Oct 30th, 2016
By: Steve Jordon
Is Waste Management Inc. a potential Berkshire buy?
A pitch of that idea by University of Nebraska at Omaha MBA student Hallie Hanlon-Ward won a $1,000 scholarship to attend the Genius of Warren Buffett course at UNO.
Seven students competed for the award by compiling information on companies they think would fit Berkshire’s acquisition requirements and then making a presentation to a group of judges.
There’s some precedent here.
Last year’s winning pitch was on Amerco, the parent company of U-Haul and the subject of a Barron’s magazine article last week that agreed that it has all the characteristics of a Berkshire company.
In 2012 a student pitched John Deere, and before long the farm implement dealer joined Berkshire’s stock portfolio. Coincidence?
Students who take the Buffett course, which is taught by Buffett author and speaker Robert Miles, make investing decisions for a $55,000 portfolio, aiming to hold each stock for at least 10 years.
Annual event attracts investors from around the world
October 10th, 2016
UNO students see what he saw
October 9th, 2016
Source: Omaha World Herald
By: Steve Jordon
Students in a University of Nebraska at Omaha course look at the same documents that Buffett had
when he made some of his big investments.
The trick, instructor Robert Miles told Jack Williams of NET News, is that the names of the companies are whited out and the students have to figure out the value of the company, as if they were planning to invest.
By that point in the class, titled, “The Genius of Warren Buffett,” the students have learned how to mimic Buffett’s system of calculating value from earnings, assets, debt and other publicly available numbers.
The student who comes closest to the actual value gets to explain to the class how it happened, Miles said, and sometimes the students can use the lesson to make real-life investment decisions on their own.
The course has been part of UNO’s executive MBA program since 2011 and is taken both by graduate students and as a noncredit course by people who just want to learn about Buffett and Berkshire. It features some local Berkshire executives and other guest speakers, including me.
There’s even a discussion of Buffett’s mistakes.
“He’s made mistakes on the investment side,” Miles said. “He’s quantified $100 billion mistakes, and he’s made mistakes on the management side to where he’s had to fire people. Some have had to resign. ... So he’s not perfect, but it’s still worth a study.”
Studying The "Genius Of Warren Buffett"
October 5th, 2016
Source: Nebraska PBS and NPR Stations
By: Jack Williams for NET News
An executive MBA course at the University of Nebraska at Omaha College of Business Administration is giving students an inside look at how one of the world’s foremost investors operates. They get to look at the same financial documents he looked at when he decided to buy companies.
There’s not much debate that Warren Buffett is one of the world’s foremost investors, a man who has
spent more than 50 years building a $360 billion conglomerate.
So it makes sense that a business school in his hometown of Omaha would want to tap into that resource, to try to figure out what makes Buffett and his Berkshire Hathaway company so unique.
The result? It’s a class that’s all things Buffett.
It should come as no surprise the first thing you see inside the University of Nebraska at Omaha College of Business Administration is a large portrait of Warren Buffett.
He lives just down the street and taught at the school more than 50 years ago. It’s also the home of a Buffett 101 of sorts.
“Buffett says forget I bought it, you forget you sold it,” said Robert Miles, adjunct instructor of the graduate level course he started at UNO in 2011. “Run it as if it’s the only asset you and your family will have for the next 50 years.”
Miles has written several books about Buffett and spends about 40 hours researching each of the slides he uses in his presentation.
The takeaway for his students? He says they become better evaluators of what a company is worth by using the same financial data and accounting reports Buffett used when he purchased a company.
“We’ve whited-out that it’s Coca-Cola. We’ve whited-out that it’s 1988 and we ask everyone to value,” Miles said. “You become a better evaluator of businesses knowing what metrics to look at, because we’re doing 15-20 actual valuations of businesses that Warren has purchased, using the same data.“
The 36-hour course is taught on a couple of weekends in the fall and again in the spring, around the annual Berkshire Hathaway stockholder meeting in Omaha.
More than 200 executive MBA student and others have taken the course, some three or four times.
Miles, who’s a Berkshire Hathaway stockholder himself, says simple things about Buffett’s investment philosophy stand out, concepts students pick-up on quickly.
“I asked him when he was going to write the most definitive book on investing. He said “Bob, it’s already been written, that we as human beings, we want things to be more complicated than what they need to be,” Miles said. “He’s created the fourth or fifth largest conglomerate business in the United States without the aid of a calculator or a computer. He said you don’t need it. He’s done all this by not micromanaging his managers.”
Melissa Glenn is a current executive MBA student at UNO and also works full-time with the Greater Omaha Chamber of Commerce. She took the Buffett class in 2015 and says she learned a lot about what goes into Berkshire Hathaway’s investment process.
“They look at their formula and that is their secret sauce,” Glenn said. “But they don’t forget about the things that really make a business tick. Sometimes it is all about the numbers, but you have to take it a step further and look at the people aspects as well.”
The Buffett class is open to both executive MBA students and lifelong learners at UNO, who take the course, but don’t earn credits.
Bill Swanson, executive director of the executive MBA program at UNO, says students get to study the less obvious parts of Buffett’s investment process.
“Buffett is known for his investments, but maybe what he isn’t as well known for is the things he goes through, the evaluations that he goes through when he selects companies to buy,” Swanson said. “So having people go through our program who are executives or soon-to-be executives understand that process can be very, very valuable to them.”
Swanson says the class can be transformative for some students.
“One individual in particular told me that through the things he learned on the investment side, he was able to make investments and through the profits he made through those investments, pay for his executive MBA, which is a $45,000, $48,000 deal,” Swanson said.
An important part of the Buffett class is a study of his mistakes, and there have been a few.
Most recently, the company has had to deal with the Wells Fargo Bank scandal. Berkshire Hathaway owns about ten percent of Wells Fargo and has taken a sizable financial hit over the past month.
“He’s made mistakes on the investment side,” Robert Miles said. “He’s quantified $100 billion mistakes and he’s made mistakes on the management side where he’s had to fire people. Some have had to resign. Some have gone to jail. So he’s not perfect, but it’s still worth a study.”
Buffett actually came to the first class in 2011 and talked to students. He hasn’t been back since, but has been supportive of the course and Miles, who says he got a unique bit of investment advice from the Oracle of Omaha himself.
“Buy my stock on the worldwide news of my death,” Miles related. “Then he thinks Berkshire Hathaway will go down 20-25 percent. He says if it goes up, he’s going to be very upset.”
Robert Miles: On Berkshire Hathaway, the Wisdom of Warren Buffett, and Achieving Your Dreams
August 30th, 2016
By: Marco LeRoc
Recently, Robert Miles and I sat down to talk shop: Shop, in this case, being what it means to be a
shareholder in Berkshire Hathaway, Miles’ journey as a Warren Buffett expert scholar, and the life
lessons to be learned from the game “Bridge”.
Miles is a Berkshire Hathaway shareholder and the author of three books, all of which explore Berkshire Hathaway and the life of Warren Buffett—one of the most well-known investors in the world.
As Robert and I (Marco LeRoc) talk, you’ll learn: What it’s like to take part in Miles’s world-renowned course, The Genius of Warren Buffett Why Miles believes that character is a personal choice How Warren Buffett advises his shareholders to get the most out of their stocks Why Miles believes that internships and a wise choice in mentors can make or break the college experience.
Robert and I (Marco LeRoc) talk about the importance of internships in determining a career path, why voracious reading is a direct pathway to success, and why it’s foolish to wait until you’re rich to achieve your dreams.
And why is that?
In Miles’ words: “You should do what you would do if you were already rich. Waiting to do something until you’re rich…is like saving up sex for old age.”
US writer Robert Miles ponders local allure of Sage of Omaha
August 17th, 2016
By: Glenda Korporaal
Writer Robert Miles at the Grant Thornton office in Sydney yesterday. Picture: Adam Yip
One of Warren Buffett’s long-time followers, US writer Robert Miles, wonders why so many Australian
investors are followers of the US billionaire.
“What intrigues me about Australia is how well Australia is represented in the Olympics per head of population,” Miles told The Australian yesterday at a lunch briefing in Sydney organised for clients of accounting firm Grant Thornton.
“Australia has a small economy, yet it is in the top five or six in terms of the medals,” says Miles, who has been following Buffett for the past 17 years and written several books on his investment philosophy.
“Likewise, using that Olympic comparison, the percentage of Aussies who get Buffett, who get Berkshire Hathaway and value investing, is disproportionate to the rest of the world. I see an increasing number of Australian investors at the Berkshire Hathaway annual meeting in Omaha every May and at the investment seminars I hold before the meeting.”
Miles estimates there were 30 Australians in the dinner for 300 people held for attendees of his value investing seminars ahead of the Berkshire Hathaway meeting this year. “Ten per cent is a big number for a small country. For some reason Australians get Buffett more than people from any other country apart from Americans,’’ he says.
Miles rejects the idea the growth of the Australian funds management industry and self-managed superannuation funds in Australia has been behind the growth of local interest in Buffett.
He argues this doesn’t necessarily mean they are the type of people who like value investing and are keen to learn more about Buffett. “Maybe it is just that they like learning from the best,” he says. “Maybe it is that they like his way of thinking.”
Mark O’Hare, a senior partner with Grant Thorton’s Brisbane office, a Buffett follower himself, told the seminar that it was the similarity between Buffett’s down to earth, mid-Western views, his long-term approach to investing and his support for ethical business practices that appealed to Australian investors — alongside his outstanding investment success.
Miles, whose first book on Buffett was entitled 101 Reasons to Own The World’s Greatest Investment: Warren Buffett’s Berkshire Hathaway, estimates an investor who put $US6500 ($8460) into Berkshire Hathaway shares in its early days in 1965 would now be worth more than $US100 million.
Miles points out Buffett’s investment philosophy is to look for companies that are well managed, with sound, predictable long-term earnings prospects, and are well priced. He says Buffett does not look at macro-economic trends or interest rate movements but takes a micro-economic view of individual companies. He says Buffett, a long-time Democrat, has become increasingly involved in the present US elections, calling out Republican candidate Donald Trump for being a bully and offering to release his own tax return if Trump will release his.
The Genius of Warren Buffett Social
August 14th, 2016
Free Event. Friday, Sept. 9, 2016, 5 p.m. – 7 p.m at Mammel Hall. RSVP by Tuesday, Sept. 6, 2016 to Erin Hockinson 402.250.2139 firstname.lastname@example.org. Read the announcement.
|5:00 p.m. – 5:30 p.m.||Registration, reception, light refreshments and appetizers|
|5:30 p.m. – 5:35 p.m.||Dean Lou Pol, UNO College of Business Administration|
|5:35 p.m. – 5:40 p.m.||Bill Swanson, Director, UNO Executive MBA Program|
|5:40 p.m. – 5:45 p.m.||Melissa Glenn, Manager Member Services, Omaha Chamber, UNO EMBA Candidate, GOB F15 Graduate|
|5:45 p.m. – 6:05 p.m.||Robert Miles, UNO Adjunct Instructor, Genius of Warren Buffett Course, Preview, Highlights, Investment and Management Principles and Methods of Warren Buffett|
|6:05 p.m. – 6:10 p.m.||Adrienne Fay, Director of Marketing and Public Relations, Borsheims, Guest Lecturer, Genius of Warren Buffett Course|
|6:10 p.m. – 6:30 p.m.||Robert Miles, UNO Adjunct Instructor, Genius of Warren Buffett Course, Preview, Highlights, Investment and Management Principles and Methods of Warren Buffett|
|6:30 p.m. – 6:35 p.m.||Ivan Munteanu, GOB F11 Graduate, Investment Stock Pitch|
|6:35 p.m. – 6: 45 p.m.||Audience Q & A|
|6:45 p.m. – 6:50 p.m.||Door Prizes; Borsheims Corporate Gifts, Grand Prize – One Registration to Genius of Warren Buffett EMBA Fall 2016 Program (must be present to win)|
|6:50 p.m. – 7:00 p.m.||DQ Dilly Bar Reception|
FREE Registration but limited seating. RSVP by Tues, Sept. 6, 2016 Erin Hockinson – email@example.com
Annnouncing Warren Buffett Wealth Presentations in Australia and NZ
August 6th, 2016
Melbourne, Monday, 15 August, 6 pm - 8 pm
RSVP: Send reply email
Sydney, Tuesday, 16 August, 6 pm - 8 pm
Details and RSVP on www.aicc.org.au
Brisbane, Thursday, 18 August, 6 pm - 8 pm
Details and RSVP on www.aicc.org.au
Auckland, NZ, Tuesday, 23 August, 6 pm - 8 pm Location: Holly Trinity Cathedral, Parnell, Auckland RSVP: Send reply email
Buy Apple along with Berkshire?
May 16, 2016
Long-time Warren Buffett watchers Vahan Janjigian, Greenwich Wealth Management CIO, and Robert Miles, "The Warren Buffett CEO" author, discuss Berkshire Hathaway's new stake in Apple.
Buffett expert Bob Miles: Why I’ve been buying Berkshire shares lately
March 10, 2016
Author Robert Miles possesses unique insights into what makes Warren Buffett tick. His books are among the few personally endorsed by the Oracle of Omaha, and over the past two decades Miles has researched ever deeper into the genius of the world’s greatest investor. In this interview with fellow Buffett fan Alec Hogg of Biznews.com, Miles looks back on the recent letter to Berkshire shareholders, ahead to next month’s AGM – and explains why he has been accumulating more Berkshire shares.
When it comes to people who know Warren Buffett, few are better qualified than Bob Miles. His book, ‘The Warren Buffett CEO’ is one of the best read of all the books written about Buffett. Bob joins us now on the line from the US. Before you went ahead with this book, did you have any idea that Warren Buffett himself was going to give it the glowing endorsement that we duly saw?
He gave me the idea when he said, enough writing about him, that the real story of Berkshire Hathaway is all the managers that make up the company and the subsidiaries, so that wasn’t a total surprise to me because the genesis of the book came from him to begin with.
How many copies has it sold?
It’s by now, in hard cover over 50 000 copies and then in paperback, I’m guessing over a 100 000 copies but I’m not sure what the latest count is.
It’s certainly one of the classics on Warren Buffett and it teaches one a whole lot about it. letter itself no doubt, given your understanding of Berkshire Hathaway, you look forward to this interest.
Yes I do and I thought it was a good letter, although some of the jokes he used in the letter, he’s used before, but record earnings, records for Berkshire Hathaway as well as for the energy company as well as the railroad company. The book value is up but the price is down which is not uncommon ten times throughout its 51-year history. The book value has indeed gone up although the price has gone down but over time, the price will reflect the turnings.
You say he’s been repeating some of the jokes. It’s unusual to get jokes in the first place in an general meeting but that’s part of the whole charm isn’t it?
Yes it is. It’s kind of the mid-western folk-ism that Buffett is known for to kind of warm you up with a zinger and then drive home his real point that he’s trying to make. I look forward to those. I was a little disappointed on the jokes but certainly not disappointed on the overall tone of the letter, which basically was good news for a long-term shareholder.
Bob, I’d like to explore something that was written about Phil Fisher, one of the major influences Buffett’s life. His son wrote and there have been others who have said as well that Fisher started losing it when he got into his eighties. Do you know that Buffett is now in his eighties as well? Is there any fear of that?
He’s asked his children, he has three children, their responsibility is to come to him as a group and to say, dad you’ve lost it, and it’s time for you to step down. He jokingly says that if one of them comes to him then they’re out of the will but if they all come together, he will honour them and step down. His children are charged with the responsibility to making sure that his mental faculties are top notch but I think that if you come to the annual meeting or this year your listeners will be able to tune in online and listen to him. I think your listeners will be able to make up their own minds as to whether or not Warren is at the top of his game at 85 as he was when he first took over manager Berkshire Hathaway at the age of 35.
That webinar or the webcast is a first. Up until now, you weren’t even allowed to record anything that went on in the meetings. Do you think it’s going to have an impact on the attendance?
Yes, I do. I was a little bit surprised actually because I felt as though he didn’t allow recordings or broadcasting from the annual meeting because he wanted his shareholders to come and buy the products of Berkshire Hathaway from See’s Chocolate to Fruit of the Loom Underwear. I do think attendance will be down but they were busting at the seams as you’ve seen over the many years that you’ve attended the annual AGM that they’re stretching in hotel capacity and Renault Car capacity and bursting at the seams. Mostly it’s a good thing. I’m sure it is otherwise he wouldn’t have done it.
More people could get exposed to his wisdom but he also has gone on a few times in the last few years in the annual letters about the profiteering of local hoteliers and the airline companies and so on. Hopefully this is going to tone that down a little or do you think it’s not really going to have that impact.
I don’t think it’s going to have that big of an impact. He has suggested in the past that shareholders fly into a nearby city where rates are cheaper. He’s also promoted an Airbnb, where people have been able to list their own homes to rent during the Berkshire weekend, which is, I think the second largest event in Omaha Nebraska, second only to the US College Worlds Series of Baseball but it’s a fun weekend. I look forward to it every year.
It’s always fun to see old faces and to network and to see long-term shareholders from year to year and to see Warren in action. This year we have the Buffett family, Susie and Peter coming to a preconference to talk about their philanthropy and the challenges of giving money away. Warren’s initial thought was to build it up and then have his wife, their mother give it away but she pre-deceased him and now it’s the children’s responsibility and they’ve had their challenges in giving away money. It hasn’t been as easy as one might think.
What about Howard? He’s the one of the three, the one that people know best. He is in fact a permanent resident of this country, a farmer here. He doesn’t spend as much time here as he does at home in the United States. Is he also having difficulty in giving away the money that is in his foundation?
Howard is a question mark in terms of his participation because he’s on the board and he is the likely successor to his father of Berkshire Hathaway but his interest of course is farming and helping with clean water and agriculture throughout the world, particularly in Africa. I don’t know that he’s had the same challenges as Susie and Peter whose focus seems to be more on helping out young women, empowering them, and helping them throughout the United States as well as the world.
Bob, you know the family well. Why the fascination? Where did it all start? When did you begin as a Berkshire shareholder and then the interest developing from there?
I first read Roger Lowenstein’s excellent biography, ‘Buffett: The Making of an American Capitalist’ and it rang true to me, a common sense approach, a businessman’s approach to owning a business long-term and I went out to the AGM and in 1995, about 20 years ago and it made sense to me. I saw long-term shareholders who were happy and smiling and I saw common sense products and services and it rang true to me and it felt like home.
Is that when you started investing in 1995?
I did. It’s when the A shares were split into one thirtieth to the B shares, sometimes known as Baby B’s. The A shares then were $30,000.00 and the B shares were first issued as $1000.00. The B shares have since been split another 50 times. The B shares are one fifteenth hundredth the A shares. It entitles an owner all the same rights as an A shareholder. It’s just your voting is diluted a little bit more but you can still attend the AGM, you can still bring three friends and earlier this year the B shares were trading near the point where Warren would purchase them and the board has authorised us to repurchase them at about 120 percent of its book value. Approximately $100.00 per B share would be book value at your end and they were trading earlier at about $124.00 to $125.00. Very close to when Warren would purchase the stock himself, which I suggest is always a good time to buy the stock, is when Warren’s buying it.
Indeed, but it’s not much above $135.00 at the moment, round about that level. It seems as though there’s a good floor if you say that round $125.00, the company itself would be coming in to buy back its shares. Are you accumulating more or if not yourself, suggesting to others they do so?
Yes, I have recently purchased Berkshire Hathaway and I do also think that the Kraft, Heinz ownership is not properly reflected in its balance sheet because of unique accounting rules. It’s listed on the books for about $16bn but actually has a market value of $24bn, so there’s about $8bn just in the Kraft, Heinz deal that is not accurately reflected on the balance sheet of Berkshire Hathaway because of some inexplicable accounting rule as per how it has to be listed that’s why I do, excellent value.
In the past year, the biggest deal ever in Berkshire’s history was done with Precision Parts. Are you expecting that Warren is going to focus a lot of attention on this and explain to shareholders why he did this deal at the AGM?
Yes, I’m sure he will be asked about it. He said in this year’s letter that he would explain that deal further because it closed early this year as did his takeover of Duracell Battery, which is the largest battery manufacturer and distributor in the world. I’m sure he’ll talk about that as well.
At the time of the gathering of Berkshire Hathaway Pilgrims to Omaha, a couple of days beforehand, you’ve been running a value investor conference. Where did that idea come from because and when did you start it?
I started it 13 years ago as a way to entertain and educate international shareholders, many from South Africa. I think South Africa represents our largest representatives outside the US along with Australia and New Zealand. Something about the Southern Hemisphere seems to get Berkshire Hathaway more than the Northern Hemisphere. Wesco Financial used to host its annual meeting in Los Angeles with Charlie Munger as its chairman, now wholly owned subsidiary of Berkshire Hathaway on the Wednesday following the Berkshire meeting.
Many South Africans would fly to Nebraska to attend Berkshire’s AGM and then on Monday would fly to Los Angeles to attend the AGM in Los Angeles of Wesco Financial in order to hear Charlie outside the shadow of Warren Buffett, who would wax and share his thoughts without the screen of Warren Buffett and the conference was born by occupying those two or three days in between the Berkshire annual meeting and the Wesco Financial meeting. Then when Wesco Financial was acquired in its entirety by Berkshire, we moved the conference from Los Angeles to Omaha.
You do get a very good turnout on the conference. How long in advance do you start planning and whom do you have this year?
We plan more than a year in advance. We’re already lining up speakers for next year, which will be our 14th year. We have four events for the whole week leading up to Berkshire Hathaway starting with a ‘one of a kind’ course. It’s The Genius of Warren Buffett, where I teach 24 hours’ worth of Buffett from his investment methods to his management techniques to his corporate governance and many subsidiary managers come in and talk to the participants of the course about their subsidiaries. Whether it be insurance or the furniture store, even Susie Buffett comes in and talks about charity and answers any question asked of her in terms of growing up Buffett and the unique and funny stories she tells about her father. From there we do a summit and then we do the Industria Conference and then we also do a dinner, the Thursday night before the AGM.
The fascination doesn’t end. People still want to come to The Genius of Warren Buffett. They still want to find out about him. Why?
Because of his record I would think. He’s beaten the S&P500 over the past 51 years by 144 times on a cumulative basis. He lives in the same house that he purchased when he was 28 years old. He has 360 000 employees but only 25 at headquarters. He drives his own car, he doesn’t have a wall around his modest home, he lives a pretty simple life, and he pays himself $100,000.00 per year. He doesn’t believe in stock options, he eats at McDonalds, he drinks Coca-Cola and a Cherry Coke, and he’s just a relatable billionaire next door I guess.
You talk about the high walls or the absence there of any walls around his house, that’s something very foreign in South Africa but the fascination continues and even when he goes, even when he’s gone Berkshire Hathaway will still have an annual general meeting but I presume that at that point in time Omaha won’t be quite as full.
Yes, I’ve speculated as to what would happen. Some believe that it will continue on. There will be a fascination. Certainly the following year after Warren retires, which he defines as five years after his death, is when he plans to retire. There will be a fascination for the new managers taking over and then it may trickle off, I guess to be determined but it’s certainly a worldwide phenomenon, continues to amaze me every year over the past 20 year. When I first went, I think there were 7000 or 8000 people in attendance. Every year it has grown but this year we have the webcast, so we’ll have to see what the AGM looks like but registrations for all our events are on pace to sell out. I assume Berkshire Hathaway’s attendance will be at the same levels as last year even with the webcast.
If you had owned Berkshire Hathaway shares for any period of time or in the length of period of time, a webcast is not going to deviate you and certainly not going to worry you too much as far as the finances are concerned. Bob, to close off with, you did mention that once Warren Buffett has gone, his son Howard is due to take over as chairman. How do you think the company will change with a different Buffett in the chair?
I don’t think it will change. I asked Warren why somebody else hasn’t created another Berkshire Hathaway and he said that the culture is in place, and if you dropped him at the age of 35 into IBM (his example); the culture was so entrenched that he would not be able to change it. Even at the age of 35, even with his skillset of capital allocation and hands-off management.
I believe his son, as a non-executive chairman’s total responsibility is to make sure the culture that his father has lovingly put together stays in place, that the subsidiaries will not be sold and that all the excess capital will be sent to Omaha for the succeeding investment, cheap investment officers to re-allocate in part to common shares in the stock market and in whole in the purchase of wholly owned subsidiaries and to leave those managers alone. I’m very confident as a long-term shareholder that, that culture will stay in place because there will be people who are currently CEO’s. If they’re suddenly micro-managed, they’re going to hand the keys to the successor, and say, I’m retiring, I’m worth $100m on average. Some are billionaires, go ahead and you run the business. I don’t think it’s going to happen but certainly there are a lot of naysayers out there.
Well a wonderful legacy for Warren E Buffett and we were talking to Robert Miles, one of the experts on Buffettology. He also runs the Value Investor Conference in Omaha in the week ahead of the Annual General Meeting.
Najarian: Buffett should take a hard look at IBM
Monday, 29 Feb 2016
Discussing Warren Buffett's position in IBM with Jon Najarian of OptionMonster.com and Robert Miles, author of "The Warren Buffett CEO."
Want to invest like Warren Buffett? A UNO class puts students up to the task, and a $50K fund tests out their picks
January 4, 2016
Source: Omaha World Herald
By Steve Jordon / World-Herald staff writer
Susie Buffett is one of several guest speakers in Robert Miles’ class, the Genius of Warren Buffett. The students have about 36 hours of training to make their stock picks.
Students studying Warren Buffett’s investment philosophy have picked 10 companies that they think he
would like, and a special $50,000 portfolio fund at the University of Nebraska Foundation puts up
the money to see if they’re right.
With Buffett’s concepts in mind, teams of graduate students at the university’s Omaha business school compile information about companies that might attract investments by Berkshire Hathaway Inc., the conglomerate that Buffett heads.
If a team’s research report earns a top grade, the portfolio buys shares in the company, using the donated money to give the students a real-life chance to invest like Buffett.
Since the investment fund started in the fall of 2013, seven of the 10 choices are in the red, including one that has dropped by half and two that are down by one-third. The biggest winner of the bunch has gained about 19 percent.
The 10 picks are “very Buffett-esque,” but it’s not easy to duplicate Buffett’s success, said Robert Miles, who has written books about Buffett and who teaches the class, titled the Genius of Warren Buffett. The University of Nebraska at Omaha class is part of the College of Business Administration’s executive MBA program.
“I don’t think most of them will beat Berkshire Hathaway,” Miles said, because Berkshire has more financial resources and decades of stock-picking experience by Buffett and his two money managers, Ted Weschler and Todd Combs. They spend hundreds of hours evaluating potential investments before making a choice.
They do an excellent job. Nobody has a crystal ball, but their long-term analysis shows that even though stocks may go down at some time, typically the good companies will come back." David Volkman, chairman of UNO’s finance department
“These students have had 36 hours of training,” Miles said. “They’re better off being an anesthesiologist or working for Gallup or the power company.”
As for the results so far, he said, “I would say, more time, please.”
The stocks in the fund will remain in the portfolio for at least 10 years. That’s in keeping with the long-term focus of investments by Buffett, an advocate of “the joys of compounding” who has said his favorite period for holding an investment is “forever.”
“You don’t flip these things,” Miles said. “You buy them and hold them.”
Andrew Gassman, who sells advertising for Cox Media, took the Buffett class in the fall of 2014 and graduated in 2015 with an MBA.
His Buffett team picked Cummins Inc., an industrial engine manufacturer, as a potential Berkshire investment. He believed in the research results so strongly that he bought shares of Cummins stock himself.
“It’s been a tough year for them,” he said, with the stock price down nearly 40 percent in 2015 because of a slump in global manufacturing. “It hasn’t done really well this year, but our investment was a long-term type of thing. I fully expect it to be a strong play.”
The team’s research was a good starting point, Gassman said. “It helped me immensely understand the value of a company and the methods of valuation, some of the foundational beliefs that Warren tries to use.”
But he said the students’ work was compressed to produce a presentation by the class deadline. “It may not be as much time as you would spend if it was your own money you were playing with. It’s always good to do your own research.”
The Genius of Buffett Fund was Miles’ idea, and he has donated $29,000 since it started. Others have made donations, too, including UNO Business Dean Louis Pol and his wife, Janet, and former students of the class.
Before the fund started, one of the student teams chose Deere & Co. as a Berkshire-style investment. A few weeks later, Berkshire announced that it had, indeed, purchased Deere stock.
“It was proof that it’s possible to teach Buffett’s methods,” Miles said.
The students look for companies that would meet Berkshire investment requirements, including factors such as being large, understandable businesses with high profits and having good management and durable competitive advantages.
Buffett says such characteristics are hallmarks of a company that can succeed over 10 or 20 years, or longer, and eventually its stock price will reflect its true long-term value.
Sue Kutschkau, a development director for the University of Nebraska Foundation, said setting up the fund to hold the investments was an exception approved by the foundation’s board of directors.
“Generally, when we get a stock, we sell it right away,” she said, and put the money into the foundation’s regular accounts. But because the Genius of Buffett Fund has an educational role, the foundation’s leaders agreed to let the stocks ride as a separate portfolio.
In promotional material seeking donations to the fund, a disclaimer says that the fund isn’t likely to outperform a low-cost stock index fund or Berkshire stock and that the university doesn’t recommend or guarantee any of the stocks in the portfolio.
Nor is the fund affiliated with or reviewed by Buffett or Berkshire, the university says, adding that the fund is “for educational purposes only.”
After 10 years, up to 10 percent of the portfolio will be sold, with the proceeds going to support the executive MBA program and the rest held to generate future support.
The cash and the stocks are held in a TD Ameritrade account, overseen by David Volkman, chairman of the college’s finance department.
Volkman said the shares’ performance so far has a lot to do with oil-related stocks and the declining price of petroleum, not with the analysis of the companies’ long-term prospects by the students, presented in reports of 40 or more pages.
“They do an excellent job,” he said. “Nobody has a crystal ball, but their long-term analysis shows that even though stocks may go down at some time, typically the good companies will come back.
“I expect after 10 years the portfolio will have a very attractive return. I have a feeling they’re not going to outperform Berkshire Hathaway, but it will be interesting to watch and see.”
The Buffett course attracts for-credit and noncredit students. In the spring, the sessions are scheduled around Berkshire’s annual shareholder meeting. Spring enrollment reflects the presence of shareholders who come to Omaha from around the country and from many foreign nations.
Volkman said teams with foreign students often write research reports about businesses that aren’t traded in the United States (like a Brazilian tugboat company). If shares of foreign companies trade in U.S. markets, they’re potential investments for the class.
Of the 10 investments so far, four are based in other countries — Ireland, India, South Africa and the United Kingdom.
Each semester, a trio of judges picks the team that makes the best research presentation. The winners split a $1,000 scholarship, also from Miles.
The fall 2015 class was small — four men and four women — and the men’s team won with its presentation about U-Haul’s parent company, Amerco. But the men’s tuition was paid through their employers or the GI Bill, and two of the women also had their tuition paid.
So the men deferred the prize to a woman who was paying her own tuition and to a single mother, who each received $500. Said Miles: “It was very moving.”
The Omaha World-Herald Co. is owned by Berkshire Hathaway Inc.
Contact the writer: 402-444-1080, firstname.lastname@example.org, twitter.com/buffettOWH
How their investments are doing
Students in the Genius of Warren Buffett class at the University of Nebraska at Omaha used Buffett’s investing philosophy to pick these stocks. Shares, purchased using donated money, are to be held and dividends reinvested for 10 years. The returns are the percentage gains or losses since purchase. The fund also invests in Berkshire Hathaway Inc. stock, which is down 2.21 percent since the fund began.
Based in London; explores, produces, processes and sells petroleum-based and energy products and services
Peoria, Illinois; manufactures and distributes equipment for construction, mining, transportation and industry
|Express Scripts Holding Co.
St. Louis; provides pharmacy benefit management services in North America
Dublin; manages power equipment for electrical, industrial, residential, hydraulic, vehicle and other markets
|International Flavors & Fragrances
New York City; creates, manufactures and supplies flavors and fragrances for consumer markets
Battle Creek, Michigan; manufactures and markets ready-to-eat cereal and convenience foods
San Francisco; delivers pharmaceuticals, medical supplies, health and beauty care products and health care
|Principal Financial Group Inc.
Des Moines; provides retirement, asset management, insurance and related financial services
Johannesburg; operates integrated energy and petrochemical businesses
|Tata Motors Ltd.
Mumbai, India; develops, manufactures, sells and exports passenger and commercial vehicles
|Source: Genius of Warren Buffett Fund|
‘Secret sauce’ of Buffett
September 30, 2015
Source: Omaha World Herald
Robert Miles has added a new topic to his graduate school class on Buffett at the University of
Nebraska at Omaha College of Business Administration: leadership.
The class began five years ago and has a fall session, in October, and a spring session, scheduled around the early May meeting of Berkshire shareholders in Omaha.
Miles told a class-preview group recently that people know about Buffett’s investment skills but don’t fully appreciate his ability to bring together Berkshire’s dozens of company managers.
“It’s unheralded,” he said. “This is really the secret sauce of Warren Buffett.”
Buffett excels at judging the character of company presidents before he buys a business, making sure they have a strong character as well as intelligence and energy, Miles said.
It’s a point of pride for Buffett that none of his CEOs has left to join a competitor, and he would measure his successor by the ability to continue that record, Miles said.
GOB Testimonial Video produced by the student PR team
February 15, 2015
"Warren Watch: Teaching UNO class on Buffett makes for career highlight" Omaha World-Herald
September 14, 2014
Posted in Money, Buffett on Sunday, by Steve Jordon / World-Herald staff writer
Robert Miles had given lectures but never taught an actual class until 2011 ... Read more
CBA Focuses On Financial Risk Management
January 4, 2015
The College of Business Administration “continues to get better each year tying all the elements together during Berkshire Hathaway Week,” says Dean Louis Pol ... Read more
Genius of Buffett Investment Fund Supports Executive MBA
January 4, 2015
Highly popular learning sessions in the fall 2013 and spring 2014—along with the establishment of a fund that will ultimately benefit the College of Business Administration Executive MBA program—highlight an impressive year for the Genius of Warren Buffett learning and investment program … Read more
Berkshire Hathaway 2015 annual meeting
November 30, 2014
Join us in Omaha this Spring 2015 for a week long series of events leading up to Warren Buffett's Berkshire Hathaway annual meeting.
- Will Thorndike, Jean-Marie Eveilard, Roger Lowenstein, Lauren Templeton, Guy Spier, Mariko Gordon and more presenting at the 12th Annual Value Investor Conference, April 30 and May 1
- Genius of Warren Buffett Seminar, April 27 - April 29
- NEW! Charlie Munger Summit, April 30 Presenters include Ron Olson, (Munger Tolles and Olson), Anupreeta Das, (Wall Street Journal), Janet Lowe, (author, Damn Right Charlie Munger) and more.
Register Today! while seats are still available.
Local Executives Earn Warren Buffett Scholarship
November 6, 2014
Source: UNO News Center
Contact: Charley Reed - University Communications | 402.554.2129 | email@example.com
OMAHA - Four local executives who participated in the University of Nebraska at Omaha (UNO)
Executive MBA (Masters of Business Administration) course on Warren Buffett have won a $1,000 merit
Teams from the “Genius of Warren Buffett: The Science of Investing and the Art of Managing” course competed against one another after three weekends of learning Buffett’s investing, managing, leadership, marketing, character and philanthropy secrets from those closest to him--including his daughter, Susan Buffett, and executives from Berkshire Hathaway subsidiaries.
The winning idea best fit into Berkshire Hathaway’s four main tenets: business, management, financials and valuation. The team suggested the company buy stock of Cummins, a global diesel engine manufacturer based in Indiana.
Winners of the scholarship are Andrew Gassman, a key account advertising consultant at Cox Media; Rony Kappuzha, an IT project manager at Infogroup Inc.; Scott Moulton, a performance manager at Gallup; and Doug Peterchuck, a manager at Omaha Public Power District.
“This course continues to develop into the only one of its kind in the world with extraordinary guest speakers offering insights into the genius and the wisdom of Warren Buffett,” said Bob Miles, course instructor and international authority and author on Buffett.
A team of independent judges- including Dr. Dave Volkman, CBA Finance Department chair, and Genius of Warren Buffett graduates- selected the winners.