I may have more money than you, but money doesn't make the difference. If
there is any difference between you and me, it may simply be that I get up and have a chance to do what I love to do, every day. If you learn anything from me, this is the best advice I can give you.
One of the ironies of the stock market is the emphasis on activity. Brokers, using terms such as 'marketability' and 'liquidity,' sing the praises of companies with high share turnover... but investors should understand that what is good for the croupier is not good for the customer. A hyperactive stock market is the pick pocket of enterprise.
I mean, you can explain the fact that these are depressed prices, you know. We think these assets are going to be worth a lot more. And I think that case can be made in certain situations. But I think to just say, you know, we're going to say a dollar of cash is worth $2 all of a sudden, it isn't worth $2. It's worth a dollar today.
Accounting consequences do not influence our operating or capital-allocation decisions. When acquisition costs are similar, we much prefer to purchase $2 of earnings that is not reportable by us under standard accounting principles than to purchase $1 of earnings that is reportable.
Lethargy bordering on sloth remains the cornerstone of our investment style. The exception was Wells Fargo, a superbly-managed, high-return banking operation in which we increased our ownership to just under 10%, the most we can own without the approval of the Federal Reserve Board.
It's quite clear that stocks are cheaper than bonds. I can't imagine anybody having bonds in their portfolio when they can own equities, a diversified group of equities. But people do because they, the lack of confidence. But that's what makes for the attractive prices. If they had their confidence back, they wouldn't be selling at these prices. And believe me, it will come back over time.
The latter qualification brings to mind a fellow who applied for a job and stated he had twenty years of experience-which was corrected by a former employer to read "one year's experience-twenty times.
If I taught a class, on my final exam I would take an Internet company and ask, 'How much is this company worth?' Anyone who would answer, I would flunk.
I've made money over the years by buying into good companies, run by good people, at attractive prices. And I don't try and make it out of buying into the market at one point and selling at another point.