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One Up On Wall Street SUMMARY Conclusion Chapter 20 – 50,000 Frenchmen Can Be Wrong

The market, like individual stocks, can move in the opposite direction of the fundamentals over the short term Be optimistic about America and investing in general Market declines are great opportunities to buy stocks in companies that you like You can never predict the market It takes years, not months to produce big results You can make serious money by compounding a series of 20-30 percent gains in Stalwarts Stock prices often move in opposite direction but the long term, the direct and sustainability of profits will prevail Buying a company just because its cheap is a losing strategy Selling an outstanding fast grower because its stock slights overpriced is a losing technique You don’t lose anything by not owning a successful stock Stock doesn’t know that you own it Don’t be attached to a winner Don’t stop monitoring the story If you don’t think you can beat the market then buy a mutual fund Keep an open mind to new ideas Read One Up On Wall Street by Peter Lynch Chapter 19 full su...
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The Essays of Warren Buffett SUMMARY Chapter 4 – Common Stock

Fear and greed will forever occur in the investment community. Be fearful when others are greedy, be greedy when others are fearful. 

A. The Bane of Trading : Transaction Costs
All investors feel richer when stocks roar. An owner can only exit when someone else take his place. Owners are getting paid lesser somewhere around 80% after losing the rest in high transaction fees. We want Berkshire's stock to trade consistently at a price rational to it's intrinsic business value. Transaction costs are very heavy for active stocks. Listing Berkshire in NYSE will further reduce the cost for Berkshire owners by narrowing the market maker's spread. 

B. Attracting The Right Sort of Investor
Our primary goal in listing on the NYSE is to reduce transaction costs and this goal is being achieved. We do not want to maximize the price at which Berkshire trades. We also wish for very little trading activity. Our goal is to attract long-term owners. 

C. Dividend Policy and Share Repurchases
A company that consistently distributes restricted earnings is destined for oblivion unless equity capital is otherwise infused. We will not repurchase shares unless we believe Berkshire stock is selling well below intrinsic value. 2 conditions must be met. A company has ample funds to take care of operational and liquidity needs of it's business. Second is the stock selling below it's intrinsic value. 

D. Stock Splits and Trading Activity
One of our goal is to sell Berkshire Hathaway stock at a price rationally related to it's intrinsic business value. If the owners are irrational then the prices will be silly going up and down. A hyperactive stock market is the pickpocket of enterprise. 

E. Shareholder Strategies
To shareholders who wants to give away stocks.
1st: Married shareholders can give up to $20,000 annually to a single recipient.
2nd: If Berkshire is selling for $12,000 and one wishes to make only $10,000 gift, then sell the stock to the giftee for $2,000.
3rd: You can establish a partnership with people to whom you are making gifts and fund it with Berkshire shares and give percentage interests in the partnership away each year. Do consult with your own tax advisor before taking any action. 

F. Berkshire's Recapitalization
Our common stock will be designated as Class A and Class B common stock. A B share will have 1/200th of the vote of an A share. The B will not be eligible to participate in Berkshire's shareholder designated charitable program. Each Share A will become convertible at any time into 30 shares of B. This will not extend in opposite direction. Class A stock will entitle it's holders to full voting rights and will be superior to the Class B shares. 

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