries

Richard F. Coleman

By Nancy Green | From Page: A4

 
Reginald M. Davis

By Nancy Green | From Page: A4

.

Comics

Zits

By Daily Republic Syndicated Content | From Page: A8

 
Dilbert

By Daily Republic Syndicated Content | From Page: A8

Pickles

By Daily Republic Syndicated Content | From Page: A8

 
Get Fuzzy

By Daily Republic Syndicated Content | From Page: A8

B.C.

By Daily Republic Syndicated Content | From Page: A8

 
Beetle Bailey

By Daily Republic Syndicated Content | From Page: A8

Wizard of Id

By Daily Republic Syndicated Content | From Page: A8

 
Garfield

By Daily Republic Syndicated Content | From Page: A8

For Better or Worse

By Daily Republic Syndicated Content | From Page: A8

 
Rose is Rose

By Daily Republic Syndicated Content | From Page: A8

Frank and Ernest

By Daily Republic Syndicated Content | From Page: A8

 
Peanuts

By Daily Republic Syndicated Content | From Page: A8

Baby Blues

By Daily Republic Syndicated Content | From Page: A8

 
Sally Forth

By Daily Republic Syndicated Content | From Page: A8

Blondie

By Daily Republic Syndicated Content | From Page: A8

 
Baldo

By Daily Republic Syndicated Content | From Page: A8

Sudoku

By Daily Republic Syndicated Content | From Page: A9

 
Word Sleuth

By Daily Republic Syndicated Content | From Page: A9

Bridge

By Daily Republic Syndicated Content | From Page: A9

 
Cryptoquote

By Daily Republic Syndicated Content | From Page: A9

Crossword

By Daily Republic Syndicated Content | From Page: A9