In the end, alchemy, whether it is metallurgical or financial, fails. A base business can not be transformed into a golden business by tricks of accounting or capital structure. The man claiming to be a financial alchemist may become rich. But gullible investors rather than business achievements will usually be the source of his wealth.
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).
Anything can happen in stock markets and you ought to conduct your affairs so that if the most extraordinary events happen, that you're still around to play the next day.
I don't want to give a lecture to this body that's out there. You know, I mean, having had the heart attack, I want to get it back functioning. And as a practical matter, I mean if you were Bear Stearns, and you were a shareholder, you know, you lost 90 to 95 percent of your money. A good many lost their jobs. They lost very cushy lives, many of them.
A prediction about the direction of the stock market tells you nothing about where stocks are headed, but a whole lot about the person doing the predicting.
I'm always interested in understanding the math of things and understanding as much as I can about all aspects of business. And what I learn today may be useful to me two years from now. That's really the wonderful thing about investments is your knowledge is cumulative.
Businesses always have opportunities to improve service, product lines, manufacturing techniques, and the like, and obviously these opportunities should be seized. But a business that constantly encounters major change also encounters many chances for major error
Investing in a market where people believe in efficiency is like playing bridge with someone who has been told it doesn't do any good to look at the cards.