The rise of VietQR = The fall of VNPay, MOMO

by finandlife03/01/2024 08:52

Nguyen Duc Hung Linh

2 years ago, suggesting VietQR for money transfers was met with blank stares. Today, it's everywhere, from shopping malls to wet markets. The rapid popularity of VietQR is phenomenal, especially when compared to the hefty marketing budgets burned by fintech companies. 🤔 Why has VietQR become so popular so quickly?

1 Merchants prefer VietQR for its zero fees and instant money reception. In June 2021, NAPAS launched VietQR alongside NAPAS 247, a service enabling instant, real-time, and zero-fee money transfers between bank accounts. NAPAS 247 disrupts fee-based QR payment services offered by E-wallets or payment gateway companies like VNPay and MOMO.

2 Commercial banks also find VietQR beneficial; more merchant use means more Current Account and Savings Account (CASA) for banks 💰. Banks distribute printed QR codes for merchants, turning hundreds of thousands of bank employees into inadvertent VietQR promoters.

3 End consumers might feel indifferent initially, but more are leaning towards VietQR. Peer-to-peer money transfers through bank apps' QR code generation and scanning make transactions easier. People tend to stick to what they use more often.

What's the impact on the payment landscape?

1 As VietQR gains traction, the usage of VNPay or MOMO diminishes. Fintech giants are compelled to explore alternative strategies for customer retention and revenue generation. VNPay leverages unique features within commercial banks' apps, while other e-wallets strive to evolve into super apps. The path to profitability for these fintech companies has undoubtedly become more challenging. 

2 Here's a little-known impact: ↘ the sharp decline in cash circulation since 2021. It plummeted from over 11% to 8.5% by September 2023. To put it in perspective, it took a decade from 2011 to 2021 to reduce by roughly 1%. In contrast, the last two years saw a remarkable ~3% drop⏬. NAPAS had a clear mission statement: "to promote non-cash payment." Their journey was challenging but now the tide has turned. VietQR emerges as a pivotal player in this success story. 👑 🤔 What's VietQR? VietQR is a trademark for payment and money transfer using QR codes in Vietnam. VietQR belongs to NAPAS (National Payment Corporation of Vietnam). NAPAS is a unique entity, with 49% ownership vested in the State Bank of Vietnam (Vietnam’s central bank) and the remaining 51% distributed among 15 major commercial banks in Vietnam. Beyond Vietnam, VietQR works with a few foreign bank apps from Thailand and Cambodia. This lets Thai and Cambodian tourists use their bank apps to scan and pay in Vietnam using their own currencies. What are your thoughts on this digital revolution? 

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Stocks

PYN ELITE VIEW 2024

by finandlife02/01/2024 08:33

How is the modernization of the Vietnamese stock market progressing?

The stock market status of Vietnam has been discussed for at least 10 years, and nothing substantial has been achieved. Index providers MSCI and FTSE Russell classify countries based on how developed their stock markets are, and Vietnam is ranked as a Frontier market. Should Vietnam be included in Emerging markets, it would bring additional foreign institutional investors to the country’s stock market, which could have a positive impact, especially with regard to the privatization of state-owned companies in the coming years.

During the last six months, some real action has finally begun to be seen in Vietnam. The Vietnamese State Securities Commission has been reported to have received a clear directive from the government to modernize the stock exchange. The new trading system KRX was scheduled to be deployed on the 25th of December. Next year, the old-fashioned prefunding trade regulation will be revised, among other things, and perhaps a solution to the issues related to the foreign ownership limit of companies will be found during the next couple of years. It is already clear that the direction is towards the EM market status, but the pace remains to be seen. The attached table shows the investments made by foreigners in emerging markets and frontier markets. The amount of investments in emerging markets is forty-fold when compared to frontier markets. In addition, the number of funds investing in emerging markets is many times the number of those operating in frontier markets.

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Economics

Summary all public writings Warren Buffett - Part 3

by finandlife30/12/2023 23:02

- When we buy a business, the sellers go on running it just as they did before the sale

- Berkshire is my first love and one that will never fade: At the Harvard Business School last year, a student asked me when I planned to retire and I replied, “About five to ten years after I die.”

- For an increase in profits to be evaluated properly, it must be compared with the incremental capital investment required to produce it

- In our See’s Purchase, Charlie and I had one important insight: we saw that the business had untapped pricing power

- These managers therefore truly stand in the shoes of owners

- Much of my enthusiasm for this purchase came from Frank’s willingness to continue as CEO. Like most of our managers, he has no financial need to work but does so because he loves the game and likes to excel

- The stock market serves as a relocation center at which money is moved from the active to the patient

- We continually search for large businesses with understandable, enduring, and mouth-watering economics that are run by able and shareholder-oriented management

- Charlie and I are simply not smart enough, considering the large sums we work with, to get great results by adroitly buying and selling portions of far-from-great businesses. Nor do we think many others can achieve long-term investment success by flitting from flower to flower.

- If my universe of business possibilities was limited, say, to private companies in Omaha, I would, first, try to assess the long-term economic characteristics of each business; second, assess the quality of the people in charge of running it; and, third, try to buy into a few of the best operations at a sensible price. I certainly would not wish to own an equal part of every business in town.

- (Apple), or even brilliant merchandising (Wal-Mart). We will never develop the competence to spot such businesses early. Instead, I refer to business situations that Charlie and I can understand and that seem attractive - but in which we nevertheless end up sucking our thumbs rather than buying.

- There is no tougher job in corporate America than running an airline: Despite the huge amounts of equity capital that have been injected into it, the industry, in aggregate, has posted a net loss since its birth after KiKy Hawk.

- We assembled a collection of exceptional businesses run by equally exceptional managers

- The only value of stock forecasters is to make fortune tellers look good - Short-term market forecasts are poison

- We’re looking for companies with excellent economic characteristics and management that we like, trust, and admire

- I revised my strategy and tried to buy good businesses at fair prices rather than fair businesses at good prices

- When we allocate capital today, we are thinking about what will maximize look- through earnings 10 years from now

- It’s only when the tide goes out that you learn who’s been swimming naked

- We reject more than 98% of the business we are offered

- Charlie and I continue to like the insurance business, which we expect to be our main source of earnings for decades to come

- How Warren Buffett selects companies

o A business we can understand

o With favorable long-term prospects

o Operated by honest and competent people

o Available at very attractive prices

- Growth is always a component of value

- Growth benefits investors only when the business in point can invest at incremental returns that are enticing

- Leaving the question of price aside, the best business to own is one that over an extended period can employ large amounts of incremental capital at very high rates of return

o Unfortunately, these businesses are very hard to find. Most high-return businesses need relatively little capital

- We try to stick to businesses we believe we understand

- If a business is complex or subject to constant change, we’re smart enough to predict future cash flows

- An investor needs to do very few things right if he or she avoids big mistakes

- If options aren’t a form of compensation, what are they? If compensation isn’t an expense, what is it?

- “How many legs does a dog have if you call his tail a leg?” The answer: “Four, because calling a tail a leg does not make it a leg.” – Abraham Lincoln

- We believe our owner-related policies – including the no-split policy – have helped us assemble a body of shareholders that is the best associated with any widely-held American corporation

- We continue to have an inversion to debt, particularly the short-term kind

- Coke went public in 1919 at $40 per share. By the end of 1920, the market had battered the stock down by more than 50% to $19.50. at yearend 1993, that single share, with dividends reinvested, was worth more than $2.1 million

- We look for good-sized operating businesses that possess economic characteristics ranging from good to terrific, run by managers whose performance ranges from terrific to terrific.

- We prefer to focus on the economic characteristics of the business that we wish to own and the personal characteristics of managers with whom we wish to associate

- An investor should ordinarily hold a small piece of an outstanding business with the same tenacity that an owner would exhibit if he owned all of that business

- In an investment lifetime, it’s just too hard to make hundreds of smart decisions. Indeed, we’ll now settle for one good idea a year.

- The true investor welcomes volatility

- After we buy a stock, we would not be disturbed if markets closed for a year or two. We don’t need a daily quote on our 100% position in See’s or H.H. Brown to validate our well-being.

- As Peter Lynch says, stocks of companies selling commodity-like products should come with a warning label: “Competition may prove hazardous to human wealth”

- Every investor will make mistakes. But by confining himself to a relatively few, easy- to-understand cases, a reasonably intelligent, informed, and diligent person can judge investment risks with a useful degree of accuracy

- By periodically investing in an index fund, the know-nothing investor can outperform most investment professionals. When “dumb” money acknowledges its limitations, it ceases to be dumb

- What a difference a pair of managers like this makes, even when their products have been around for 100 years

- When you combine ignorance and borrowed money, you can get some interesting consequences

- The more certain we feel about a business, the closer we are willing to play it

- You can judge management by three yardsticks (thước đo): Làm thế nào để đánh giá ban điều hành, thứ nhất hãy xem những gì họ đã làm được, thứ 2 hãy xem cách phân bổ vốn của họ, th71 3 hãy xem họ đối xử với những ông chủ thế nào?

o How well they run the business (look at the track record)

o Seeing how they have allocated capital over time

o How well they treat their owners

- Charlie and I have 2 jobs: identify and keep good managers interested and capital allocation

- Treat your partner the way you want to be treated like yourself

- We think our stock is more likely to be rationally priced over time following the present policies than if we were to split in some major way

- Charlie and I don’t read anything about what the economy is going to do or what the market is going to do

- At Berkshire, it makes no difference to us what accounting treatment we get on something. We are interested in the economics of a transaction

- The companies earn unusual returns on equity. They earn unusual returns on sale

- Some companies are a lot easier to understand than others. And Charlie and I don’t like difficult problems.

- You don’t have to do exceptional things to get exceptional results

- The big thing to do is avoid being wrong

- All we want to be is in businesses that we understand, run by people that we like, and priced attractively compared to the prospects

- If we’re right about a business, it would be very foolish for us to not act on that because we thought something about what the market was going to do

- The best thing that can happen to Berkshire over time, is to have markets that go down a tremendous amount

o If you’re going to be a buyer of groceries over time, you like grocery prices to go down

o What we fear is an irrational bull market that’s sustained for some long period

o If you’re right about the business, you’ll end up doing fine

- Charlie and I are very risk-averse by nature

- The value of every business is 100% sensitive to interest rates. The higher interest rates are, the less the present value is going to be

- If we have cash, it’s because we haven’t found anything intelligent to do with it that day

- We would never have an asset allocation meeting

- The best purchases are usually made when you must sell something to raise the money to get them because it just raises the bar a little bit that you jump over in the mental decisions

- I think you could be in someplace where the mail were delayed three weeks, and the quotations were delayed three weeks, and I think you could do just fine in investing

- Berkshire is incredibly decentralized

- One of the best things that could happen to shareholders is the market going down and you being able to buy good businesses at foolish prices

- If you asked us whether Berkshire would be better off if the whole stock market were down 50% or where it is now, we would be better off if it was down 50%

- If we like something well enough to buy a put on it, we’re probably better off buying the security itself

- If you don’t understand the businesses, then you’re better off diversifying and widely diversifying

- When I ran the partnership, the limit I got towas about 40% in a single stock

- Size is a disadvantage

- We don’t hedge currencies. We don’t think our opinion on currencies is any good

- But the economic value of any asset, essentially, is the present value, the appropriate interest rate, of all the future streams of cash going in or out of the business. And there are all kinds of businesses that Charlie and I don’t think we have the faintest idea what that future stream will look like. And if we don’t have the faintest idea what the future stream is going to look like, we don’t have the faintest idea of what it’s worth, now.

- The numbers in any accounting report mean as to economic value

- There is a huge difference in a business that grows and requires a lot of capital to do so, and a business that grows, and doesn’t require capital

- About capital allocation: And yet, probably relatively few chief executives are either trained for or are selected on, the basis of their ability to allocate capital. I mean, they get there through other routes. So, I’ve said it’s like somebody playing the piano all their life, and then getting to Carnegie Hall and they hand him a violin. I mean, it is a different function than most — than the route — than the functions that exist along the routes to the CEO’s job at most companies.

- The purchase at sensible prices of businesses that have good underlying economics and are run by honest and able people – is certain to produce reasonable success. We expect therefore to keep on doing well

- We will continue to ignore political and economic forecasts

- We usually made our best purchases when apprehensions about some macro events were at peak

- Ben Graham taught me that in investing it is not necessary to do extraordinary things to get extraordinary results

- Berkshire has many old managers over 65

- Go to where the puck is going to be, not to where it is

- The skill with which a company’s managers allocate capital has an enormous impact on the enterprise’s value

- A really good business generates far more money than it can use internally

- In all instances, we pursue rationality

- An insurance business is profitable over time if its cost of float is less than the cost the company would otherwise incur to obtain funds

- We like companies with enduring competitive advantages that are run by able and owner-oriented people

- It is folly to forego buying shares in an outstanding business whose long-term future is predictable, because of short-term worries about an economy or a stock market that we know to be unpredictable

- A prime rule of investing: You don’t have to make it back the way that you lost it

- The ownership of Berkshire is stable, and it will be stable for a very long period

- Most managers, when using their own money, understand that money costs money

- Berkshire is one of a kind in terms of its capital strength in the business

- We’re trying not to get into things we don’t understand

- One of the important things in stocks is that the stock doesn’t know you own it

- Derivatives often combine borrowed money with ignorance, and that is a rather dangerous combination

- The question always is what the average return on capital will be

- Most everything we say is no

- Because of the size, it’s not easy to find things to do that make sense with lots of money

- We are trying to look at businesses in terms of what kind of cash can they produce

- We’re trying to find a business with a wide and long-lasting moat around it – protecting a terrific economic castle with an honest lord in charge of the castle.

o All moats are subject to attack in a capitalistic system

o We try to figure out what’s going to keep the castle standing or cause it not to be standing 5, 10, 20 years from now

- Value and growth are joined at the hip

- If you want to attract high-grade people, you probably ought to try and behave well yourself

- And the best businesses, by definition, are going to be businesses that earn very high returns on capital employed over time. So, by nature, if we want to own good businesses, we’re going to own things that have relatively little capital employed compared to our purchase price.

- About circle of competence:

- We don’t have any sector allocation theories whatsoever

- Cash is always something good to have in case of a big market drop

- Ben would not have disagreed with the proposition that if you can find a business with a high rate of return on capital you can keep using more capital on that —that’s the best business in the world. And of course, he made most of his money out of GEICO, which was precisely that sort of business.

- If you own a lousy business, you must sell it at some point. If you own a wonderful business, you know you don’t want turnover.

- Stay away when a company’s accounting is confusing

- Accounting can offer you a lot of insight into the character of management

- The intelligent use of cash is something you look for in management

- It earns good returns on invested capital, or we wouldn’t be buying into it. We always look for good returns on capital.

- There’s no chance we’ll be in businesses we don’t understand, and I won’t understand it

- I’ve mainly learned by reading myself, so I don’t think I have any original ideas.

- So, I think you can learn from other people. I think if you learn reasonably well from other people, you don’t have to get any new ideas or do much on your own. You can just apply the best of what you see

- Study history to become a great investor

- You can’t make a good deal with a bad person

- I pay no attention to stock ratings. It doesn’t mean anything. It’s too bad they must put that there

- We’re trying to buy businesses we want to own forever. If you’re thinking that way, you might as well see what it’s been like to own them forever.

- I see nothing wrong with a company having a negative shareholders’ equity

- Opportunity costs: “Why would I rather have this over Coca-Cola?”

o Compare everything with the best opportunity you have

- We want to be in the business that 10 years from now is earning a whole lot more money than it is now and that we will still feel good about the prospects of the business at that time

- I want to build a collection of companies that have excellent economic characteristics and that are run by outstanding managers

- Most deals do damage to the shareholders of the acquiring company

- We believe a lot in reverse engineering

- The constant challenge for Charlie and me is to allocate capital as we go along

- I have very close to 100% of my net worth in Berkshire

- I like to be associated with managers whom I would love to have as a sibling, in-law, or trustee of my will

- Thinking back over the 1965-1995 period, I can’t recall that a single key manager let Berkshire to join another employer

- All our operations, including those whose earnings dropped last year, benefit from exceptionally talented and dedicated managers

- Many of our managers don’t have to work for a living, but simply go out and perform every day for the same reason that wealthy golfers stay on the tour: they love what they’re doing.

- A bad insurance contract is easy to enter and impossible to exit

- In businesses, I look for economic castles protected by unbreachable “Moats”.

- Our basic goal as an owner is to behave with our managers as we like our owners to behave with us

- Our managers operate with extraordinary autonomy (quyền tự chủ phi thường)

- The key is not what it does to book value per share, but what it does to intrinsic value per share

- If you’re repurchasing shares above a rationally calculated intrinsic value, you are harming your shareholders

- If it’s a wonderful business, we probably come up with higher intrinsic value than most people do

- We have enormous respect for the power of really outstanding business. And we recognize how scarce they are (nhận ra chúng khan hiếm đến mức nào).And if management wishes to further intensify our ownership by repurchasing shares, we applaud. (hoan nghênh)

- One thing to remember: in the end, the owners of businesses, in aggregate, cannot come out any better than the businesses come out

- Float is money we hold that doesn’t belong to us

- We believe in trying to stick with businesses where we think we can see the future reasonably well.

- The main thing you can’t find in annual reports is to learn about the person who’s running the business and how they think about the business and what’s going on in the business

- I can’t be an intelligent owner of a business unless I know what all other businesses in that industry are doing

- Berkshire is not a one-man show. It’s a two-man show, in terms of capital allocation. But it’s run by managers who are doing an outstanding job and who don’t need any guidance from Charlie or me as they go along.

- The other thing we do besides allocating capital is to identify great managers. And hopefully, we make it attractive for them to stay and work for Berkshire.

- A really great business does not require good management. I mean, that’s a terrific business. And the poor business can only succeed, or even survive, with great management

- We look for people who know their businesses, love their businesses, love their shareholders, and want to treat them as partners

- Only invest in companies led by managers with an outstanding track record

- Diversification is a protection against ignorance

o If you know how to analyze businesses and value businesses, it’s crazy to own 50 stocks or 40 stocks, or 30 stocks, probably, because there aren’t that many wonderful businesses that are understandable to a single human being

o There is less risk in owning three easy-to-identify, wonderful businesses than there is in owning 50 well-known big businesses

o If you find three wonderful businesses in your life, you’ll get very rich. And if you understand them – bad things aren’t going to happen to those three

- People don’t like to sit around all day and do nothing

- If you feel you must invest every day, you’re going to make a lot of mistakes

- He keeps learning. That’s one of his tricks.

- A great company is one that’s going to remain great for 30 years

- Phil has done awfully well by finding business he likes, and sticking with them, and not worrying too much about what they do day to day

- People’s investment would be more intelligent if stocks were quoted about once a year

- We are not trying to predict markets. We never will try and predict markets. We’re trying to find wonderful businesses

- I don’t like a business that can do well for 300 years and then make one mistake and be behind.

- There are two things that really count

o Volatility is a good thing

o Having decent (khá) returns on equity

- The best businesses require no capital. This means that if you double the size of the business, you don’t need any more capital. And those companies are wonderful businesses. And we’ve got a few of those

- Our managers expect to be running their businesses for a long, long time. They see themselves as part-owners of the business.

- It isn’t the learning that’s so hard. It’s the unlearning

- I would recommend 2 books: “Common Stocks and Uncommon Profits” by Phil Fisher and “Path to Wealth Through Common Stocks”

- “Warren talks about these discounted cash flows. I’ve never seen him do one.” – Charlie Munger

- Think of investing as owning a business and not buying something that wiggles around in price

- In investing, you don’t have to do anything very smart. You just must avoid doing things that are ungodly dumb.

- We just try to do things that make sense

- We are interested in businesses that provide cash rather than use up cash

- All retail is competitive

- What counts at Berkshire is intrinsic value, not book value

- We can’t guarantee results. We do promise you, however, that virtually all the gains Berkshire makes will end up with shareholders. We are here to make money with you, not off you.

- We seek 2 business characteristics: excellent business economics and an outstanding manager

- Selling fine businesses on “scary” news is usually a bad decision

- In insurance, virtually all surprises are unpleasant

- For Geico: “Our goal is not to widen our profit margin but rather the price advantage we offer customers.”

- In investing, inactivity strikes us as intelligent behavior

- You simply want to acquire, at a sensible price, a business with excellent economies and able, honest management

- You can pay too much for even the best of businesses

- You only must evaluate the companies within your circle of competence

- You only need 2 investment courses:

o How to Value a Business

o How to Think About Market Prices

- Your goal as an investor is to buy, at a rational price, an easily-understandable business whose earnings are virtually certain to be materially higher five, ten, and twenty years from now.

- If you aren’t willing to own a stock for 10 years, don’t even think about owning it for 10 minutes

- It only takes 3 quality companies to invest in to be set for a lifetime.

- Companies are worth more money if interest rates fall and stocks rise

- Everyone should read the talk of Charlie Munger’s speech to the University of California Business School in 1994 before investing

- The larger the amount of capital you work with, the more difficult the job is

- Volatility is a huge plus to the real investor

- The stock market is there to serve you, and not to instruct you.

- As an investor, you should love big swings because it means more things are going to get mispriced

- My idea of understanding a business is that you’ve a pretty good idea where it’s going to be in 10 years

- Gambling may be illegal, but now you can do it through something called derivatives.

- I can hardly imagine a world where the wise people don’t do a lot of reading

- We have no meetings. No committees. No slide presentation. I just read a lot

- “Warren lives one of the most rational lives I’ve ever seen. And it’s almost unbelievable.” – Charlie Munger

- All we do is try to figure out what businesses are going to be worth in ten or 20 years

- Investing is putting out money to get more money back later

- Opportunity costs are a very useful filter for investing

o When someone shows me a business, the first thing I would think about is whether this would be a better investment than Coca-Cola

- If interest rates go higher, the valuation goes down automatically

- The biggest thing to do is understand the business

- The best thing to do is learn from other guys’ mistakes

- “I think most people get very few, what I call, no-brainer opportunities, where it’s just so damn obvious that this is going to work. And since they are very few and they may be separated by periods of years, I think people have to learn to have the courage and the intelligence to step up in a major way when those rare opportunities come by.”- Charlie Munger

- “We don’t pay dividends because we think we can turn every dollar we retain into more than a dollar of market value.” à or dividend tax? J

- Professional sellers of investment advice have an immense vested interest (có quyền lợi lớn)in believing that things that can’t be true are true

- The name of the game is continuing to learn

- We don’t care if the market closes for the next 5 years

- Most of our managers do not need to work for a living. They run their businesses for the same reason Charlie, and I run Berkshire. They love doing it.

- We let our managers run their own operations

- We look for brains, energy, and integrity in people that we work with. If you get that combination and you’re in a decent business, you know, you can own the world

- Everything should be made as simple as possible, but not simpler

- “Why risk losing what you need and have for what you don’t need and don’t have?”

- Borrowed money usually leads to trouble. And it’s not necessary.

- There aren’t that many super businesses in the world.

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StoriesofLife

Summary all public writings Warren Buffett - Part 2

by finandlife29/12/2023 22:26

 

Summary all public writings Warren Buffett

- High returns on equity should retain much or all its earnings so that shareholders can earn premium returns on enhanced capital > ROE > Cost of capital to create value

- “Forecasts are dangerous particularly those about the future.” – Sam Goldwyn

- In the 1981 shareholder letter, Warren Buffett mentioned for the first time: “Charlie and I work as partners in managing all controlled companies.”

- Operating earnings/equity capital = most important yardstick of single-year managerial performance

- Accounting earnings can seriously misrepresent economic reality

- It is our job to select businesses with economic characteristics that allow each dollar of retained earnings to be translated eventually into at least a dollar of market value

- A too-high purchase price for the stock of an excellent company can undo the effects of a subsequent decade of favorable business developments

- Businesses in industries with both substantial over-capacity and a ‘commodity’ product are prime candidates for profit troubles

- Our share issuances follow a simple basic rule: we will not issue shares unless we receive as much intrinsic business value as we give

- Managers who want to expand their domain at the expense of owners might better consider a career in government

- What Buffett prefers to acquire:

1. Large purchases (at least $5 million of after-tax-earnings)

2. Demonstrated consistent earnings power (future projections are of little interest to us, nor are “turn-around” situations

3. Businesses earning good returns on equity while employing little or no debt

4. Management in place (we can’t supply it)

5. Simple businesses (if there’s lots of technology we won’t understand it)

6. An offering price (We will never engage in unfriendly transactions.)

- “We’ve always found a telephone call to be more productive than a half-day committee meeting.”

- “If we can continue to attract managers with the qualities of Ben and Phil, you don’t need to worry about Berkshire’s future”

- The major business principles Buffett uses to maintain the manager-owner relationship:

o Although our form is corporate, our attitude is partnership

o At least four of the five, over 50% of the family net worth is represented by holdings of Berkshire. We eat our own cooking

o Our long-term economic goal is to maximize the average annual rate of gain in intrinsic business value on a per-share basis

o Our preference would be to reach this goal by directly owning a diversified group of businesses that generate cash and consistently earn above-average returns on capital

o Consolidated reported earnings may reveal relatively little about our true economic performance. à báo cáo hợp nhất ?

o Accounting consequences do not influence our operating capital-allocation decisions

o We rarely use much debt, and when we do, we attempt to structure it on a long-term fixed-rate basis

o A managerial “wish list” will not be filled at shareholder expense

o We feel noble intentions should be checked periodically against results. à mọi thứ phải được thể hiện bằng kết quả định kỳ

o We will use common stock only when we receive as much in business value as we give

o We have no interest at all in selling any good businesses that Berkshire owns and are very reluctant to sell sub-par businesses as long as we expect them to generate at least some cash and as long as we feel good about their managers and labor relations.

o We will be candid in our reporting to you, emphasizing the pluses and minuses important in appraising business value

o Good investment ideas are rare, valuable, and subject to competitive appropriation just as good product or business acquisition ideas are

- Book value tells you what has been put in, intrinsic business value estimates what can be taken out

- The record of Chuck Huggins at See’s Candies

- About Geico: its superiority reflects the combination of a truly exceptional business idea and an exceptional management

- We try to attract investors who will understand our operations, attitudes and expectations

- Businesses needing little in the way of tangible assets simply hurt the least in times of inflation

- Asset-heavy businesses generally earn low rates of return – rates that often barely provide enough capital to fund the inflationary needs of the existing business, with nothing left over for real growth, distribution to owners, or for acquisition of new businesses.

- When companies with outstanding businesses and comfortable financial positions find their shares selling far below intrinsic value in the marketplace, no alternative action can benefit shareholders as surely as repurchases

- The companies in which we have our largest investments have all engaged in significant stock repurchases at times when wide discrepancies existed between price and value à MWG in 2024?

- A manager who consistently turns his back on repurchases when these clearly are in the interests of owners, reveals more than he knows of his motivations

- We feel very comfortable owning interests in businesses such as these that offer excellent economics combined with shareholder-conscious management.

- The business achieves this success because it deserves this success - The success of See’s reflects the combination of an exceptional product and an expectation manager, Chuck Huggins.

- You as shareholders of Berkshire have benefited in enormous measure from the talents of GEICO’s Jack Byrne, Bill Snyder, and Lou Simpson

- We buy marketable stocks for our insurance companies based upon the criteria we would apply in the purchase of an entire business

- Most businesses are unable to significantly improve their average returns on equity – even under inflationary conditions

- We behave with Berkshire’s money as we would with our own

- All earnings are not created equal

- You should wish your earnings to be reinvested if they can be expected to earn high returns, and you should wish them paid to you if low returns are the likely outcome of reinvestment

- Outstanding businesses generate large amounts of excess cash

- We don’t have to worry about quarterly or annual figures but, instead, can focus on whatever actions will maximize long-term value

- My preference is for a market price that consistently approximates business value

- Ben Graham told a story 40 years ago that illustrates why investment professionals behave as they do:

o An oil prospector, moving to his heavenly reward, was met by St. Peter with bad news. “You’re qualified for residence”, said St. Peter, “but, as you can see, the compound reserved for oil men is packed. There’s no way to squeeze you in.” After thinking a moment, the prospector asked if he might say just four words to the present occupants. That seemed harmless to St. Peter, so the prospector cupped his hands and yelled, “Oil discovered in hell.” Immediately the gate to the compound opened and all of the oil men marched out to head for the nether regions. Impressed, St. Peter invited the prospector to move in and make himself comfortable. The prospector paused. “No,” he said, “I think I’ll go along with the rest of the boys. There might be some truth to that rumor after all.” Một người thăm dò dầu mỏ đang trên đường đi tìm phần thưởng trên trời thì gặp Thánh Peter với tin dữ. “Bạn đủ điều kiện để cư trú,” Thánh Peter nói, “nhưng, như bạn thấy, khu nhà dành riêng cho những người làm dầu mỏ đã chật cứng. Không có cách nào để ép bạn vào. Sau khi suy nghĩ một lúc, người thăm dò hỏi liệu ông có thể nói bốn từ với những người đang cư ngụ hiện tại không. Điều đó dường như vô hại đối với Thánh Peter, nên người thăm dò khum tay lại và hét lên: “Dầu được phát hiện ở địa ngục”. Ngay lập tức cánh cổng vào khu nhà mở ra và tất cả những người thợ dầu đều hành quân ra ngoài để tiến về vùng nether. Quá ấn tượng, Thánh Peter đã mời người thăm dò chuyển đến ở và tạo cảm giác thoải mái cho bản thân. Người thăm dò dừng lại. “Không,” anh ấy nói, “tôi nghĩ tôi sẽ đi cùng với những chàng trai còn lại. Có lẽ tin đồn đó có phần nào đó là sự thật.”

- Capital gains or losses in any given year are meaningless as a measure of how well we have done in the current year

- Charlie Munger has always emphasized the study of mistakes rather than successes

- Charlie likes to study errors and I have generated ample material for him, particularly in our textile and insurance businesses

- July 1984: close of textile operation Berkshire Hathaway

o It was a bad business at a cheap valuation level

o A textile company that allocates capital brilliantly within its industry is remarkable, but not a remarkable business

o When a management with a reputation for brilliance tackles a business with a reputation for poor fundamental economics, it is the reputation of the business that remains intact

- Warren Buffett focuses on the importance of management repeatedly

- Ben Graham said that the key to successful investing is to purchase shares of good businesses when market prices are at a large discount from underlying business values

- No matter how great the talent or effort is, some things just take time. You can’t produce a baby in one month by getting nine women pregnant

- Book value has served for more than a decade as a reasonable if somewhat conservative proxy for business value

- Charlie Munger and I only have two jobs:

o Attract and keep outstanding managers

§ They work because they love what they do and relish the thrill of outstanding performance. They unfailingly think like owners

o Capital allocation

- We intend to continue our practice of working only with people whom we like and admire.

- Our returns are certain to drop substantially because of our enlarged size

- Chuck rightfully measures his success by the satisfaction of our customers

- The business described in this section can be characterized as having very strong market positions, very high returns on capital employed, and the best operating management à Buffett = quality investor!

- Fechheimer is exactly the sort of business we like to buy. Its economic record is superb; its managers are talented, high-grade, and love what they do; and the Heldman family wanted to continue its financial interest in partnership with us.

- In effect, the good news in earnings follows the good news in principles by 6-12 months

- We have no idea – and never have had – whether the market is going to go up, down, or sideways in the near- or intermediate-term future

- We simply attempt to be fearful when others are greedy and greedy when others are fearful

- Stocks can’t outperform businesses indefinitely

- We consider the owner earnings figure to be the relevant item for valuation purposes à reported earnings + depreciation, depletion, amortization, and certain other non-cash changes

- Managers and owners need to remember that accounting is but an aid to business thinking, never a substitute for it

- We own remarkable businesses, and they are run by even more remarkable managers

- Experience, however, indicates that the best business returns are usually achieved by companies that are doing something quite similar today to what they were doing five or ten years ago.

- A business that constantly encounters major change also encounters many chances for major error

- Only 25 of the 1,000 companies met two tests of economic excellence - an average return on equity of over 20% in the ten years, 1977 through 1986, and no year worse than 15%. These business superstars were also stock market superstars:

During the decade, 24 of the 25 outperformed the S&P 500.

o Most use very little leverage compared to their interest-paying capacity

o Most sell non-sexy products or services in much the same manner as they did 10 years ago

- Our managers have produced extraordinary results by doing rather ordinary things – but doing them exceptionally well

- Our goal is to do what always makes sense for Berkshire’s customers and employees

- In a commodity-like business, only a very low-cost operator or someone operating in a protected, and usually small niche can sustain high profitability levels

- What we learn from history is that we do not learn from history

- Whenever Charlie and I buy common stocks for Berkshire's insurance companies (leaving aside arbitrage purchases, discussed later) we approach the transaction as if we were buying into a private business.

- When investing, we view ourselves as a business analysts - not as market analysts, not as macroeconomic analysts, and not even as security analysts.

- Story about Mr. Market:

- We would rather achieve a return of X while associating with people whom we strongly like and admire than realize 110% of X by exchanging these relationships for uninteresting or unpleasant ones

- We try to buy not only good businesses but ones run by high-grade talented and likeable managers

- Good business or investment decisions will eventually produce quite satisfactory economic results, with no aid from leverage

- The major problem we face is a growing capital base

- We look for outstanding businesses run by people we like, admire, and trust

- Focus on good returns on invested capital

- About old managers: “Superb managers are too scarce a resource to be discarded simply because a cake gets crowded with candles”

- Because of the commodity characteristics of the industry, most insurers earn mediocre returns

- Charlie and I appreciate enormously the talent and integrity these managers bring to their businesses

- They love their business, they think like owners, and they exclude integrity and ability

- When we own outstanding businesses with outstanding management, our favorite holding period is forever

- We will continue to concentrate our investments in a very few companies that we try to understand well

- We agree with Mae West: “Too much of a good thing can be wonderful”

- About EMH: it’s an enormous advantage to have opponents who have been taught that it’s useless to even try

- Our goal is to attract long-term owners who, at the time of purchase, have no timetable or price target for sale but plan instead to stay with us indefinitely

- We will keep most of our major holdings, regardless of how they are priced relative to intrinsic business value

- From Berkshire’s present base of $4.9 billion in net worth, we will find it much more difficult to average 15% annual growth in book value than we did to average 23.8% from the $22 million we began with

- Imagine that Berkshire had only $1, which we put in a security that doubled by yearend and was then sold. Imagine further that we used the after-tax proceeds to repeat this process in each of the next 19 years, scoring a double each time. At the end of the 20 years, the 34% capital gains tax that we would have paid on the profits from each sale would have delivered about $13,000 to the government and we would be left with about $25,250. Not bad. If, however, we made a single fantastic investment that itself doubled 20 times during the 20 years, our dollar would grow to $1,048,576. Were we then to cash out, we would pay a 34% tax of roughly $356,500 and be left with about $692,000.

- Most of these managers have no need to work for a living: they show up at the ballpark because they like to hit home runs

- It is great fun to be in business with people you have long admired

- What is best for their owners is not necessarily best for managers

- We are willing to look foolish if we don’t feel we have acted foolishly.

- We continue to be blessed with extraordinary managers at our portfolio companies

- We only want to link up with people whom we like, admire, and trust

- In effect they are trusting us to be intelligent owners, thinking about tomorrow instead of today, just as we are trusting them to be intelligent managers, thinking about tomorrow as well as today

- But as happens in Wall Street all too often, what the wise do in the beginning, fools do in the end

- Whenever an investment banker starts talking about EBITDA, zip up your wallet

- My first mistake, of course, was in buying control of Berkshire. I was enticed to buy it because the price looked cheap. I call this the “cigar butt” approach to investing. Unless you’re a liquidator, that kind of approach to buying businesses is foolish. Never is there just one cockroach in the kitchen. Time is the friend of the wonderful business, the enemy of the mediocre. You might think this principle is obvious, but I had to learn it the hard way. It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price

- Good jockeys will do well on good horses, but not on broken-down nags. I’ve said many times that when a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact. I just wish I hadn’t been so energetic in creating examples

- Charlie and I have not learned how to solve difficult business problems. When we have learned to avoid them. It is because we concentrated on identifying one-foot hurdles that we could step over rather than because we acquired any ability to clear seven-footers à tránh những rắc rối thay vì vào rồi giải quyết rắc rối

- I thought then that decent, intelligent, and experienced managers would automatically make rational business decisions. But I learned over time that isn’t so.

- I made some expensive mistakes because I ignored the power of imperative (sức mạnh của mệnh lệnh)

- After some other mistakes, I learned to go into business only with people whom I like, trust, and admire. As I noted before, this policy in itself will not ensure success. However, an owner – or investor- can accomplish wonders if he manages to associate himself with such people in business who possess decent economic characteristics. We’ve never succeeded in making a good deal with a bad person

- Some of my worst mistakes were not publicly visible. These were stock and business purchases whose virtues I understood and yet didn’t make

- Our consistently conservative financial policies may appear to have been a mistake, but in my view were not.

o We wouldn't have liked those 99:1 odds - and never will. A small chance of distress or disgrace cannot, in our view, be offset by a large chance of extra returns. If your actions are sensible, you are certain to get good results; in most such cases, leverage just moves things along faster.  harlie and I have never been in a big hurry: We enjoy the process far more than the proceeds - though we have learned to live with those also.

- Berkshire’s 26-year record is meaningless in forecasting future results

- Charlie and I would hope that Berkshire sells consistently at about intrinsic value

- We own exceptional businesses that are worth considerably more than the values at which they are carried on our books

- Our extraordinary returns flow from outstanding operating managers, not fortuitous industry economics

- Charlie and I always have preferred a lumpy 15% return over a smooth 12%

- We have no interest in purchasing poorly-managed companies at a cheap price. Instead, our only interest is in buying into well-managed companies at a fair price

- Investors who expect to be ongoing buyers of investments throughout their lifetimes should adopt a similar attitude toward market fluctuations; instead many illogically become euphoric when stock prices rise and unhappy when they fall. They show no such confusion in their  eaction to food prices: Knowing they are forever going to be buyers of food, they welcome falling prices and deplore price increases. (It's the seller of food who doesn't like declining prices.)

- We will be buying businesses - or small parts of businesses, called stocks - year in, year out as long as I live (and longer, if Berkshire's directors attend the seances I have scheduled). Given these intentions, declining prices for businesses benefit us, and rising prices hurt us.

- It’s optimism that is the enemy of the rational buyer

- In a business selling a commodity-type product, it’s impossible to be a lot smarter than your dumbest competitor

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StoriesofLife

C Bond đáo hạn đến 2024

by finandlife26/12/2023 20:45

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Economics

DISCLAIMER

I am currently serving as an Investment Manager at Vietcap Securities JSC, leveraging 16 years of experience in investment analysis. My journey began as a junior analyst at a fund in 2007, allowing me to cultivate a profound understanding of Vietnam's macroeconomics, conduct meticulous equity research, and actively pursue lucrative investment opportunities. Furthermore, I hold the position of Head of Derivatives, equipped with extensive knowledge and expertise in derivatives, ETFs, and CWs.

 

To document my insights and share personal perspectives, I maintain a private blog where I store valuable information. However, it is essential to acknowledge that the content provided on my blog is solely based on my own opinions and does not carry a guarantee of certainty. Consequently, I cannot assume responsibility for any trading or investing activities carried out based on the information shared. Nonetheless, I wholeheartedly welcome any questions or inquiries you may have. You can contact me via email at thuong.huynhngoc@gmail.com.

 

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