If happy little bluebirds fly beyond the rainbow
Why, oh why can't I
There are too many advantages to the stock god, but what does it mean to me? If those virtues are not related to the concept of self, it means nothing to me. I desperately want to have a relationship with me.
The first point is about love. Love is the creativity that comes from life, especially for things that occupy an important place in one's life, so it is mainly aimed at loved ones and work. To the person you love, develop a mature lover ability to give (care, sense of responsibility, respect, understanding); to work, eager and excited, looking forward to the arrival of work every day, singing and dancing to go to work.
The second point is about patience. No matter compound interest, the science of hitting, circle of competence or focus, all about patience. Be patient enough to go through the long tunnel of time to stick to the thing that has been figured out and ignore the frivolous sarcasm.
The third point is about reading and thinking. No one is born great, the conclusion of a myth is also created by a brain that never stops running at a high speed, and is supported by reading 5 hours a day without interruption. Where is my support? Fragile feathers cannot support crossing the sea, when will the wings be full?
One body and one mind
And the catch is that it's the only car you're going to get in your lifetime. Now what are you going to do, knowing that that's the only car you're ever going to have and you love that car? You're going to take care of it like you cannot believe. Now what I'd like to suggest is that you're not going to get only one car in your lifetime, but you're gonna get one body and one mind, and that's all you 're going to get. And that body and mind feels terrific now, but it has to last you a lifetime.
Dream big
I was born in 1930 here in Omaha, Nebraska, during the stock market crash. I'm going to be a millionaire by the time I'm... 30.
Read
The first books I read on investment were actually in my dad's office. Pretty soon, I readall the books in the office and read some of them more than once. And I still probably spend five or six hours a day reading. Look at what's trending today. Our quick round-up...
Two rules of investing
There are two rules of investing according to Warren, and he learned this from Ben Graham. Rule number one, never lose money. Rule number two, never forget rule number one. Ben Graham basically coined the term "value investing." He believed in careful scrutiny of a company's financial statements, and that if you bought value, it would eventually prove out.
Amazing growth
When I came back to Omaha in early 1956, I was a one-man band there for six years. For the last four or five years, the stock market has been booming along and presumably forecasting better business, which has really not materialized, so maybe the stock market is really correcting a previous incorrect forecast this time rather than making a new correct one. He made a lot of money buying thinly traded securities that were incredibly cheap statistically. Warren was, at that time, dealing with small companies, and his investments often were to buy a company that you could figure was a discarded cigar butt, but it had one more smoke in it, and he wanted to buy at the right time to be able to benefit from the one smoke. The first partnership started with $105,100. I put up the 100, and the other people put up the 105,000. And then at the start of 1962,I moved to Kiewit Plaza. And by the time I moved to Kiewit Plaza, we had $7 million invested, and a fair amount was profits.she left Omaha in 1977,
The Science of Hitting
Ted Williams wrote a book called "The Science of Hitting," and in it he had a picture of himself at bat and the strike zone broken into, I think, 77 squares. And he said, if he waited for the pitch that was really in his sweet spot, he would bat .400 and if he had to swing at something on the lower corner, he would probably bat .235. And in investing, I'm in a no-called strike business, which is the best business you can be in. I can look at a thousand different companies, and I don't have to be right on every one of them or even 50 of 'em...so I can pick the ball I want to hit. And the trick in investing is just to sit there and watch pitch after pitch to go by and wait for the one right in your sweet spot. And the people that are yelling, "Swing, you bum"? Ignore 'em. There'sa temptation for people to act far too frequently in stocks, simply because they're so liquid.
Circle of competence
Over the years you develop a lot of filters, and I do know what I call my circle of competence, so I stay within that circle, and I don't worry about things that are outside that circle. Defining what your game is, where you're going to have an edge is enormously important. BrutalOne of the reasons Warren is successful is he's brutal in appraising his own past. He wants to identify mis-thinkings and avoid them in the future, If you're emotional about investment, you're not going to do well. You may have all these feelings about the stock. The stock has no feelings about you.
Ben Graham -> Charlie Munger
He made so much money for so long doing what he'd been taught by Ben Graham, which he'd buy these very cheap stocks. If they were cheap enough, he didn't care it was a lousy company and a lousy management. He knew he was going to make money anyway, just because of the cheapness. Charlie Munger has had a big impact on me in moving me toward looking for wonderful companies at fair prices rather than fair companies at wonderful prices. That was enormously important, because it enabled Berkshire to scale up in a way that would have been impossible to do otherwise. Here is how Warren says about Charlie: He's ungodly smart. He's got a much broader intellect than I do, and he's magnificent at being able to condense important ideas into just a very few words. Charlie: If you're not interested in the economic scene right now,you're mentally dead. Charlie has no tact. He's always honest in what he tells me, so I... I listen to him.
Moat
What are the key indicators you'd look for within companies before making an investment? If you've got an economic castle, people are gonna come and wanna take that castle away from you. You better have a strong moat. You better have a knight in the castle that knows what he's doing. You're not buying an asset, you're buying a name, you're buying a brand, you're buying a real franchise here, and Charlie was more responsible for that than anybody.
Honesty
Warren's not interested in making money by cheating people. I understood what the game was about, but I didn't want to play in it. I have constructed a business that fits me. It's kind of crazy to spend your life painting if you' re painting a subject you don't want to look at. I've gotten to paint my own painting in business on an unlimited canvas in a way. It's a different sort of place. I work with a great group of people that make my life is very easy and that take good care of me.
Focus
Bill's dad asked each of us to write down on a piece of paper one word that would best describe what had helped us the most. Bill and I, without any collaboration at all, each wrote the word "focus." Well, focus has always been a strong part of my personality. If I get interested in something, I get really interested. If I get interested in a new subject, I want to read about it, I want to talk about it, and I want to meet people that are involved in it. I don't have a mind that relates to the physical universe well. But the business universe I... Ithink I understand reasonably well.
Think
I like to sit and think, and I spend a lot of time doing that. And sometimes it's pretty unproductive but...But I find it enjoyable to think about...Particularly about...About business or investment problems. They' re easy. Sometimes there aren't any good answers with human problems. There's... there's almost always a good answer with money.
Loner
I think sometimes geniuses are, by default, lonely and isolated. He's a loner in a sense. And it's difficult to connect on an emotional level, because I think that that's not his basic mode of operation. PatientThe biggest thing in making money is time . You don't have to be particularly smart, you just have to be patient.
Float
Insurance is, in itself, a profitable business, but it has the additional advantage of creating something that's called "float." Float is the money that hangs around Berkshire while a claim is waiting to be paid. And Warren turned out to have an extraordinary ability to use the money thrown off by the float to buy companies that fed the growth of Berkshire.
Reputation
It shows how having a good reputation is really helpful in life. A nation has a right to expect its rules and laws to be obeyed, but I also have asked every Salomon employee to be his or her own compliance officer. After they first obey all rules, I then want employees to ask themselves whether they are willing to have any contemplated act appear the next day on the front page of their local paper to be read by their spouses, children, and friends. If they follow this test, they need not fear my other message to them: Lose money for the firm, and I will be understanding. Lose a shred of reputation for the firm, and I will be ruthless.
Compound interest
It's been 50 years since I formally took control of Berkshire Hathaway, and, step by step, we've created something that is kind of what I dreamt we might create over time, but it took a lot of time to do it.Never seemed like we were making that much progress on any one day, but compound interest works. They don't buy it with the idea they're gonna sell it next week. I think most of them buying it with the intent of holding it for their lifetime. At Berkshire, everybody gets the same information from the comprehensive annual report.
Philanthropist
In my entire lifetime, everything that I've spent will be quite a bit less than one percent of everything I've made. The other 99% plus will go to others, because it has no utility to me. So, it's silly for me to not transfer that utility to people who can use it. It's doing me no good. Whoever you are in this life, you don't want to think you wasted a lot of your energy, love, and time on something useless.
Job
The world is a great movie to watch, but you don't want to sleepwalk through life. The important thing to do is to look for the job you would take if you didn't need a job and life is wonderful then. I mean , you'll jump out of bed in the morning because you're really looking forward to the day. I have... for over 60 years, I've been able to tap dance to work just 'cause I'm doing what I love doing and...And I just feel very, very lucky.
Love
It's a very strange thing, love. You can't get rid of it. If you try to give it out, you get more back. If you try to hang onto it, you lose it.
There were two turning points in my life. Once when I came out of the womb, and once when I met Susie, basically. Listen, Warren is smarter than you even know. His brain is going all the time. It was softening him. Susie was really kind, considerate, and she was the balancing force. I just got very, very, very lucky. But I was a lopsided person, and it took a while, but she just stood there with a little watering can and just nourished me along and... and changed me.
Somebody once said that the chains of habit are too light to be felt until they're too heavy to be broken.
Death
Do you fear death? No, I don't. I've had a terrific life. I feel... you know, it's gonna happen, and I have no idea what happens after it. I'm an agnostic, so I ...You know, it may be terribly interesting. It may not be interesting at all. We'll find out. But physically, I'm pretty well depreciated. I'm getting down to salvage value. But it really doesn't t make any difference at all. It doesn't interfere with my work. It doesn't interfere with my happiness. It doesn't interfere with my thinking. I don't feel any diminution in my enjoyment of life or enthusiasm for life at all. In fact, in a sense, the game that I'm in gets more interesting all the time. It's a competitive game. It's a big game, and I enjoyed the game a lot.
Ps: Long forever on the throne, but that scaffold sways the future.
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