If you have mediocrity and you have a bunch of friends on the board, it’s certainly not the kind of test you put a football team through. If the coach of a football team puts 11 lousy guys out on the field, he loses his job. The board never loses their job because they’ve got a mediocre CEO. So, you’ve got none of that self-cleansing type of operation that works with all other jobs.
I like a business that, when it’s not managed at all, still makes lots of money. That’s my kind of business.
You’ve got to understand accounting. You’ve got to. That’s got to be like a language to you. You have to know what you’re reading. Some people have more aptitude for that than others, but that’s one thing I learned by myself. Now, I took courses afterwards, for example. But I learned it myself, and largely. So, you have to do that.
The best CEOs
The best CEOs love operating their companies and don’t prefer going to Business Round Table meetings or playing golf at Augusta National.
If we find a company we like, the level of the market will not really impact our decisions. We will decide company by company. We spend essentially no time thinking about macroeconomics factors. In other words, if somebody handed us a prediction by the most revered intellectual on the subject, with figures for unemployment or interest rates or whatever it might be for the next two years, we would not pay any attention to it. We simply try to focus on business that we think we understand and where we like the price and management. If we see anything that relates to what’s going to happen in congress, we don’t even read it. We just don’t think it’s helpful to have a view on these matters.
Don’t rent stocks
Buy a business, don’t rent stocks.
I’d rather have a $10 million business making 15 percent than a $100 million business making 5 percent.
If you run across one good idea for a business in your lifetime, you’re lucky ; and fundamentally, Coca-Cola is the best large business in the world. It has got the most powerful brand in the world. It sells for an extremely moderate price. It’s universally liked – the per capita consumption goes up almost every year in almost every country. There is no other product like it.
Problems in a company are like cockroaches in the kitchen. You will never find just one.
Talking at business schools, I always say students would be better off if, when they got out of school, they got a ticket with 20 punches on it. And every time they make an investment decision, it uses up a punch. You’ll never use up all 20 punches if you save them to the great ideas.