Warren Buffett made a Dow 1,000,000 call this week. He thinks it will be surpassed in the next 100 years.
It’s hard to imagine a century from now. That number might even seem impossible to some people, but the math checks out. It works out to a conservative 3.8% annual return over the next century.
Really, the number is not that important. What is important is Buffett’s faith in America’s ability to offer a competitive advantage for businesses over the next century. And if businesses have the opportunity to do well, workers do well, the country does well, and owner’s of businesses (investors) will prosper.
Anyways, his comment was made at a celebration for Forbes 100 Greatest Living Business Minds, which was published this week. And each of the 100 people shared some thoughts on success, mistakes, the future, and other topics. I haven’t read them all, but here’s a few that stood out:
When we applied data to decision making and relied on objective reasoning, it was held to a perfect standard. If it was not correct 100% of the time, the response was “I told you that number s–t doesn’t work.” But it did work. And then we had to evolve again. As soon as you think you’ve completely figured it out, you’re probably in trouble. Every business is a living document, an algorithm that needs to be improved. — Billy Beane
My biggest mistake was that I always sold stocks way too early… I sold way too early on Home Depot. I sold too early on Dunkin’ Donuts. Why did I do that? I was dumb. With great companies the passage of time is a major positive. — Peter Lynch
We take tons of risks in life, whether personal risks or business risks. We sometimes fall flat on our face. But people don’t mind people who try things and fail. — Richard Branson
When a door closes, if you look long enough and hard enough, if you’re strong enough, you’ll find a window that opens. — Jack Bogle
Organizations resist innovation and those that do inevitably fail because people are more comfortable with what they know than with what they don’t. — Michael Bloomberg
But ultimately, there’s one investment that supersedes all others: Invest in yourself. Address whatever you feel your weaknesses are, and do it now… Nobody can take away what you’ve got in yourself — and everybody has potential they haven’t used yet. If you can increase your potential 10%, 20% or 30% by enhancing your talents, they can’t tax it away. Inflation can’t take it from you. You have it the rest of your life. — Warren Buffett
It’s a nice collection to browse through between football games this weekend.
- The Bubble Investors Least Expect – Intrinsic Investing
- The U.S. Stock Market Looks Like it Did Before Previous Bear Markets – R. Shiller
- Bond Investors Rationalize the Unrealistic – BloombergView
- U.S. Stock Records Look Nice But Pale Against the World – N. Kaissar
- The Two Sides of Doing Nothing – B. Portnoy
- Why Selling a Big Position of Puts Before the ’87 Crash was a Great Trade – J. O’Shaughnessy
- The Lie of Averages – Flirting with Models
- Myths, Markets, and Easy Money – C. Bilello
- Social Proof in the Markets – B. Carlson
- And the Crowd Goes Wild – Dollars and Data
- Intuition Is Vastly Overrated – M. Mauboussin
- The Case for Stock Buybacks – HBR
- The Difference Between Open-Minded and Close-Minded People – Farnam Street