We’ve seen what happens to companies whose chief executive gets the best press. They are often the ones who end up with the least profits.
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We tried to buy good companies to start with. We don’t think there are supermen who can renovate them and transform them into wonderful, highly profitable enterprises. We can’t do it, and history shows that nobody else can do it, either.
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Our accounting is set to maximize cash flow, not reported earnings. Smoothing reported earnings just has to take a backseat.
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I do not define my job in any rigid terms but in terms of having the freedom to do what seems to me to be in the best interests of the company at any time.
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Our attitude toward cash generation and asset management came out of our own thought process. It is not copied. After we acquired a number of businesses we reflected on aspects of business. Our own conclusion was that the key was cash flow.
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I like to steer the boat each day rather than plan ahead way into the future.
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If we use prediction as the measure of a model, traditional finance makes precisely wrong predictions.
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I think a weakness of many people’s approach to investment is that they try to be jacks of all trades and masters of none.
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As a rule, Panics do not destroy capital; they merely reveal the extent to which it has been previously destroyed by its betrayal into hopelessly unproductive works.
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The malady of commercial crisis is not, in essence, a matter of the purse but of the mind.
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I have this motto in life as well as in business, which is: every day, I’m lucky if I have learned something new and I’m doubly lucky if it hadn’t cost too much.
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It’s now a rent-a-stock industry, compared with the old own-a-stock industry when turnover was 16 percent and the average holding period was six years.
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Speculation is a loser’s game. Because of the costs, it has to be a loser’s game.
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We all know that the best rule for investors — the clients of the investment business — is, “Don’t just do something — stand there.”
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If your preference is managed funds, you want a managed fund that, one might put it, is like a sailboat fighting not a typhoon of costs but only a breeze.
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I’ve often said that the efficient market hypothesis, or EMH, has a lot of truth to it, but the CMH — or “cost matters hypothesis” — is eternally truthful to the last penny.
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At times of shock, converting illiquid assets to cash to build flexibility is very expensive. Finding an umbrella in a rain storm might be impossible or very costly.Back to top. Source: Link
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Once a boom is well started, it cannot be arrested. It can only be collapsed.
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It is the sovereign privilege of a free citizen to lose his money precisely as he pleases.
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It’s important to recognize that the riskiness of investing comes only partly from the things you invest in. A lot of the risk comes from the behavior of the participants.
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Extrapolation is usually right, but not valuable, and predictions of deviation from trends are potentially profitable but rarely right. So far, macro-economic forecasting doesn’t represent the path to superior investments.
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There’s no asset so good that it can’t be overpriced and become a bad investment, and very few assets are so bad they can’t be underpriced and be a good investment.
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