Thereafter, you need only monitor whether these qualities are being preserved.- Our reaction to a fermenting industry (a new initiative which we don’t understand fully) is much like our attitude toward space exploration: We applaud the endeavor but prefer to skip the ride.- You can, of course, pay too much for even the best of businesses.- You only have to be able to evaluate companies within your circle of competence.
The size of that circle is not very important; knowing its boundaries, however, is vital.- Your goal as an investor should simply be to purchase, at a rational price, a part interest in an easily-understandable business whose earnings are virtually certain to be materially higher five, ten and twenty years from now.- If you aren't willing to own a stock for ten years, don't even think about owning it for ten minutes.
They are quite literally "from the horse's mouth." The substantial value-added benefits include the fact that Buffett thinks and writes so clearly, duly acknowledges bad decisions and personal regrets (yes, there were several), explains what he learned from them, and meanwhile reveals a playful (albeit dry) sense of humor.
He also includes a number of personal observations about America, especially about its culture and economy, at various times throughout the last 25-30 years.
I don't have much domain knowledge in Finance and thought how I will be able to understand the jargon. A Company is the sum of its management:- Directors therefore must be chosen for their business savvy, their interest, and their owner-orientation - Owner like attitude of the directors- The outside board members should establish standards for the CEO's performance and should also periodically meet, without his being present, to evaluate- Too often, directors are selected simply because they are prominent or add diversity to the board.
One read later I can say that I already understand some of the things a little bit better. You might consider them spoilers but there are no spoilers in non-fiction. That practice is a mistake.- An owner on the board should be the most effective in insuring first-class management.- Better managers make better company –One of the point buffet emphasized was to attract and keep outstanding managers to run our various operations.
- If at first you do succeed, quit trying.- Our goal is to find an outstanding business at a sensible price, not a mediocre business at a bargain price.- The best business to own is one that over an extended period can employ large amounts of incremental capital at very high rates of return.- First, we try to stick to businesses we believe we understand.- Second, and equally important, we insist on a margin of safety in our purchase price.
If we calculate the value of a common stock to be only slightly higher than its price, we're not interested in buying.- You simply want to acquire, at a sensible price, a business with excellent economics and able, honest management.
The definitive work concerning Warren Buffett and intelligent investment philosophy, this is a collection of Buffett's letters to the shareholders of Berkshire Hathaway written over the past few decades that together furnish an enormously valuable informal education.
The letters distill in plain words all the basic principles of sound business practices.