Chapter 948: Card

In a small conference room at the Firefly headquarters, Warren Buffett's eyebrows wrinkled and quickly read the clover fund investment materials in front of him.
Buffett originally thought that he would like to see the stock investment portfolio of the clover fund will be rejected by Eric. This is a company's trade secret. Even if he is a shareholder of the Firefly Group, Eric will still look if he insists. Not enough.
However, what surprised Buffett was that Eric was very happy to agree, and he did not even let him sign a confidentiality agreement.
Now, looking at the page in his hand, Buffett also realized why Eric was completely undefended.
The Clover Fund's stock portfolio is concentrated in three areas.
The first category is Internet technology stocks. The main investment targets include Microsoft, Intel, Cisco, AOL, SUN, Oracle, etc., which account for more than half of the total investment.
The second category is telecom companies' stocks, which are AT-T, Sprint, Verizon, etc. The proportion of this investment is about 30%.
In the end, less than 20% of the investment was placed on several large cable operators, namely Comcast, telecommunications, basic cable and even Time Warner.
Simply put, these three types of company stocks are basically very popular technology stocks.
In recent years, both large investment funds and small retail investors have basically been chasing these types of stocks. Therefore, even if the portfolio of the Clover Fund is made public, there is no special place for outsiders.
In Buffett's eyes, Eric's portfolio is completely chaotic, without any rules.
In general, the more complex a stock portfolio of a fund, the stronger its ability to resist risks. But again, the fund is less likely to want a higher return. Because of the diversified stock investment, the return on investment of this fund will be consistent with the overall market.
A good investor has always been able to outperform the market. The reason why Buffett himself is called a stock is that Berkshire Hathaway’s annual growth rate can basically exceed the Dow Jones index by more than 10 percentage points for decades.
The return on investment of a fund is consistent with the broader market. In Buffett's view, this does not make any sense at all. Because the stock market is growing, it actually means the overall growth of the national economy. If we remove the factors such as rising prices and currency inflation, the actual value and purchasing power of assets will not change much.
Of course, Buffett also understands that Eric is coming to the new wave of bull market in the Nasdaq market, and then taking the opportunity to carry out stock arbitrage, which in effect is equivalent to outperforming the 'big market'. Buffett does not object to stock arbitrage, and he does it often. However, for arbitrage stocks, Buffett will never hold it for a long time, and will not buy such a long-term purchase from Eric.
However, seeing the total value of the stock assets of the last clover fund, Buffett’s brows did not stretch, but they could not help but scream.
In the past two years, the $5 billion investment has increased to $9.1 billion.
If the Shamrock Fund's stock can be sold off, and the tax, plus the Firefly Group's own surplus, the company's full-year net profit will exceed $7 billion.
Most of the company's financial reports in 1997 have not been disclosed, but Buffett clearly remembers that in 1996, the highest profitable GM in North America, the annual net profit was only 6.88 billion US dollars.
As a top investor, Buffett has not put down the information in his hands, and he has already begun to think about it. If he owns the $7 billion, how to invest.
Perhaps, you should first buy the national insurance company you have long seen, and you can also increase the stock of Coca-Cola. Compared with these high-risk stocks with a price-to-earnings ratio of 50 to 60 times, companies such as insurance companies and Coca-Cola are the best investment targets for long-term stable returns.
When Eric walked into the conference room, he just saw the old man thinking like this or being in a daze.
Feeling that a figure sat down opposite him, Buffett reacted, put down the documents in his hand, and took off the reading glasses and said: "Eric, I want to know, how did you plan?"
"This year, the fireflies will continue to invest $2 billion to buy technology stocks. I intend to accumulate a capital for the next big expansion of the Firefly Group, so that the company can minimize the proportion of equity transactions."
Buffett shook his head slightly and said: "Eric, you have not experienced the stock market disaster, I don't know how terrible this is, but I have seen that some billionaires are facing stock market crashes, sometimes they only need one day to go bankrupt. These stocks invested by the Shamrock Fund, in my opinion, most of the stocks may fall below your buying price in the short term.
"Warren, I am not a greedy person, so I feel that I can still take the opportunity to take the opportunity," Eric smiled and said confidently.
Eric did not hesitate to present the Clover Fund's stock portfolio in front of Buffett because he was confident that the information would not bring any useful information to Buffett. The most important card of his own is actually a prophet for the future.
Although the rise and fall of the Nasdaq index will be more or less affected by Eric's 'butterfly', the overall economic development trend at a country level will not change much. Eric's current influence It is still not up to this level.
Buffett shook his head again and said: "I appreciate the long-term layout of a manager for the company, but in my opinion, you have no need to take risks at all."
Eric’s handkerchief:
Warren, I have no risk. The $5 billion, and the $2 billion planned this year, are the balances of the Firefly Group itself. Even if it’s all lost, it’s a pity, but it’s a pity. It also hurts the roots of the Firefly Group. If you want to take risks, I will definitely use investment leverage now. With a $5 billion principal, it is easy to set aside $20 billion in capital."
Although Buffett still feels that Eric’s investment is too risky, he has to nod his approval.
However, even with a lucrative profit prospect, Buffett still does not agree with Eric's move, he wants to hold the funds in his own hands to make the investment he wants.
Berkshire Hathaway’s shareholding in fireflies is 5%, the Firefly Group’s net profit in 1996 was $1.76 billion, and Berkshire Hathaway’s dividends reached $88 million, the same year. Berkshire Hathaway’s net profit was only $725 million. In other words, Berkshire Hathaway's 5% stake in the Firefly Group brings annual revenues that exceed 10% of its full-year profit. As a diversified investment company, a 10% profit ratio is still very important.
Eric also guessed his general thoughts from Buffett's expression and said with a smile: "Warren, in fact, you can sell the firefly group in Berkshire Hathaway to me, according to the recent Wall Street pair. Firefly Group's $100 billion valuation, 5% of the shares, $5 billion, what do you think?"
The Firefly Group is certainly not able to make $5 billion in funding at a time, but if Buffett or other shareholders are willing to give up their stocks, it is not too difficult for Eric to raise $5 billion in the short term.
"Eric, I will not give up the shareholding of the Firefly Group." Buffett listened to Eric, saying, he shook his head without hesitation, and laughed.
He studied in detail the current development of the Firefly Group. Although the company is growing in size, it does not have any tendency to be redundant and bloated.
The entire Firefly Group, Firefly Film, New Line Film, Disney Pictures, Bo Wei International Distribution Company, ABC TV Network, AE TV Network, ESPN TV, Pixar Animation Studio, Disneyland, Digital Field, etc. A long group of subsidiaries are all high-quality assets that can bring huge profits to the parent company. Such a large-scale media group that can achieve diversification but complement each other is simply what Buffett dreams of.
As long as Eric does not make a company development strategy that he seems completely unreasonable, Buffett will never sell the shares of the Firefly Group. After all, even if you can't get profit from the Firefly Group, the stock of such a company is destined to achieve stable value-added for many years to come.
Eric also did not expect Buffett to sell the shares in his hands, but still said: "Warren, you can also tell others that if they want to sell the shares of the Firefly Group at any time, I can give the most generous repurchase. Price. The annual growth rate of the Firefly Group is still very low. I think in the next few years, they will definitely be excited about the Nasdaq technology stocks. If they want to invest, they will need money."
Buffett patted the clover fund investment information in front of him and said: "In my opinion, this is just a bunch of bubbles."
"I don't think so," Eric shook his head and said: "After the economic crisis in Southeast Asia, countless hot money will flock to North America. At that time, the bubble that has accumulated in billions of dollars, even if it is broken, the rest is for us. It is also a huge fortune."
Buffett still with a gentle smile on his face, shaking his head: "Eric, I will not be tempted by you, my investment guidelines are not involved in areas that I am not familiar with. If I look at a company, I will first Let it be thoroughly studied before it will be shot.
Think about it, this is the same for you. The Firefly Group and Firefly investment in your hands, as well as its numerous subsidiaries, have grown to a very large scale. Although you still have good control over these companies, you will feel powerless sooner or later. At that time, what you have to do is to abandon the fields that you are not familiar with and to develop what you can control to the extreme.

Eric nodded and said: "So, among the professional managers in North America, I admire Jack Welch."
"If you are interested, I can help you introduce it. However, Jack is too obsessed with diversification. This is not a good thing. GE's business has actually become bloated. I think that in the next ten years, no matter what. Whether it is active or forced, GE will gradually reduce its business."
Buffett finished, and analyzed with enthusiasm: "In fact, Jack began his career in the fine-cutting business. At that time, GE's business and staff system were bloated. Jack once took GE's management level from eight floors. By shrinking to the third floor, the company was able to move lightly and grow to a scale of nearly $300 billion in assets of more than 100 subsidiaries.
However, the management philosophy of any manager can't be perfect. Although Jack has excellently guaranteed the rapid development of GE for more than a decade, but for so many years, due to the problems accumulated by his own management style defects, It is destined to become more and more serious. For example, Jack is too obsessed with diversified operations. In my opinion, GE has more than 100 subsidiaries, like NBC TV, which are basically unnecessary. If the next manager can't solve his legacy problem perfectly, GE will inevitably decline.

Eric listened carefully to Buffett's analysis. When he finished, he smiled and asked, "Well, Warren, have you been in charge of Berkshire Hathaway for more than 30 years?"
"Not the same, this is very different. GE operates a real estate industry. I am doing equity investment. I have never stopped changing my portfolio for decades. What's more. Berkshire Hathaway is now The market value of the market is only more than 39 billion US dollars. For me, it is far from 'bloated'."
Buffett finished, and smiled and looked at Eric. "So, I am still very jealous of you this little guy. In just ten years, your achievements have far exceeded our old guys. For a lifetime. Sometimes, I want to take a lot of bets like a war in the Kuwait war, the Southeast Asian economic crisis, and the current wave of new technology. Unfortunately, I still can't convince myself to take risks like you. Have you made a lot of money in Southeast Asia this year?"
"1.1 billion US dollars," Eric did not conceal, said: "I did not think that there will be so much."
"As far as I know, the two funds in the hands of Soros have probably earned $6 billion this time. His own income is $2 billion. However, your principal is definitely much lower than the two funds in Soros. Buffett said, and could not help but shake his head with emotion.