GARY, YOUR BEING SUCH AN ASTUTE INVESTOR WHY NO WARNINGS ABOUT THE PRESIDENT AND HIS ACTIONS WITH CENSORING RADIO STATIONS COULD BE A SERIOUS THREAT ON REAL ESTATE INVESTMENTS. I SEE YOUR WILLING TO TRADE YOUR ECUADOR REAL ESTATE FOR FLORIDA PROPERTIES COULD THIS BE WHY. JUST A THOUGHT, PERHAPS I AM WRONG.
You can see the direct reply to this reader’s question if you click here.
However a more important side note below may help you make investing and business decisions about your lifestyle.
First let me state that there are five really important reasons (to Merri and me) why we are spending more time in the US now than in some previous years.
First, my mom (now going on 90) and our…
granddaughters Teeka and…
her older sister Sequoia who is busy here working in the greenhouse
Garren, our grandson, here helping us (ahem) on the farm. Plus…
trusty Mahananda, our pumpkin patch hound. She is closing in on 14 and according to Dogworld.com, that’s pretty old for a human. She is still spry and acts like a kid when she sees a rabbit… but her sighs when we reach an airport are enough said. So we no longer fly her… and she does not like kennels so we hire someone to stay at home with her when we are away. (Sorry, only dog lovers will understand.)
These reasons get to the crux of matching one’s daily situation to one’s investing and business activity.
The reader’s comments above started me thinking about this important point that relates to matching lifestyles with business and investing. On our recent visit to Oregon… as we left Portland Union Station heading…
heading for Seattle to
visit friends and to have health exams… the trains intensified the importance of the lifestyle wealth match.
That train trip started me thinking about Warren Buffet and his purchase of Burlington Northern Santa Fe Railroad.
When Buffet made the purchase there was a lot of criticism. Morningstar Inc., the Chicago research firm, valued Burlington shares at $90, below the Buffet’s price of $100. Buffett could have purchased Burlington’s stock at its low for about $67 a share.
Buffet’s comments on this criticism pointed out the importance of matching lifestyle with investments when he said that “$100 was his first and best offer. You do what you can when you can,” he said.
Buffet clarified this importance of fitting investments to one’s situation in an interview with Charlie Rose. An excerpt from the transcript is below. The bold is mine.
CHARLIE ROSE: Reasonable return is good enough?
WARREN BUFFETT: Reasonable return is good enough, Charlie. I mean, 50 years ago, I was looking for spectacular returns, but I can’t— I can’t get them. We have— we have eight or $10 billion to invest every year. And we’re in the utility business, and it’s the same thing there. When we build electric generation or something of the sort, we shouldn’t expect a spectacular return. We’re building things that are essential to society, and people need our services. They really don’t have any choice in the case of the electric utilities, for example, and sometimes in case of rail. And we should get a decent return on that. Enough to encourage us to keep putting money into the business, but we’re not entitled to spectacular returns.
There you have it. 25 years ago when Buffet was young and investing reasonably smaller amounts, he could look for bargains. With eight to $10 billion to invest his lifestyle dictates reasonable … not spectacular returns.
Buffet is matching his investing and his business to his unique circumstances. He is not getting the cart before the horse. I doubt that you’ll see Buffet altering his beliefs… his actions…. his organization… to try and get spectacular returns from his multi billions of investments. He instead is matching his investing to his lifestyle. That’s good for his quantum wealth balance.
That train trip perhaps also helped me understand buffet’s investment as well. There is something solid about trains… a solid link from the past to now… a solid bedrock of communication less fraught with the risks that are associated with air travel.
The industrial revolution went into high speed when America embraced the train. Maybe railroads will again advance America in some new revolutionary way. I am for it! Whenever there is a logical alternative… I remain grounded these days and you’ll find me traveling by train.
P.S. I spotted two other important comments, about investing and business balance, in my research on Buffet’s railway purchase.
First, important comment about investing and business balance:
Billionaire Warren Buffett is showcasing his company’s recent acquisition of the Burlington Northern Santa Fe Railroad at the start of Berkshire Hathaway’s annual meeting.
Buffett did a series of interviews before a cardboard BNSF locomotive Saturday morning, played with a model BNSF train and performed a version of “I’ll Be Working on the Railroad” before the meeting.
Buffett and his partner Charlie Munger will spend more than five hours answering questions from roughly 40,000 people.
Buffett says he believes BNSF is a big, solid business that will deliver good returns over the long-term. Berkshire spent $26.7 billion on the railroad earlier this year.
Buffett played his ukulele with the Quebe Sisters Band at the Justin Boots booth before heading backstage.
The point is that Buffet uses music to help maintain balance. My experience is that many really successful business people use some artistic form to help connect their right and left brains… so they have whole, long term thinking that keeps them in tune with our universe that is beyond logic.
I certainly try this which is why I love to play music and paint.
Imagine the benefits railroads may gain from the Icelandic volcano. Yet… there is no way that Buffet could have logically known about this new risk to travel when he bought the railroad.
Another comment in Buffet’s interview was: Without becoming too insipidly philosophical here, let me quickly add this. Blaise Pascal once said: “Most of men’s problems arise from their inability to sit quietly and alone”.
This is why our quantum wealth courses feature how to use music and meditation to reduce stress and increase intelligence.
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