Quotes – Buffet’s letters

Stick with big, “easy” decisions and eschew activity

In our search for new stand-alone businesses, the key qualities we seek are 1 durable competitive strengths; 2 able and high-grade management; 3 good returns on the net tangible assets required to operate the business; 4 opportunities for internal growth at attractive returns; and, finally, 5 a sensible purchase price.

Even if your borrowings are small and your positions aren’t immediately threatened by the plunging market, your mind may well become rattled by scary headlines and breathless commentary. And an unsettled mind will not make good decisions.

When major declines occur, however, they offer extraordinary opportunities to those who are not handicapped by debt. 

What investors then need instead is an ability to both disregard mob fears or enthusiasms and to focus on a few simple fundamentals. A willingness to look unimaginative for a sustained period – or even to look foolish – is also essential.

The less the prudence with which others conduct their affairs, the greater the prudence with which we must conduct our own.

The company and the man are inseparable.

Tony Nicely and GEICO, 2018