Macro opinions

Forming macro opinions or listening to the macro or market predictions of others is a waste of time. Indeed, it is dangerous because it may blur your vision of the facts that are truly important. (When I hear TV commentators glibly opine on what the market will do next, I am reminded of Mickey Mantle’s scathing comment : “You don’t know how easy this game is until you get into that broadcasting booth.”)


Charlie (Munger) and I never have an opinion on the market because it wouldn’t be any good and it might interfere with the opinions we have that are good.


The fact that people will be full of greed, fear, or folly is predictable. The sequence is not predictable.

To jump in or out of the stock

In any business, there are going to be all kinds of factors that happen next week, next month, next year, and so forth. But the really important thing is to be in the right business. The classic case is Coca-Cola, which went public in 1919. They initially sold stock at $40 a share. The next year, it went down to $19. Sugar prices had changed pretty dramatically after World War 1. So you would have lost half of your money one year later if you’d bought the stock when it first came public ; but if you owned that share today – and had reinvested all of your dividends – it would be worth about $1.8 million. We have had depressions. We have had wars. Sugar prices have gone up and down. A million things have happened. How much more fruitful is it for us to think about whether the product is likely to sustain itself and its economies than to try to be questioning whether to jump in or out of the stock ?


Most analysts feel they must choose between two approaches customarily thought to be in opposition: “value” and “growth.”… In our opinion, the two approaches are joined at the hip : growth is always a component in the calculation of value.