Questions for Isaac

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13 years 9 months ago #5224 by Huat Ah!
Replied by Huat Ah! on topic Re:Questions for Isaac
Dear Isaac, Congratulations on your success! I do aspire to someday achieve what you have acheived. What I am interested to know is when you first started off investing, how much seed capital did you start with? I mean, if you were already rich in the first place and had a lot to start off with, achieving what you have may not be that difficult if you already had a large base to begin with. I am interested to know because I only have $100+k to play with at the moment and growing it to what you have seems like an uphill task...

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13 years 9 months ago #5228 by Isaac
Replied by Isaac on topic Re:Re:Questions for Isaac
I started my career as a private investor by accident. I remember selling my condo at $1.2M in year 2000.At that time a bank officer advised me to put the money in the Spore Power Bond which paid 5% interest pa.At year-end, I made capital gain of 10% on top of 5% interest.Thereafter,I only concentrate on financial products that paid a good dividend/interest besides capital gain.
I am basically a conservative investor and do not like unnecessary risk. I am quite contented with what I have today.
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[Huat Ah! 16-02-2011]:

Dear Isaac, Congratulations on your success! I do aspire to someday achieve what you have acheived. What I am interested to know is when you first started off investing, how much seed capital did you start with? I mean, if you were already rich in the first place and had a lot to start off with, achieving what you have may not be that difficult if you already had a large base to begin with. I am interested to know because I only have $100+k to play with at the moment and growing it to what you have seems like an uphill task...

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13 years 9 months ago #5262 by jong
Replied by jong on topic Re:Questions for Isaac
Hi Isaac,
Congratulations on having done well in your portfolio. Would you be willing to share your knowledge with a group of active seniors who would be keen on hearing of your investment experiences...
we are at www.silverhairsclub.com , please feel free to signup and join our group
rgds
jon, SHC member

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13 years 8 months ago #5388 by Dongdaemun
Replied by Dongdaemun on topic Re:Questions for Isaac
Even when he's wrong, Buffett gets it right
Allan Sloan
Tuesday, March 8, 2011; 9:03 PM 
One secret of successful investing is price. Sell dear enough or buy cheap enough, and you can make money even if the market moves against you.
Today's example involves Warren Buffett, who got the markets for both junk bonds and GE stock wrong - but has made money on both anyway.
In his letter to shareholders of his Berkshire Hathaway conglomerate, one of whom is me, Buffett (a director of The Washington Post Co.) talks about the company's adventures - or misadventures - in the junk bond biz. Berkshire, he says, had sold contracts requiring it to pay if certain junk bond issuers defaulted. Because of the financial panic and severe recession, more issuers than expected croaked, and Berkshire had to pay the contract holders $2.5 billion.
However, Buffett predicts Berkshire will come out ahead, even though some of its contracts are still in force. The reason: "We charged the right premium, and that protected us when business conditions turned terrible three years ago."
The same right-price principle holds with Berkshire's investment in GE, which he didn't discuss in his shareholder letter but is a fine example of how you can make money if you buy cheap enough.
GE is selling below what it fetched in October 2008, when Buffett made his famous deal to buy $3 billion of GE stock and GE also sold $12 billion of new stock to public investors. Investors who bought in the public offering are behind, but Berkshire is way ahead on its investment.
That's because Buffett got to buy cheap.
GE, which at the time was reeling from fallout caused by the Lehman bankruptcy, badly wanted Buffett's imprimatur. So Buffett didn't buy $3 billion of common stock at GE's then-market price of $22.25, as public investors did. Rather, Berkshire bought $3 billion of preferred stock that carries a fat 10 percent annual dividend, and also got a warrant that carries the right (but not the obligation) to buy $3 billion of GE common at $22.25 through October 2013.
If you bought common stock for $22.25 the day the deal was announced, you own shares that closed Monday at $20.42. Even with the $1.52 of dividends you've collected since the offering, you're behind.
By contrast, Berkshire has gotten preferred stock dividends equivalent to about $5.40 a GE share. If you count the premium it's almost certain to get in October, when GE can redeem the preferred for $3.3 billion, Berkshire has so far made about 35 percent in dividends and capital gains on its $3 billion investment, compared with a slight loss for investors who bought at the public offering on Oct. 7, 2008.
In short, Buffett's return - assuming GE buys him out in October - has about matched the Standard & Poor's 500 return since the offering, while other GE holders have lagged it badly.
What's more, Berkshire still owns the aforementioned stock-purchase warrant giving it the right to buy $3 billion of GE common stock at $22.25 through October 2013. GE valued the warrant at $500 million when it was issued; it's now worth about $150 million, by my estimate. But even if the warrant expires worthless, Berkshire is way ahead on its total investment.
Neither GE nor Buffett would discuss their deal. But I've been watching Buffett for about 35 years, and I doubt he was betting on GE common stock selling at less today than when he made his deal. He was just building a margin of safety into Berkshire's investment, which is what he tries to do.
You've got to love it. In the junk bond market, Buffett sold insurance at a dear price. In the GE market, he bought stock at a cheap price. He didn't get either market right, but he'll still come out ahead. This, my friends, shows why he's Warren Buffett. And we're not.
Allan Sloan is Fortune magazine's senior editor at large.
 
www.washingtonpost.com/wp-dyn/content/ar...011030805795_pf.html
 
 

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13 years 2 months ago #6954 by yeng
Replied by yeng on topic Re:Questions for Isaac
Hi Isaac, given your proven track record, I was wondering what your views on the market are.

Have you done anything about  yr investments? Rebalanced portfolio?
Exited yr equity holdings? Or even added to them?

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13 years 2 months ago #6959 by niadmin
Replied by niadmin on topic Re:Questions for Isaac
Dear Yeh:

The stock market has taken a turn for the worst lately. There is 50% chance of a world recession according to some prominent economists but it is unthinkable to re-visit the 2008 financial crisis. Currently I am 25% in Corporate Bonds,25% in Reits and balance in Cash. I will use a different technique to battle this Crisis which will last a longer time.

Isaac Chin.

(As relayed to Admin)

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