Patience Warren Buffett Quotes

Unless you are a liquidator, that kind of approach to buying businesses is foolish. First, the original “bargain” price probably will not turn out to be such a steal after all. In a difficult business, no sooner is one problem solved than another surfaces—never is there just one cockroach in the kitchen. Second, any initial advantage you secure will be quickly eroded by the low return that the business earns. For example, if you buy a business for $8 million that can be sold or liquidated for $10 million and promptly take either course, you can realize a high return. But the investment will disappoint if the business is sold for $10 million in ten years and in the interim has annually earned and distributed only a few percent on cost. Time is the friend of the wonderful business, the enemy of the mediocre.107 Cleveland Worsted Mills is a perfect example of a liquidation working out well. The company could have meandered along, trying to earn a mediocre return in a competitive business, but the company chose to close up shop instead. Shareholders were lucky to have Poss at the helm (workers, not so much). He was a significant shareholder and didn’t have the patience to deal with striking employees. He shut down, liquidated, and provided shareholders with a good return.

The key parts you’ve hopefully learned are the following: 1. There are four rules to investing. All four must be met in order to purchase an asset. 2. Financial markets move on emotion in the short term but follow value in the long term. As a result, always possess patience, knowledge, and think for yourself. 3. Every month you need to purchase assets in order to increase cash flow. Use that compounding cash flow to always reinvest in the most undervalued assets. In the end, it’s all about share accumulation. 4. When you don’t understand terms or concepts, do the research. That’s the only way you’ll ever know.

A few major opportunities, clearly recognizable as such, will usually come to one who continuously searches and waits, with a curious mind loving diagnosis involving multiple variables. And then all that is required is a willingness to bet heavily when the odds are extremely favorable, using resources available as a result of prudence and patience in the past.” Charles T. Munger Frequently overshadowed by Warren Buffett, his partner in the $300 billion Berkshire Hathaway holding company, Charlie Munger is a quiet, reclusive figure. Rarely making public appearances, the unostentatious billionaire spends most of his time as Buffett does: reading, thinking, and managing Berkshire Hathaway from his home in Southern California. Buffett and Munger have, over the course of their careers, amassed a multi-billion dollar empire with a brilliant-in-its-simplicity investment strategy: value investing.