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What do Warren Buffet, Paul Graham and Hugh Hefner have in common? Each buys an undervalued asset at its undervalued price, sprinkles it with some fairy dust an

What do Warren Buffet, Paul Graham and Hugh Hefner have in common? Each buys an undervalued asset at its undervalued price, sprinkles it with some fairy dust and then sells it at a premium once the potential has been realized. One does it with stocks and securities, the next with startup founders and their ideas, and the last with women.

patrickg-zill 18y ago
In the case of Hefner, I think you are confusing silicone for fairy dust ...
- adrianwaj 18y ago
  Hef just uses photoshop and his bed. Graham gives everyone a good lunch and some networking support. Buffet just gets the most alert people to brighten up and prod the execs in despair.
known 18y ago
aka Capitalism
13ren 18y ago
Except Warren doesn't sprinkle with fairy dust - or sell. He does however buy good businesses at discounts to their true long-term value.
- adrianwaj 18y ago
  I am no Buffet expert but know he is a value investor and buying distressed assets has been a way for him to obtain value. He likes to keep existing management.
  - 13ren 18y ago
    Yeah, you've got the flavour right.. although... he tends to not buy distressed assets so much as assets that the market thinks are distressed.... a solid business (i.e. non-distressed) is very important to him. Maybe I'm just playing with definitions, but here's an example: American Express was guilty of fraud, and things looked really bad for them, because their business is based on trust - surely their future bleak, thought Wall St. Their stock price tanked (this is just the opinion of the market; it may or may not correspond to reality). But Warren Buffett went down to the supermarket, and observed people: in fact, they still trusted American Express, in the operational sense that they still used it. The fraud didn't affect Amex's business at all. So he put half his wealth (or something like that) into it, and made a killing... by buying a non-distressed asset at a distressed price. And here, price is just another word for opinion. Sorry to go on, I just like talking about it.

patrickg-zill 18y ago

In the case of Hefner, I think you are confusing silicone for fairy dust ...

adrianwaj 18y ago
Hef just uses photoshop and his bed. Graham gives everyone a good lunch and some networking support. Buffet just gets the most alert people to brighten up and prod the execs in despair.

known 18y ago

aka Capitalism

13ren 18y ago

Except Warren doesn't sprinkle with fairy dust - or sell. He does however buy good businesses at discounts to their true long-term value.

adrianwaj 18y ago
I am no Buffet expert but know he is a value investor and buying distressed assets has been a way for him to obtain value. He likes to keep existing management.
- 13ren 18y ago
  Yeah, you've got the flavour right.. although... he tends to not buy distressed assets so much as assets that the market thinks are distressed.... a solid business (i.e. non-distressed) is very important to him. Maybe I'm just playing with definitions, but here's an example: American Express was guilty of fraud, and things looked really bad for them, because their business is based on trust - surely their future bleak, thought Wall St. Their stock price tanked (this is just the opinion of the market; it may or may not correspond to reality). But Warren Buffett went down to the supermarket, and observed people: in fact, they still trusted American Express, in the operational sense that they still used it. The fraud didn't affect Amex's business at all. So he put half his wealth (or something like that) into it, and made a killing... by buying a non-distressed asset at a distressed price. And here, price is just another word for opinion. Sorry to go on, I just like talking about it.