Comments on: Warren Buffett Responds to Shai Dardashti’s Question http://www.fatpitchfinancials.com/556/warren-buffett-responds-to-shai-dardashtis-question/ Special situation stocks and value investing Tue, 07 Feb 2012 02:35:15 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Harrison Duan http://www.fatpitchfinancials.com/556/warren-buffett-responds-to-shai-dardashtis-question/comment-page-1/#comment-481819 Harrison Duan Sat, 14 May 2011 14:19:33 +0000 http://www.fatpitchfinancials.com/556/warren-buffett-responds-to-shai-dardashtis-question/#comment-481819 Dardashti asked a very important question; Buffett provided a very solid answer; and Merkel made some very insightful explanation. So thank you all for this! Dardashti asked a very important question; Buffett provided a very solid answer; and Merkel made some very insightful explanation. So thank you all for this!

]]> By: Mad Marv’s Place » Blog Archive » Warren Buffett’s response to Shai Dardashti’s Letter http://www.fatpitchfinancials.com/556/warren-buffett-responds-to-shai-dardashtis-question/comment-page-1/#comment-102699 Mad Marv’s Place » Blog Archive » Warren Buffett’s response to Shai Dardashti’s Letter Tue, 24 Apr 2007 08:24:05 +0000 http://www.fatpitchfinancials.com/556/warren-buffett-responds-to-shai-dardashtis-question/#comment-102699 [...] Found this through Fat Pitch Financials [...] [...] Found this through Fat Pitch Financials [...]

]]> By: David Merkel http://www.fatpitchfinancials.com/556/warren-buffett-responds-to-shai-dardashtis-question/comment-page-1/#comment-101740 David Merkel Mon, 23 Apr 2007 17:09:21 +0000 http://www.fatpitchfinancials.com/556/warren-buffett-responds-to-shai-dardashtis-question/#comment-101740 Warren shows us once again why he is such a great investment thinker. Good managers consider their own "bite size" in picking stocks. Large managers can't devote the time to promising opportunities in microcap value; they couldn't get enough money of their money put to work. For a stock to be badly mispriced, there has to be little information about the stock. That correlates with small tradeable float. In managing a lot of money, since trading becomes difficult, becoming a pseudo-private equity investor makes sense. Focus on assets that are cheap-ish with good growth prospect due to sustainable competitive advantage, and you have another winning formula. The dollar alpha to the latter strategy is higher than the former strategy, but not the annual percentage alpha. Warren shows us once again why he is such a great investment thinker. Good managers consider their own “bite size” in picking stocks. Large managers can’t devote the time to promising opportunities in microcap value; they couldn’t get enough money of their money put to work. For a stock to be badly mispriced, there has to be little information about the stock. That correlates with small tradeable float.

In managing a lot of money, since trading becomes difficult, becoming a pseudo-private equity investor makes sense. Focus on assets that are cheap-ish with good growth prospect due to sustainable competitive advantage, and you have another winning formula.

The dollar alpha to the latter strategy is higher than the former strategy, but not the annual percentage alpha.

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