Wrong kind of soil

I personally think that society is responsible for a very significant percentage of what I’ve earned. If you stick me down in the middle of Bangladesh or Peru or someplace, you’ll find out how much this talent is going to produce in the wrong kind of soil. I will be struggling thirty years later. I work in a market system that happens to reward what I do very well – disproportionately well.

Policy of candor

Despite our policy of candor, we will discuss our activities in marketable securities only to the extent legally required. Good investment ideas are rare, valuable and subject to competitive appropriation just as good product or business acquisition ideas are.

Dealmaking

Talking to Time Magazine a few years back, Peter Drucker got to the heart of things : “I will tell you a secret : dealmaking beats working. Dealmaking is exciting and fun, and working is grubby. Running anything is primarily an enormous amount of grubby detail work… dealmaking is romantic, sexy. That’s why you have deals that make no sense.

Subnormal profitability

I won’t close down a business of subnormal profitability merely to add a fraction of a point to our corporate returns. I also feel it inappropriate for even an exceptionally profitable company to fund an operation once it appears to have unending losses in prospect. Adam Smith would disagree with my first proposition and Karl Marx would disagree with my second; the middle ground is the only position that leaves me comfortable.

Correctly evaluate selected businesses

What an investor needs is the ability to correctly evaluate selected businesses. Note that word “selected” : You don’t have to be an expert on every company, or even many. You only have to be able to evaluate companies within your circle of competence. The size of that circle is not very important ; knowing its boundaries, however, is vital.

The greatest business in the world

I call investing the greatest business in the world … because you never have to swing. You stand at the plate, the pitcher throws you General Motors at 47$ U.S. Steel at 39$ and nobody calls a strike on you. There’s no penalty except opportunity lost. All day you wait for the pitch you like ; then when the fielders are asleep, you step up and hit it.