워런 버핏
Longtime leader of Berkshire Hathaway who practiced long-term compounding by investing within his circle of competence in businesses with durable economic moats and margins of safety.
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Photo: USA International Trade Administration Public domain Original cropped
58 basic records of 389
Principles are our summary of their public statements.
Issuing shares to acquire another company is effectively selling a piece of your own business; it should only be done if the value received is equal to or greater than the value given up.
3 more supporting quotes are in the member records.
Business owners should avoid complex accounting structures that obscure the true economic reality of the company's performance.
Supporting quotes
Many corporations have been able to reduce their overhead expenses substantially by paying a large part of their executive salaries in the form of options to buy stock, which carry no charge against earnings.1 more supporting quote is in the member records.
A business is only great if its success is tied to the institution's reputation or cost structure rather than a single person's talent.
2 more supporting quotes are in the member records.
A company's prestigious reputation can persist long after its operational discipline has actually declined.
3 more supporting quotes are in the member records.
An investment should be sold when its market price reaches the estimated intrinsic value, regardless of how much it has already grown.
3 more supporting quotes are in the member records.
Credit risk is lower when customers intend to use a product for its primary purpose rather than for speculation.
1 more supporting quote is in the member records.
Over time, capital should naturally flow toward high-return businesses while stagnant ones consume a shrinking share of total resources.
1 more supporting quote is in the member records.
Do not view growth and value as opposing strategies; growth is simply a variable that can increase or decrease a business's intrinsic value.
3 more supporting quotes are in the member records.
When facing a major setback, one must exercise will to prevent that single failure from cascading into other areas of life or business.
A business that dominates its local market acts like an unregulated tollbooth, possessing immense pricing power because customers have no alternatives.
Treating partners fairly, even when not legally required, builds a reputation that attracts the best businesses.
A distressed company can be a great investment if a proven, capable leader is installed to engineer a turnaround. Identifying a 'legendary' operator who has a creative plan is key to catching a falling knife safely.
Introducing debt into a business increases the risk of a 'game over' scenario because it creates obligations that can lead to bankruptcy.
A strong reputation can make an investment less risky by attracting better deals and providing unique financing capabilities.
Ignoring or covering up illegal activities by employees can turn a minor violation into an existential threat to the company.
Management must inform the board of directors about legal investigations to ensure proper oversight and crisis management.
When dealing with internal corruption or mistakes, the strategy should be to get the facts right, act quickly, and disclose everything publicly.
By offering to keep existing management and avoid selling the business, a buyer can win deals even against higher bidders who seek short-term exits.
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