Warren Buffett a ‘living legend’ is so much more than a value investor: Portfolio Manager
Jonathan Boyar, Principal & Portfolio Manager at Boyar Asset Management, joins Yahoo Finance’s Sibile Marcellus and Alexis Christoforous to discuss outlook on Berkshire’s annual shareholders meeting.
SIBILE MARCELLUS: The Berkshire Hathaway Annual Shareholders Meeting is happening in LA, taking place in tomorrow. And it will be livestreamed on Yahoo Finance, right here. Now I want to bring in Jonathan Boyar. He's principal and portfolio manager at Boyer Asset Management and host of "The World According to Boyar" podcast. Now, Jonathan, Warren Buffett is a legend. Can you talk a little bit about his investment strategy when it comes to value investing?
JONATHAN BOYAR: Sure, first, thanks for having me on the show. And yes, I mean, he's a living legend. It's unfortunate that I'm not going to be able to go, like everyone else, to Omaha this year. And hopefully next year, they have it in person. Warren Buffett is what's described as a value investor. But he's so much more than that. I would describe him as an opportunistic investor. Through the years, his style of investing has changed from buying really cheap companies to buying higher quality companies at a reasonable price. And he's evolved through the times. And that's why his long term record is so much better than pretty much anyone.
ALEXIS CHRISTOFOROUS: What about some of his individual stock picks? I mean, he's been a long holder of Coca-Cola, but he himself admits the Wells Fargo bet wasn't a great one. The airline bet wasn't a great one. What do you make of how his philosophy has changed? I mean, even you look at big tech. It took him a while to get into Apple. I mean, he's finally in there in a big way now. But what's your big takeaway from how Warren Buffett's trading philosophies have changed over the past even decade?
JONATHAN BOYAR: Well, I mean, he's evolved with the times but the foremost-- the thing that's most important is, he takes a valuation-based approach. And the Coca-Cola example is actually a great one. He has held Coke since the '70s-- or since the 1980s or so. And his cost basis is negligible. And what's been great for shareholders and what's critically important is, he's been able to grow shareholders' capital by holding on to that stake virtually tax free for all those years. So he loves buying a great company at a reasonable valuation that you can hold on to forever. And that's what I think investors really need to be doing.
SIBILE MARCELLUS: Jonathan, buy low, sell high. Buy a great company at a reasonable price. This seems like common sense pretty much for investors. But what is it about Warren Buffett's approach that makes him so successful at finding those instances and capitalizing on it?
JONATHAN BOYAR: Yeah, I mean, buy low, sell high is-- it does sound simple. In practice, it's much harder to do. But it's much more than that. The most important thing an investor can do to try and ensure his or her long-term success, it's the price one pays. That's the most important part of investing. So you have to obviously buy low.
But not only do you have to buy low, you have to buy low in companies like a Coca-Cola, for example, when Buffett bought it, that can grow and compound nicely over time so you can have that magic of tax-deferred compounding work for you. So that's the real kind of secret sauce and one of the reasons why he's so successful. He's not trying to buy a company for it to just double in price. He wants to buy a company and hold on to it for as long as humanly possible.
SIBILE MARCELLUS: Yes, we'll definitely be paying close attention tomorrow as we're seeing the Berkshire Hathaway Annual Shareholders Meeting happen live on Yahoo Finance. Jonathan Boyar, thanks so much.
JONATHAN BOYAR: Thanks for having me.