It isn’t the learning that’s so hard, but the unlearning. What is this galaxy doing without a dark matter halo? Munger: We have such a fingers and toes-little book of value investing pdf around here. Warren often talks about these discounted cash flows, but I’ve never seen him do one.

Buffett: Some things you only do in private, Charlie. We generally look at businesses and believe that change is likely to work against us. We do not think we have great ability to predict where change is going to lead. We think we have some ability to find businesses where we don’t think change is going to be very important. If you buy a stock and it goes down and that upsets you, it obviously means you think the market knows more about the company than you do. In that case you’re the patsy.

If you want to buy more because you know the business is worth just as much as when you bought it, perhaps a little more, so you buy more, it’s the patsy. Related book: Principles: Life and Work Stratechery 4. Invest Like the Best Podcast: Live Ep. This week’s episode was the first one that I’ve recorded live. It was the second dinner in what I expect to be a long series where I bring together 30 people from a variety of backgrounds to discuss an interesting and emerging topic, whether that be cryptocurrencies, health, cannabis investing, or some other compelling, emergent thing. Unfortunately in this kind of work, where you are trying to determine relationships based upon past behavior, the almost invariable experience is that by the time you have had a long enough period to give you sufficient confidence in your form of measurement, just then new conditions supersede and the measurement is no longer dependable for the future.

Hidden Forces Podcast: Can We Learn to Invest in the Future? This episode of the Skift podcast goes all in on Airbnb and the competitive threat it poses to traditional hotel companies and booking sites. Warren Buffett plans to make public a video archive of about 20 years of past Berkshire Hathaway Inc. Credit Quality: The Devil is in the Details – by Frank K. A really wonderful business is very well protected against the vicissitudes of the economy and competition over time.

And I’m talking about businesses that are resistant to effective competition. Three of those will be better than 100 average businesses. Related book: The Making of a Blockbuster Shkreli vs. Holmes: 2 Frauds, 2 Divergent Outcomes. What Makes Whales Strand Themselves Together? The great personal fortunes in this country weren’t built on a portfolio of 50 companies. They were built by someone who identified one wonderful business.

It’s amazing how well you can do in investing really with what I’d call “outside” information. I’m not sure how useful inside information is. But there’s all kinds of “outside” information around as to businesses. And you don’t have to understand all of them.

You just have to understand the ones you’re thinking about investing in. In my view, you can’t read Wall Street reports and get anything out of them. You’ve got to get your arms around it yourself. I don’t think we’ve ever gotten an idea from a Wall Street report. However, we’ve gotten a lot of ideas from annual reports. It takes a long time to read an annual report – even if the business is a comparatively simple one. If you’re really trying to understand it, it’s not a bit easy.

On average, in a business we’re really interested in – where we know what to skip to some extent and what to read – we’ll spend 45 minutes or an hour on a single annual report. If there are six or eight companies in the industry, that’s going to be six to eight hours. And then there are quarterlies and a lot of other . The way you learn about businesses is by absorbing information about ’em, deciding what counts and what doesn’t and relating one thing to another. You can’t get that by looking at a bunch of little numbers on a chart bobbing up and down or by reading market commentary, periodicals or anything of the sort.

You have to understand the businesses. That’s where it all begins and ends. Michael Jordan, or Tiger Woods, or whatever the sport is. You achieve that in this business only by having some kind of competitive advantages. You won’t do it just by having an ordinary insurance company – because an ordinary insurance company is not a good business. And it’s up to us to try and figure out ways to maximize each one of those competitive advantages over time. In 1967, we weren’t looked at that way in the insurance business.

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