Warren Buffett has just been interviewed for the PBS’s “Nightly Business Report” in the US. The interview reveals some of the investment philosophies that Mr Buffett uses. These include
“My approach to investing I learned in 1949 or ‘50 from a book by Ben Graham and it’s never changed … I see different ways to apply it from time to time but that is the framework.”
“I look at how much I am getting for my money, how good the management is, how the competitive position of that business compares to others, how durable it is and just fundamental questions. Any stock I buy, I will be happy owning it if they close the stock market for five years tomorrow.”
“You’re going to buy groceries the rest of your life; you want grocery prices to go up or down? You want them to go down. And if they go down you don’t think gee I got all those groceries sitting in my cabinet at home and I’ve lost money on those. You think I am buying my groceries cheaper, I am going to keep buying groceries. Now if you’re a seller, obviously prices are higher. But most people listening to this program, certainly I, myself, and Berkshire Hathaway, we’re going to be buying businesses over time. We like the idea of businesses getting cheaper.”
No get rich schemes, no tax avoidance (sorry minimisation); just solid wealth creating in fundamentally strong businesses. Free advice from the world’s richest man, the man that said three years ago that he is going to give it all away.