Post by Giuliano | Commonstock | Takeaways from Buffet Letters

Giuliano

@giuliano_mana March 2

$5.5m follower assets

Takeaways from Buffet Letters

Some short keynotes on the most wisdom-loaded letters, 1982-1986.

1982

Paying too much even for a great company can be a poor investment.
A stock's performance may be detached from fundamental business performance in the short term.

1983

"Our long-term economic goal is to maximize the avg annual rate of gain in intrinsic business value on a per share basis."
No intention of selling good businesses.
Look for managements aligned with your objectives.
Retained earnings' impact on market value.

1984

Capital allocation skills are crucial.
In bear markets, no action but share repurchase can better serve shareholders.
He buys securities based on criteria he would apply to buy the whole business.
"Investment is most intelligent when it is most businesslike"

1985

Beware when the gap between intrinsic and market value widens.
Recognition of a mistake. Shutdown of the textile business.
Learning from others' mistakes is a resourceful strategy.
Buy fear

1986

He admits not having any idea of what the market will do.
"What we do know, however, is that occasional outbreaks of those two super-contagious diseases, fear and greed, will forever occur"
The intended holding period for their best companies is forever.

Dave Ahern

@ifb_podcast March 2

Great takeaways! I felt like the 80s versions of the Letters provided the most bang for the buck, but that's just my opinion. Lots of great nuggets in all the Letters. Thanks for sharing!