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Post of the Day
March 16, 1999

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Subject: #95/101 NO GIMMICKS
Author: simpleinvestor

There's no gimmicks to Berkshire. You won't find derivatives, margin, options, unit investment trusts, shorting foriegn currencies, hedge funds, offshore shennagans, greenmail, hostile takeovers, or lawsuits.

You won't hear about Berkshire on any informercial boasting get rich quick schemes. Or being investigated by a state or federal attorney general. You'll never hear Mr. Buffett recommend his own stock. And the only book you will find written by him is a compilation of his annual letters to shareholders.

While others promise riches with day trading, futures, commodities, real estate, books, and seminars. Berkshire offers no such gimmicks.

You seen, read, and heard about the gimmicks. The incredible money making stock market strategies. Workshops to take you from zero to zillion, excessive short term trading, penny stocks, foreclosures, spin offs, bankruptcy, initial public offerings (IPO), turnarounds, buying a stock before it splits and then selling it after it splits, buying stocks before x-dividend dates, market timing, leveraged options, how to think like a millionaire, how to control assets without ownership, tax strategies, and turn $1300 into $1 million in 3 years.

Here's the outline for one money machine seminar: perpetual monthly income, make money on every deal, how to get rich in spite of the tax laws, the power of real estate, the secrets of leveraging money, distressed properties, secrets of foreclosures, millionaire secrets and strategies, buying real estate without cash, maximizing your cash flow, start making offers now, find deals that yield 40 percent or more, and thats not all.

Books, seminars, tapes, workshops, workbooks, testimonials, you name it and its out there.

You've seen the ads. Double your money every 2 1/2 to 4 months by writing covered calls is one of my favorites. One company has even gone as far as creating a wealth institute, a way to chart your financial future while providing graduate level financial instruction.

If these gimmicks are so successful why would they advertise them, why would they charge for them, and why wouldn't everyone else do the same thing? Why not just take all the wealth institute knowledge and become so wealthy that you create the world's largest foundation and give it all away for the betterment of the world?

A major brokerage firm just sent me a old favorite stock market gimmick, 'the dogs of the dow'. Buy the 10 highest dividend yielding stocks in the Dow than every year 'rebalance'. So every year you are buying, selling, transacting, and for this priviledge you pay your broker 1.48% the first year and 1.23% each subsequent year. And what they don't tell you, if you do this in a taxable account you get a tax invoice from your broker each year. Subtract another 3% each year for taxes. So this doggone gimmick doesn't disclose friction costs.

With Berkshire there are no gimmicks, no false advertising, no bravado, no letters of endorsement, no fund czar, no analysts, no brokers. Nobody is paid to sell you on Berkshire.

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