Money and Finance
Via the notes from the Ivey MBA and HBA student meeting with Warren Buffett:
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Related previous post (one of the all-time most read posts on this blog): Filters
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Money and Finance
More from Warren Buffett on having good filters...
Via the notes from the Ivey MBA and HBA student meeting with Warren Buffett:
At Berkshire we have certain filters that have been developed. If in the course of a presentation or evaluation part of a proposal[,] an idea hits a filter then there is no way I will invest. Charlie has similar filters. We don’t worry about a lot of things as we only have to be right about a certain number of things – things that are within our circle of competence. A great example is the Nebraska Furniture Mart that you visited this morning. Mrs. B took cash because she didn’t understand stocks. It is important to know what I can do. I have no idea which company will dominate in the auto industry in the next 5 years so I don’t pick. I prefer simple things in my circle of competence. Good decisions scream at you. For example in 2008 you shouldn’t have been afraid just because assets were cheap. In your entire investment lifetime you may have 6 times when this happens and it is ‘raining gold’.
Related previous post (one of the all-time most read posts on this blog): Filters
- Charlie Munger And Circle Of Competence...
From Charlie Munger: The Complete Investor:Munger has a range of approaches he uses to avoid mistakes. To make this point by analogy, Munger is fond of saying that he wants to know where he will die so he can intentionally never go there. His friend...
- Li Lu On Understanding A Business…
Via notes from his 2010 lecture at Columbia:You can’t truly understand everything about a business in 1 week. It took me 10 years and I am still learning new things about BYD. It is a continuous learning process. You could spend a lifetime studying...
- Keeping It Simple...
Quotes from the section on 'Simplification' in Seeking Wisdom - from Darwin to Munger by Peter Bevelin. "We have a passion for keeping things simple." -Charles Munger "It's amazing how many people even today use a computer to do something...
- Alice Schroeder On Warren Buffett’s Filtering Process
Thanks to Will for bringing this back up to me. This quote is from my friend Miguel Barbosa’s interview with Alice Schroeder (HERE). “Typically, and this is not well understood, his way of thinking is that there are disqualifying features to an investment....
- Staying Within The Circle
"It is more important to say 'no' to an opportunity, than to say 'yes'." -Warren Buffett It seems to me that many in the value investing community may be pushing the edges of their circles of competence. I think the run-up from the lows,...