Warren Buffett’s oracle views nearly always take centre stage and it is no surprise. Warren Buffett, also known as the “Oracle of Omaha,” holds the heavyweight title of the world’s successful investors of all time. It is a heavy belt. Warren Buffett’s real-time net worth is $91.1 billion (and no wonder he is smiling).

Perhaps Warren Buffett’s (dirty) secret is that he has been brilliant spotting and investing in monopolies which are then able to extract monopoly profits.

“Warren Buffett’s real-time net worth is $91.1 billion”

 

One of Warren Buffett’s oracle views (plays) is that the billionaire investor likes to buy monopoly-like situations.

“It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price”

Now just substitute “wonderful company” with a monopoly and you have got it.

So Maybe Warren Buffett’s billions were made busting free market capitalism (and that would be a plot with an ironic twist)?

But the purpose of this piece is not to downplay Warren Buffett’s great success as an investor but to see if the likes of Mr. and Mrs. Jones can learn from Warren Buffett’s oracle views.

As they say, if you want to get good at a game then watch how the grandmasters play.

So we have made a list of Warren Buffett’s oracle views over the course of many years which I would like to share with you.

“It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price”

WARREN BUFFETT

Warren Buffett’s oracle views on stock buybacks. Stock buybacks should only occur when the following conditions are met.

“First, the company has available funds— cash plus sensible borrowing capacity — beyond the near-term needs of the business and, second, finds its stock selling in the market below its intrinsic value, conservatively calculated,” said Warren Buffett in the late 90s.

“Buyback plans were getting a life of their own, and it’s gotten quite common to buy back stock at very high prices that really don’t do the shareholders any good at all” – Warren Buffett

Warren Buffett’s oracle views were made prior to the central bank unleashing it’s greatest currency creation program (known as quantitative easing-QE) which flooded the financial system with trillions of dollars.

So how have Warren Buffett’s oracle views on stock buybacks involved in the post QE world?

“Buyback plans were getting a life of their own, and it’s gotten quite common to buy back stock at very high prices that really don’t do the shareholders any good at all”… “Can you imagine somebody going out and saying, we’re going to buy a business and we don’t care what the price is?”, added Buffett.

“Buffett’s favorite gauge, which is the ratio of the total market capitalization to GDP stands at 132%, near an all-time high”

Warren Buffett’s oracle views on valuations based on his Market Cap to GDP (known as the Buffett indicator is also flashing red.

Buffett’s favorite gauge, which is the ratio of the total market capitalization to GDP stands at 132%, near an all-time high, except during the Tech boom in the late 1990’s when it shot over 140% just before the tech bust of the late 90s. So stock valuation is relatively high, according to the Buffett indicator. See Market Cap to GDP chart.

Moreover, Warren Buffett’s oracle views are to buy fixed assets in a post QE world.
Warren Buffett’s Burlington Northern Santa Fe (BNSF) railroad is an acquisition of hard assets.

If the central bank’s grand experiment all ends in hyperinflation then Warren Buffett’s fixed assets are likely to soar in value.

Warren Buffett’s oracle views are also about geographical diversification. He holds large offshore assets in Asia and elsewhere which generate non-dollar profits that can be held tax-free.