Comments on: Hedge Funds and the Early Buffett Partnership http://www.fwallstreet.com/article/169-hedge-funds-and-the-early-buffett-partnership Value Investing Blog Thu, 09 Sep 2010 02:28:59 -0500 http://wordpress.org/?v=2.9.2 hourly 1 By: bbhirschmann http://www.fwallstreet.com/article/169-hedge-funds-and-the-early-buffett-partnership#comment-3469 bbhirschmann Fri, 23 Jul 2010 02:21:57 +0000 http://www.fwallstreet.com/article/169-hedge-funds-and-the-early-buffett-partnership#comment-3469 The definition of accredited investor in the Securities Act of 1933 did not include a net worth requirement and thus Buffett Associates original partners did not have to be extremely wealthy. However, Regulation D, which specified a net worth requirement for accredited investors, was added to the Securities Act in 1982. This is based on internet research, so I'm not certain. But it may be the answer to the questions above. Original Act: http://www.sec.gov/about/laws/sa33.pdf Regulation D: http://www.law.uc.edu/CCL/33ActRls/rule501.html#history The definition of accredited investor in the Securities Act of 1933 did not include a net worth requirement and thus Buffett Associates original partners did not have to be extremely wealthy. However, Regulation D, which specified a net worth requirement for accredited investors, was added to the Securities Act in 1982.

This is based on internet research, so I’m not certain. But it may be the answer to the questions above.

Original Act:
http://www.sec.gov/about/laws/sa33.pdf

Regulation D:
http://www.law.uc.edu/CCL/33ActRls/rule501.html#history

]]> By: kalidasa http://www.fwallstreet.com/article/169-hedge-funds-and-the-early-buffett-partnership#comment-3169 kalidasa Wed, 03 Feb 2010 12:50:48 +0000 http://www.fwallstreet.com/article/169-hedge-funds-and-the-early-buffett-partnership#comment-3169 in correction to an earlier post, it is Sham Gad(www.gadcapital.com) or www.shamgad.blogspot.com in correction to an earlier post, it is Sham Gad(www.gadcapital.com) or http://www.shamgad.blogspot.com

]]> By: M Kishore http://www.fwallstreet.com/article/169-hedge-funds-and-the-early-buffett-partnership#comment-2761 M Kishore Sun, 15 Mar 2009 17:03:00 +0000 http://www.fwallstreet.com/article/169-hedge-funds-and-the-early-buffett-partnership#comment-2761 I spoke to an attorney about acc. inv and non acc. inv. He said u could have 2 funds - one for accredited and 1 for non acc. The # of partners u can take in the non acc. is limited to 35. for non acc. u can take only 2 % as fees for funds under mgt and no share of the profits. please check with another atorney to verify I spoke to an attorney about acc. inv and non acc. inv. He said u could have 2 funds – one for accredited and 1 for non acc. The # of partners u can take in the non acc. is limited to 35.

for non acc. u can take only 2 % as fees for funds under mgt and no share of the profits.

please check with another atorney to verify

]]> By: Cory http://www.fwallstreet.com/article/169-hedge-funds-and-the-early-buffett-partnership#comment-2760 Cory Wed, 11 Mar 2009 20:32:00 +0000 http://www.fwallstreet.com/article/169-hedge-funds-and-the-early-buffett-partnership#comment-2760 As far as I can tell, reading different descriptions of Buffett Associates in particular, none of Buffett's early investors were either qualified, nor accredited investors. Anyone have any insight into how his investors were either accredited or qualified? Or did he fall under a different exemption under the Act? I'd like an answer to this issue as well. As far as I can tell, reading different descriptions of Buffett Associates in particular, none of Buffett’s early investors were either qualified, nor accredited investors.

Anyone have any insight into how his investors were either accredited or qualified? Or did he fall under a different exemption under the Act?

I’d like an answer to this issue as well.

]]> By: M Kishore http://www.fwallstreet.com/article/169-hedge-funds-and-the-early-buffett-partnership#comment-2749 M Kishore Fri, 06 Mar 2009 03:30:09 +0000 http://www.fwallstreet.com/article/169-hedge-funds-and-the-early-buffett-partnership#comment-2749 Hi all; I have set up an inv. partnershi based on the Buffett Partnership. I would like some inputs on selecting an attorney to get the partnership agrement and other legal docs done. Any help would be appreciated with regards to what cost am I looking at etc. www.kishorecapital.com mk@kishorecapital.com Hi all;

I have set up an inv. partnershi based on the Buffett Partnership. I would like some inputs on selecting an attorney to get the partnership agrement and other legal docs done.

Any help would be appreciated with regards to what cost am I looking at etc.

http://www.kishorecapital.com

mk@kishorecapital.com

]]> By: Roman http://www.fwallstreet.com/article/169-hedge-funds-and-the-early-buffett-partnership#comment-2739 Roman Wed, 04 Mar 2009 04:36:04 +0000 http://www.fwallstreet.com/article/169-hedge-funds-and-the-early-buffett-partnership#comment-2739 As the fund (hedge, LP) manager, when do you actually draw money from the fees or profits? Suppose you have a 2/20 fund, do you draw money from each partner monthly (2%/12) or at the end of each year? or when partners decide to take money out maybe? Thanks As the fund (hedge, LP) manager, when do you actually draw money from the fees or profits? Suppose you have a 2/20 fund, do you draw money from each partner monthly (2%/12) or at the end of each year? or when partners decide to take money out maybe?

Thanks

]]> By: Noel http://www.fwallstreet.com/article/169-hedge-funds-and-the-early-buffett-partnership#comment-2629 Noel Fri, 30 Jan 2009 21:28:51 +0000 http://www.fwallstreet.com/article/169-hedge-funds-and-the-early-buffett-partnership#comment-2629 Further to my point, check out this video of Don Keough (former President of Coca-Cola) who was a neighbour of Warren Buffett being interviewed by Michael Esiner about why he didn't give a young Warren Buffett (his neighbour at the time) money to invest in 1960. His reasons were that this was a guy who "had no celebrity at the time", "did some funny thing on the telephone" and "didn't even go to work". Also, when Don came home from work and he asked his kids what they did all day they'd say that Warren took them to the park, showed them his train set, etc. So he couldn't imagine giving money to this young guy. And, now, also remember Warren approached him in 1960 when he had already run his other partnerships for 4 years and short track record. Now imagine, given Don's view of Warren, if he also knew that Warren was worth hundreds of thousands of dollars and wasn't even putting in a penny of his own money (1960 is 4 years after Warren already had a $160,000 stock portfolio). Behind the scenes was Warren intelligent? Yes. Dedicated? Yes. An astute investor? Yes. But that was only proven years later. His behaviour with keeping all his vast resources separate when he formed his partnerships just doesn't paint a picture of a guy who is putting his money where his mouth is. And, in the end, talk is cheap, but putting your money on the line is unequivocal. <a href="http://www.youtube.com/v/6jAB0eJk2E4" title="http://www.youtube.com/v/6jAB0eJk2E4" target="blank" rel="nofollow">http://www.youtube.com/v/...</a> Further to my point, check out this video of Don Keough (former President of Coca-Cola) who was a neighbour of Warren Buffett being interviewed by Michael Esiner about why he didn’t give a young Warren Buffett (his neighbour at the time) money to invest in 1960. His reasons were that this was a guy who “had no celebrity at the time”, “did some funny thing on the telephone” and “didn’t even go to work”. Also, when Don came home from work and he asked his kids what they did all day they’d say that Warren took them to the park, showed them his train set, etc. So he couldn’t imagine giving money to this young guy. And, now, also remember Warren approached him in 1960 when he had already run his other partnerships for 4 years and short track record.

Now imagine, given Don’s view of Warren, if he also knew that Warren was worth hundreds of thousands of dollars and wasn’t even putting in a penny of his own money (1960 is 4 years after Warren already had a $160,000 stock portfolio). Behind the scenes was Warren intelligent? Yes. Dedicated? Yes. An astute investor? Yes. But that was only proven years later. His behaviour with keeping all his vast resources separate when he formed his partnerships just doesn’t paint a picture of a guy who is putting his money where his mouth is. And, in the end, talk is cheap, but putting your money on the line is unequivocal.

http://www.youtube.com/v/...

]]> By: Noel http://www.fwallstreet.com/article/169-hedge-funds-and-the-early-buffett-partnership#comment-2627 Noel Thu, 29 Jan 2009 16:30:15 +0000 http://www.fwallstreet.com/article/169-hedge-funds-and-the-early-buffett-partnership#comment-2627 Astute investors only invest with (money) managers who have their own skin (ie funds) in the game. That's the problem with Wall St and the reason for the excess we've seen. They gained if things went well, but lost nothing if it didn't. Feelings, caring, wanting to do a good job, etc. and $1 will get you a cup of coffee. But a guy who manages your money and is going to really suffer financially when you do is the only thing that aligns your interests. Astute investors only invest with (money) managers who have their own skin (ie funds) in the game. That’s the problem with Wall St and the reason for the excess we’ve seen. They gained if things went well, but lost nothing if it didn’t. Feelings, caring, wanting to do a good job, etc. and $1 will get you a cup of coffee. But a guy who manages your money and is going to really suffer financially when you do is the only thing that aligns your interests.

]]> By: robin http://www.fwallstreet.com/article/169-hedge-funds-and-the-early-buffett-partnership#comment-2602 robin Fri, 23 Jan 2009 07:03:30 +0000 http://www.fwallstreet.com/article/169-hedge-funds-and-the-early-buffett-partnership#comment-2602 Do the readers know how Buffet's partnership (aka an early hedge fund) was different from 'separately managed accounts' hedge funds? Any advice on how a person looking to start a partnership should organize as one pool of funds or separately managed? Comments appreicated... Do the readers know how Buffet’s partnership (aka an early hedge fund) was different from ’separately managed accounts’ hedge funds? Any advice on how a person looking to start a partnership should organize as one pool of funds or separately managed?

Comments appreicated…

]]> By: Mark http://www.fwallstreet.com/article/169-hedge-funds-and-the-early-buffett-partnership#comment-2567 Mark Sun, 04 Jan 2009 10:59:56 +0000 http://www.fwallstreet.com/article/169-hedge-funds-and-the-early-buffett-partnership#comment-2567 I believe a guy named Sam Ghad (or something like that) has started a Buffett type partnership. I believe a guy named Sam Ghad (or something like that) has started a Buffett type partnership.

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