We do not have, nor have had, and never will have an opinion about where the stock market, interest rates, or business activity will be a year from now.
The market system rewards me outlandishly for what I do, but that doesn't mean I'm any more deserving of a good life than a teacher or a doctor or someone who fights in Afghanistan.
We have to live with the rest of the world. And it's a mistake, in my view. Trade has generally developed in this country. We actually export 12 or 13 percent of our GDP. It was only 5 percent in 1970. But it benefits us. It benefits the rest of the world. It doesn't benefit the steelworker maybe in Ohio. And that's the problem that has to be addressed, because when you have something that's good for society, but terribly harmful for given individuals, we have got to make sure those individuals are taken care of.
Cash, though, is to a business as oxygen is to an individual: never thought about when it is present, the only thing in mind when it is absent... When bills come due, only cash is legal tender. Don't leave home without it.
I make plenty of mistakes and I'll make plenty more mistakes, too. That's part of the game. You've just got to make sure that the right things overcome the wrong ones.
We still find very few [stocks] that even mildly interest us. That dismal fact is testimony to the insanity of valuations reached during The Great Bubble. Unfortunately, the hangover may prove to be proportional to the binge.
People went crazy with tulip bulbs. They went crazy with the South Sea Bubble, they went crazy internet stocks, they went crazy with the uranium stocks back when I was first getting started.
Our investments continue to be few in number and simple in concept: The truly big investment idea can usually be explained in a short paragraph. We like a business with enduring competitive advantages that is run by able and owner-oriented people. When these attributes exist, and when we can make purchases at sensible prices, it is hard to go wrong (a challenge we periodically manage to overcome).
I wouldn't want to manufacture cigarettes. But if I owned - we do own Costco. Do they sell them? Yes. So I don't have a problem owning stock in that. But I just wouldn't want to - I wouldn't want to do it myself. I basically think, if anything is sufficiently antisocial, society should do something about it. But that's a separate question. But - and I don't think there's any company that I have seen that's 100 percent pure.
You have to be able to communicate in life and probably schools underemphasize that. If you can't talk to people or write, you're giving up your potential.
The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company and, above all, the durability of that advantage.
People who watch their weight, golf scores, and fuel bills seem to shun quantitative evaluation of their investment management skills although it involves the most important client in the world-themselves.
If you have more than 120 or 130 I.Q. points, you can afford to give the rest away. You don't need extraordinary intelligence to succeed as an investor.