It must be noted that your chair man, always a quick study, required only 20 years to recognize how important it was to buy good businesses. In the interim, I searched for bargains and had the misfortune to find some. My punishment was an education in the economics of short-line farm equipment, third place department stores, and New England textile manufacturers.
Experience, however indicates that the best business returns are usually achieved by companies that are doing something quite similar today to what they were doing 5 or 10 years ago.But a business that constantly encounters major change also encounters many chances for major error.
To the extent we have been successful, it is because we concentrated on identifying one foot hurdles that we could step over rather than because we acquired any ability to clear seven footers. The finding may seem unfair, but in both business and investments it is usually far more profitable to simply stick with the easy and obvious than it is to resolve the difficult.
What counts for most people in investing is not how much they know, but rather how realistically they define what they don't know. An investor needs to do very few things right as long as he or she avoids big mistakes.
Every day, in countless ways, the competitive position of each of our businesses grows either weaker or stronger. If we are delighting customers, eliminating unnecessary costs and improving our products and services, we gain strength. But if we treat customers with indifference or tolerate bloat, our businesses will wither. On a daily basis effects of our actions are imperceptible; cumulatively though there are consequences that are enormous.
If the choice is between a questionable business at a comfortable price or a comfortable business at questionable price, we much prefer the latter. What really gets our attention, however, is a comfortable business at a comfortable price.
Home ownership is a wonderful thing. My family and I have enjoyed my present home for 50 years, with more to come. But enjoyment and utility should be the primary motivation for purchase, not profit or refi possibilities. And the home purchased ought to fit the income of the purchaser.
Experience, however indicates that the best business returns are usually achieved by companies that are doing something quite similar today to what they were doing 5 or 10 years ago.But a business that constantly encounters major change also encounters many chances for major error.
To the extent we have been successful, it is because we concentrated on identifying one foot hurdles that we could step over rather than because we acquired any ability to clear seven footers. The finding may seem unfair, but in both business and investments it is usually far more profitable to simply stick with the easy and obvious than it is to resolve the difficult.
What counts for most people in investing is not how much they know, but rather how realistically they define what they don't know. An investor needs to do very few things right as long as he or she avoids big mistakes.
Every day, in countless ways, the competitive position of each of our businesses grows either weaker or stronger. If we are delighting customers, eliminating unnecessary costs and improving our products and services, we gain strength. But if we treat customers with indifference or tolerate bloat, our businesses will wither. On a daily basis effects of our actions are imperceptible; cumulatively though there are consequences that are enormous.
If the choice is between a questionable business at a comfortable price or a comfortable business at questionable price, we much prefer the latter. What really gets our attention, however, is a comfortable business at a comfortable price.
Home ownership is a wonderful thing. My family and I have enjoyed my present home for 50 years, with more to come. But enjoyment and utility should be the primary motivation for purchase, not profit or refi possibilities. And the home purchased ought to fit the income of the purchaser.
