“Just as one deal falls off the cliff, another potential suitor is there to maybe catch it,” reported Liz Claman of Fox Business in her after-hours web exclusive, Claman on Call.
“[…] We’re talking about DISH Network Corp (NASDAQ:DISH)’s chairman, Charlie Ergen, hinting today that he might be interested in buying wireless carrier T-Mobile US Inc (NYSE:TMUS). This comes on the heels of Sprint Corporation (NYSE:S) dropping out of the race for T-Mobile”, clarified Claman.
DISH Network Corp (NASDAQ:DISH)’s CEO has been fond of Sprint Corporation (NYSE:S) itself and was entirely convinced of its potential to do much more to improve the wireless industry. In fact, he tried his hand at acquiring Sprint last year, but lost to the Japanese wireless carrier Softbank Corp. He seemed impressed by Sprint Corporation (NYSE:S)’s wireless spectrum and had plans to test a small scale wireless broadband project with it.
If there’s one thing that DISH Network Corp (NASDAQ:DISH) had in surplus, it was foresight. The American satellite service provider seems to have accumulated a vast spectrum over the years and is planning to put it to good use. With dwindling pay-TV subscribers, Ergen believed that the future is in wireless media to cater to the smartphone wielding millennial.
With the spectrum auctions to start on September 12th, DISH Network Corp (NASDAQ:DISH) can be expected to make a formal announcement anytime soon. Now that Sprint Corporation (NYSE:S) is no longer in the race, Dish is reported to have renewed interest in this matter. Analysts say that T-Mobile US Inc (NYSE:TMUS)’s expertise in the wireless technology combined with DISH Network Corp (NASDAQ:DISH)’s ’s spectrum availability is a sure shot winning combo.
Warren Buffett never mentions this but he is one of the first hedge fund managers who unlocked the secrets of successful stock market investing. He launched his hedge fund in 1956 with $105,100 in seed capital. Back then they weren’t called hedge funds, they were called “partnerships”. Warren Buffett took 25% of all returns in excess of 6 percent.
For example S&P 500 Index returned 43.4% in 1958. If Warren Buffett’s hedge fund didn’t generate any outperformance (i.e. secretly invested like a closet index fund), Warren Buffett would have pocketed a quarter of the 37.4% excess return. That would have been 9.35% in hedge fund “fees”.
Actually Warren Buffett failed to beat the S&P 500 Index in 1958, returned only 40.9% and pocketed 8.7 percentage of it as “fees”. His investors didn’t mind that he underperformed the market in 1958 because he beat the market by a large margin in 1957. That year Buffett’s hedge fund returned 10.4% and Buffett took only 1.1 percentage points of that as “fees”. S&P 500 Index lost 10.8% in 1957, so Buffett’s investors actually thrilled to beat the market by 20.1 percentage points in 1957.
Between 1957 and 1966 Warren Buffett’s hedge fund returned 23.5% annually after deducting Warren Buffett’s 5.5 percentage point annual fees. S&P 500 Index generated an average annual compounded return of only 9.2% during the same 10-year period. An investor who invested $10,000 in Warren Buffett’s hedge fund at the beginning of 1957 saw his capital turn into $103,000 before fees and $64,100 after fees (this means Warren Buffett made more than $36,000 in fees from this investor).
As you can guess, Warren Buffett’s #1 wealth building strategy is to generate high returns in the 20% to 30% range.
We see several investors trying to strike it rich in options market by risking their entire savings. You can get rich by returning 20% per year and compounding that for several years. Warren Buffett has been investing and compounding for at least 65 years.
So, how did Warren Buffett manage to generate high returns and beat the market?
In a free sample issue of our monthly newsletter we analyzed Warren Buffett’s stock picks covering the 1999-2017 period and identified the best performing stocks in Warren Buffett’s portfolio. This is basically a recipe to generate better returns than Warren Buffett is achieving himself.
You can enter your email below to get our FREE report. In the same report you can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12-24 months. We initially share this idea in October 2018 and the stock already returned more than 150%. We still like this investment.
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