Weekend reading: Young Warren Buffett discussing the stock market crash

Good reads from around the Web.

Well here’s something I’ve not seen before – archive footage of a relatively youthful Warren Buffett discussing some long-forgotten bout of stock market turbulence.

For the first time I get a real sense of why not everyone who encountered the young Buffett and his already amazing results invested with him.

Instead of today’s cuddly grandpa billionaire, we see just the hint of a young buck on the make. Without the benefit of hindsight, we may even see a sharp-suited spiv!

In Buffett’s biography The Snowball there’s a very interesting passage on how some potential investors who met Buffett thought he was too good to be true – that he was running a Ponzi scheme.

That’s why friends and family were the main backers of his early partnerships. They had more reason to trust him.

While I’m as big a fan of Buffett as anyone, I think this charming video is yet more evidence of why the chances of you finding the next Buffett are near-zero.

Even if you’re lucky enough to encounter him or her at a party or in an airport lounge, you’ll probably think he’s set to rip you off. And surely anyone who goes on to deliver Buffett’s long-term record is going to have some rough edges in the early days.

You’d be wise to distrust them, too. Whether by design or luck, the world doesn’t turn out many Warren Buffetts.

Is the bond market finally rolling over?

Just a quick extra note to say that Buffett might have another crash to opine about soon, and that’s a bond market crash.

Whisper it (although many are shouting it) but the first cracks do seem to be opening up at last.

Here are a few links on the subject:

• How central banks drove down bond yields everywhere – Schroders
• Good graph showing how the yield curve collapsed – Business Insider
• These low yields helped support stock market valuations – Motley Fool US
• But US bonds now yield more than stocks again… – Abnormal Returns
• …and emerging market bonds could be the canary in coal mine – Telegraph

Who knows if this will be yet another false start for the end of the great 30-year bond market bull run. The asset class has made more comebacks than Madonna.

But one company that must be feeling pretty smug is Apple.

If bonds keep selling off and thus bond yields keep rising, its $50 billion bond issuance a few weeks ago – almost the day before US 10-year yields spiked upwards – could be the equivalent of LastMinute.com getting its IPO away in March 2000, just as the dotcom stocks blew up!

From the blogs

Making good use of the things that we find…

Passive investing

• Should you buy into the market now? – Canadian Couch Potato
• The heavy toll of investment fees – Rick Ferri
• Oblivious Investor loves his Lifestrategy fund – Oblivious Investor

Active investing

• Understanding a company’s business cycle – The Value Perspective
• What’s holding you back as an investor? – Oddball Stocks
• Poker and its lessons for share trading – The Brooklyn Investor
• How buybacks have juiced earnings [Graph] – The Reformed Broker
• Momentum investing works (a quick data dive) – mcturra2000

Other articles

• Why not just try harder to get ahead? – Financial Samurai
• The danger of pretty data visualisations – Tim Hartford
• 9 ways to conserve bathroom water – Len Penzo
• How to make grandma’s wonderful spice cake – Miss Thrifty
• What does it mean to have ‘predicted the crisis’? [Heavy going, but basically why I just smirk if someone leaves a comment on Monevator claiming they fully foresaw the financial crisis] – Noahpinion

Product of the week: Tesco Bank has launched three new competitive fixed rate mortgages. Its five-year mortgage charges a puny 2.49% and gets the thumbs up from The Telegraph. But mind those hefty arrangement fees if you’re not a big borrower.

Mainstream media money

Note: Some links are to Google search results – these enable you to click through to read the piece without you being a paid subscriber of the site.

Passive investing

• Cheap ways to invest in shares – The Guardian
• Low fees aren’t the only win from index funds – Forbes
• The only pattern that matters is behavioural – NY Times
• The profitability premium – MorningStar

Active investing

• Interview with (Lord) John Lee of ‘My Portfolio’ – Motley Fool (UK)
• Why you never learn from your investing mistakes – Motley Fool US
• When a ‘ten-bagger’ is just above average [Search result] – FT
• Merryn S-W: Russia is cheap and hated [Search result] – FT
• A statistical (skeptical) look at Jim Cramer’s skill level – CBS News
• Attempting to value the stock market – The Telegraph

Other stuff worth reading

• Look out for charges with ‘in-specie’ transfers [Search result] – FT
• OECD flags countries with over-priced property – Telegraph
• Prime London property partying like it’s 2007 – MarketWatch
• Property power makes London the world’s second mega-city – FT
• How to invest in up-and-coming artists – The Guardian
• Europe is wasting its young [Graph] – The Atlantic
• Peer-to-peer lending is changing, needs a new name – The Economist

Plug of the week: I have finally signed up for Prime at Amazon, which means I can now buy almost anything I want and it turns up at my front door the next day. For virtually all of human civilization, this would have made me a King. Now it costs £49 a year, and there’s even a free one-month trial.

Like these links? Subscribe to get them every week!