Warren Buffett Videos Worth Your Time

Warren Buffett, is, without a doubt, is the most successful investor alive. As you’ve probably heard, he earned his fortune purely from investing, crushing the market over the course of the last 50 years, eventually reaching the podium as the world’s richest man.

In recent years, as Warren’s celebrity has increased, it seems like everybody wants to learn from the master. Whenever the Oracle of Omaha speaks, people pay attention. And for good reason, Buffett is sharp as a tack, funny, and is generally an entertaining speaker. Every May, shareholders fill a basketball stadium to hear the man talk for the day.

Luckily for us, the internet contains all sorts of videos of the greatest investor of our time. I’m about to present you with all sorts of Warren Buffett videos, videos that will most likely make you non-productive for hours at a time. Sorry about that. Try not to watch them at work. Without further adieu, here you go.

1. University of Florida MBA Talk

The quality is grainier than 70s porn, but it’s Warren Buffett answering questions for an hour and a half. From 2006, so some of the stuff they talk about is a bit dated. Still, worth your time.

2. Jay-Z and Warren Buffett Forbes Interview

I’m listening to this interview as I type this post. This has the potential to be really interesting or really boring. No word on whether Jay-Z is going to put a cap in anyone’s ass, but stay tuned. It could happen. Is that what the rappers still say? I’m clearly so uncool.

3. Charlie Rose Interview

Warren has been on Charlie Rose several times, this one being the most recent. This interview was done during the depths of the financial crisis, so listen in for his perspective of the whole situation.

4. Buffett and Gates At Columbia University

I can’t embed this video, so if you want to watch it, you’ll have to go to CNBC’s website. I’ve watched this special on the network, and it’s worth an hour of your time. Just please come back here when you’re done.

5. The Billionaire Next Door

Thanks to someone for putting this on Youtube so I can embed it. Don’t tell CNBC! This video follows Buffett to China, along with fellow Berkshire Hathaway board members Bill Gates and Charlie Munger. The lovely Becky Quick accompanies the guys, yet another reason this Warren Buffett video is good.

6. Talk To Georgia Students

Back in 2001, a somewhat young-looking Warren Buffett entertained the students of the University of Georgia’s business school. The video has surprisingly good quality, considering how old it is. I haven’t watched this one, but I’m sure it’s good. Would I steer you wrong? (Wait, don’t answer that)

7. Charlie Munger University of Michigan Talk

Yeah, this last one isn’t one of the Warren Buffett videos, but is still worth your time. Charlie Munger is a little underrated. He’s funny, has a bit of a potty mouth, and clearly has no patience for much of anything. He reminds me of the kind of guy who would yell at teenagers for being on his lawn. Still, Munger is clearly very intelligent, and this video is worth the 2 hour time investment. Plus, Becky Quick is there, and you all know that I’m a fan of hers.

So there you have it. Prepare to be unproductive for the next few days as you watch these Warren Buffett videos. It’s okay, I’ll talk to your boss/wife for you.

It’s Not That Complicated

For those of you who are new around here, I lost a crap ton of weight in the first part of this year. I started out at 268.8 pounds, when people confused me with a blimp. After a lot of hard work, I finally conquered fatness, dropping down below my goal weight of 220 pounds. That was a few weeks ago, and so far I’m managed to keep the weight off, weighing in this morning at a slim and sexy 219 pounds. While I’d like to get down to 210 lbs, (which the internet tells me is a healthy weight for my height, 6’3) I’m not entirely motivated to make it happen at this point. I feel like I’m accomplished enough, y’know?

The weight loss has been nothing but positive. I have muscle tone in places I never thought I would. I have more energy, but all that means is that I’m just less lazy than before. I’m also getting all sorts of compliments, some of them even from pretty girls. As you can imagine, I enjoy those compliments the best.

I was recently chatting with a friend about my weight loss. She was lamenting her lack of success in the weight loss department, her frustration was evident. She asked me what my secret was. The conversation went something like this:

Her: So what’s the secret? How did you lose so much?

Me: I try to keep things as simple as possible. I cut my calories to less than 1500 per day and I tried not to eat too many carbs for supper. That’s it.

Her: So you decided you can eat whatever you want?

Me: Yep. I just make sure I don’t eat so much of it that I go over 1500 calories.

Her: But you can’t do that!

Me: Why not?

Her: I was listening to a nutritionist and she was telling me… (two minutes of very specific eating rules)

One of  the main reasons why this friend is failing at losing weight is she’s making everything too complicated. She has very specific meal plans, usually built around one food, chicken. I ate a lot of chicken when I lost weight too, but I switched it up constantly. The secret being, of course, not to eat too much of whatever other meat I substituted.

For me, counting calories was the most simple way to lose weight. I knew if I cut my diet down to 1500 calories a day, I’d lose weight. I like numbers, so counting calories was easy. I could eat until I reached 1500, and then I had to quit. I didn’t limit myself any of the foods I love. I can truthfully tell people that I lost 50 pounds eating whatever I wanted.

It’s the same thing with money. If you spend 90% of your net income and save the other 10%, chances are you’ll end up wealthy. If you spend 80% and save 20%, you’ll end up even wealthier. Like with calories, you figure out how much you need to live, and then cut some from that total. The amount you consistently cut is directly proportional to the amount of success you have.

This isn’t that complicated. Yet why can’t more people do it?

Entitlement

Stop me if you’ve heard this story before. I don’t know how you will, considering I wrote this hours ago.

Couple A wants to cut down on their money and finally get their debt under control. So they work hard all week, eat at home a ton, and generally do a nice job. At the end of the week, they have $200 left. So they decide to treat themselves.

They go out for dinner on Friday night. Since they’re celebrating their success, dinner inevitably comes with a couple of drinks. After dinner, comes a movie, complete with delicious movie theater popcorn. (Can’t really fault them there! That stuff is like sex in your mouth.) By the time they’re done for the evening, most of that $200 is gone.

Why do people do this? They’ve just negated their hard work.

Entitlement is the parasite that robs from all of us at some point, and if left unchecked, can be one of the most destructive elements of your personality. When people feel entitled to little treats because they’ve been working so hard, they can often undo all of the hard work they’ve put in. It happens with saving money, with work, with losing weight and with countless other things. It robs you of any meaningful accomplishment.

It’s Hard, But It’s Not Difficult

I’ve often heard people say saving money is hard, but it’s not difficult. The activity is something a grade school-er can understand. Why can’t more people do it?

There are all sorts of reasons, but they boil down to willpower. People, for whatever reason, just can bring themselves to repeat the process enough times to get to the desired goal. Yet they’ll lament their failures, not understanding why they can’t make that proverbial next step. The outside observer gets it, and yet makes the same mistakes in their own lives.

What’s The Point?

Entitlement robs people of all sorts of important things in their lives. People want to change, yet they feel entitled to treat themselves. This is what holds people back from accomplishing all sorts of goals, monetary or otherwise.

Often, these afflictions will seem to be disproportionally suffered by young people. Members of the older generation will lament, complaining among themselves about the “damn kids these days.” Perhaps one of the milestones of growing up is making some sort of meaningful change? Or maybe it’s finally owning up to the irresponsible behavior that got them into trouble in the first place.

Once people check their entitlement at the door, then they can begin to realize that accomplishing something major is a series of small changes, repeated over and over again. Want a girlfriend or boyfriend? Find a way to start talking to lots of single members of the opposite sex. (or the same sex, if that’s the way you float) Similar changes will cut down your weight or your debt. And once the changes are made and some success is had, you’ll realize it’s just not that complicated.

Are Experiences The New Stuff?

I’m a little scared of what Fabulously Broke will think of this post. This is why I’m writing it while she’s off in whatever weird Asian country she decided to visit. If I am anything, it is a coward.

I’m not minimalist per se. As you saw in my look inside my crib, I live a pretty simple life. I have a couch, a tv, 2 laptops, a whole bunch of hockey toys action figures, and that’s about it. I eat most of my meals from the microwave or toaster oven, and I could easily live in half the space I live in now. And I only live in about 700 square feet. So I don’t have a bunch of needless stuff.

I’m sure this will change once a girl moves in. She will change EVERYTHING and I’ll be forced to pretend to like it, or she won’t put out. Isn’t this how every relationship works?

Even though I may appear minimalist upon first glance, I’m not really. I just don’t care about having stuff. I can afford to buy all sorts of cool stuff, I just don’t have the desire. I get offered stuff all the time from 2 sets of Grandparents who are in the process of downsizing and I just about always turn them down. I have no desire for a tea kettle or a spare bed, thanks anyway Grandma.

Of course, you’ve all probably heard by now there’s quite the movement afoot. There are all sorts of people out there shunning the fruits of consumerism and actively getting rid of their stuff. Some of them even pare down their possessions to a scant 100 items. You may have even pointed and laughed at these people. Don’t worry FB, we’re laughing with you.

The philosophy behind minimalism is quite simple. Stuff should be down away with, stripped down to the necessities of living. Instead, stuff should be replaced with experiences. Take the money that would normally be spent on stuff and spend it on trips. Some people have taken this a step further, even buying a RV and driving across America.

As an aside, what’s up with Baker signing all his posts “xoxo Baker”? Does he want to hug and kiss me?

Now I don’t want to bash experiences too much. After all, I’m the guy who still secretly pines about quitting his job and travelling to watch baseball for a summer. I can understand that desire to get away from your comfortable life, if even for a few months, to have a gander at what the world has to offer. From what I hear, it’s an amazing place. It’s all we have until the aliens show up and take our most attractive back to their planet to create a new super race.

I understand the desire to travel. But I also understand the desire for stuff.

Like it or not, one of the tools we use to judge people’s socioeconomic status is the goods they own. Someone has a crappy car? They’re viewed as poor. Same with someone who picks up their clothes at the second hand store or the couple that crams themselves in a bachelor apartment. They may be making a conscious decision to do these things to save money, but most will judge them as poor without bothering to know the full story.

For some people, this judging is too much to bear. They want to fit in. All of us want to fit in to a certain degree, even us contrarians. Other people look at nice things as confirmation they’ve arrived. They must be doing fairly well, since they can afford a new tv or microwave. While we know this can often be the beginning of a slippery debt slope, the reality is most people who don’t read PF blogs feel this way.

Pretty much the whole minimalist philosophy shuns this attitude. Stuff is stupid they argue. It pins you down to one place. You can’t take it with you! Experiences are what matter they argue. They might not have stuff, but they can tell you a hell of a story about the monks in Nepal.

They’ll then launch into that story, with all the zeal of a bible thumper telling you the good news about Jesus. Can’t you see why stuff is bad?

In reality, spending your money on things or experiences still results in the same thing: less money. Every dime spent on either is one less dime you don’t have. As always, spending money represents a trade-off. If I spend ‘x’, I get this. Is that good value?

The person who values stuff will argue that stuff gives them the best value. The person who values experiences will argue the opposite. Who really cares what someone values, if each person gets value from their money?

Yes, spending money on stuff can often lead to debt. Countless people have gotten into credit card debt from having a lifestyle that they can’t afford. (including, Amanda Lang) Yet when someone leaves the county for extended periods of time, they’re forfeiting earning tens of thousands of dollars. Is that better or worse than consumer debt? Each path has it’s own opportunity costs.

To which I say this: to each his own. If you want to travel the world, go ahead and do it. And if you want to settle down, drive a nice car and drink wine from nice glasses, then do that too. The secret, as always, is to do each responsibly, just like FB does. Each lifestyle is possible without getting into consumer debt. Whatever you want to do, just go ahead and do it.

An Update On Nokia

Since I talked about Nokia back in May of last year, a lot has happened with the company. Let me throw up a one year chart for your viewing pleasure:

 

 

 

 

 

 

 

 

 

As you can see, it hasn’t been a good year for the Finnish phone maker. What’s happened over the past year?

Recent Happenings

In the early part of this year, Nokia finally decided to scrap their operating system for smartphones, choosing to enter into a partnership with Microsoft to use their Windows Mobile operating system. The stock promptly dropped 13% on the news. The market wanted Nokia to partner with Google’s Android operating system, but Nokia got a much better deal from Microsoft.

Nokia has missed profit expectations badly twice in the past year. Each time they missed the stock sold off at least 10%. The market is nervous about Nokia’s results, and it shows each time the company has a hiccup.

Their networking division (which is a partnership with German company Siemens) is in the process of acquiring Motorola’s networking assets. This sale was supposed to be completed at this point, however it’s being held up by a Chinese partner of Motorola’s. This deal should close sometime in the 3rd quarter.

Led by new CEO Stephen Elop, Nokia is trying to turn around corporate bureaucracy that was evident over the past few years of failures. The Window’s decision was made quickly. Many of the key people working on the old operating system has been reassigned to come up with cool new things for future models, including the next operating system.

Even Cheaper Than Before

I liked Nokia at over $9, and I really like it under $7.

Nokia sold 450 million mobile phones in 2010. In comparison, Apple sold less than 10% of that total. Nokia still dominates the emerging markets, which still have all sorts of room to grow. Most people in China simply can’t afford an iPhone. This is where Nokia comes in.

Nokia is so cheap that rumblings are starting to happen that they’ll be purchased. A rumour circulated around the interwebs last week that Microsoft was interested in buying the company. Other companies could be interested in just the handset division, looking to buy while the stock is beaten down. According to Bloomberg, the company is worth 52% more broken up into its parts. The Bloomberg article goes on to say that Nokia is cheaper than 10 of it’s largest rivals from an EBITDA perspective.

The company continues to pay a dividend, however investors are skeptical that it’ll continue. The company also will no longer offer full year guidance, which is usually a bearish signal.

The Balance Sheet

The balance sheet continues to look great.

The company is sitting on over 11 billion in cash, and only has a little over 4 billion in debt. 7 billion net cash represents over 25% of Nokia’s 25 billion market cap.

The company trades at approximately 2 times book value. In comparison, RIM trades at 2.2 times book, Motorola at 1.47 and Apple at over 5 times. Each of those other 3 companies are completely debt free. From a purely book value perspective, there are better places to be. However, none of those names are as beaten up as Nokia.

The company made $0.09 per share in the first quarter of 2011, pretty much identical compared to the first quarter of 2010. Sales were up a bit from 9.5 billion to 10.3 billion, meaning that margins have taken a hit. This is what the market is really concerned about. Well, that and Nokia getting their asses kicked by better smartphones. How many of you own a Nokia smartphone? Exactly.

The network division keeps chugging along, giving a nice boost to Nokia’s bottom line.

Buying More?

I bought Nokia back in 2004, and sold a couple of years later for an almost 100% return. Back then, Nokia was struggling because they were lagging behind a hot product, (Motorola’s RAZR. Remember that thing?) and the struggles that brought both sales and margins. Sound familiar?

I think this is a great opportunity to pick up Nokia. The stock has such low expectations that even a small beat could really boost the price. Carriers will be quick to pick up the Nokia smartphones as an alternative to Apple and Android. And with time, Nokia will become the sexy name again. And once that happens, we could easily see a triple or quadruple from these depressed levels. I plan to average down soon.

Disclosure: Author owns shares in NOK and plans to purchase more in the next 72 hours.

Edit: Doubled down my existing position in NOK on Wednesday June 8th at $6.29 per share.

How Video Games Save Me Thousands Of Dollars

I am a male in my mid late 20s, so I grew up in the heyday of video games. I had an old 8 bit NES (Nintendo Entertainment System for you non-gamers out there) that I probably spent half my childhood playing. I extended the life of that system long past the introduction of newer systems, because I found I could spend my Saturdays scouring yard sales for cheap games. I ended up with close to 100 games by the time I graduated to an XBOX as an adult.

I loved video games. I spent countless hours trying to beat games like Super Mario Brothers 3, the several Mega Man games, The Legend of Zelda, Dragon Warrior, along with sports favorites like hockey, baseball and golf. I got to be incredibly good at some of the games, especially the sports ones.

As an adult, my love of video games is still there. I recently purchased a Playstation 3, finally upgrading from the Nintendo Wii I purchased when it was a brand new system. I immediately purchased MLB 11: The Show, which is the best baseball game on the market, at least in this humble gamer’s opinion. Since buying that game a few months ago, I’ve had many late nights building franchises and trying for that elusive perfect game.

Since this is a financial blog, I guess this post should have some sort of financial point.

On a lot of nights when I’m bored, I just stay at home and start playing some video games, or maybe some online poker. (always with play money!) I quickly get engrossed in my game, and often I’ll look up and hours have gone by.

That’s Nice. But How Does It Save Money?

If you have normal friends, those friends generally like to do stuff when you get together. I live in a small town, so our options are somewhat limited. It’s probably a blessing in disguise though, since more options=more money spent.

Typically, my friends and I will end up at one of the local watering holes, hanging out there and shooting the breeze while watching sports on their giant TVs. A couple of drinks will be consumed, as well some sort of deep fried snack that generally is delicious but not so nutritious. My tab easily adds up to $20, and I usually don’t even drink more than soda pop. Add a couple of beers in there, and the bill easily approaches $30.

Imagine you only go out once a week, and you act like a grown up and get a couple of beers, splitting  some  food with a friend. The bill comes to $20 each, including tip. That’s a pretty cheap night out, but will work quite nicely as a baseline.

$20 per week times 50 weeks means someone is spending $1000 per year. Once a week drinks sounds kind of expensive when you put it that way.

Meanwhile, the homebody buys one video game system every 3 years, at a cost of $300, along with a handful of games at $50 a pop. How much money is our homebody spending?

Year 1: $300 (system) $250 (games)
Year 2: $250 (games)
Year 3: $250 (games)
Year 4: $300 (new system) $250 (games)
Year 5: $250 (games)

Total: $600 (systems) $1250 (games) $1850 total

Total spent drinking: $5000

By staying in and playing video games, I save over $3000 every 5 years. Multiply that over multiple decades, and the savings really start to add up.

So You Don’t Like Video Games…

The big picture thing to take away from this post is that this strategy can apply to all sorts of thing other than video games, since I know most of my lady readers aren’t really into them.

Maybe you like to read. The library (or even buying a new book a month) will end up as a much cheaper alternative than going out. So will scrap booking, internet porn, dwarf tossing, playing a lot of sports and visiting old people at the retirement home. Not all of these activities will be fun, but you get the point.

If you can find something to entertain yourself during the evenings, you’ll be less likely to call or text your friends because you’re bored. I don’t really care what you do, all you need is to find a cheap hobby to alleviate that boredom. You could even find a cheap bf/gf. Just be careful with all those extracurricular activities though, since kids are more expensive than a night out with your friends.

Balance Is Key

Hey, I get it. I don’t want to completely abandon my friends, and neither should you. Unless they’re morons. In that case, I’d suggest new friends. And no, we can’t be friends. Sorry about that, but not really.

What I’m hoping you’ll be inspired to do is cut down on those nights out that start out as boredom. Or, maybe you’ve got one of those friends who insists on making it a $50 night every time you meet up. Either suggest some different activities to that friend, or tell him to take a hike. Besides, I bet he smells weird anyway.

And ultimately, both your wallet and waistline will thank you if you don’t go out as much. So stay in and play some video games instead.