The Warren Buffet Way
High-Level Thoughts
In both life and business one does not need to be correct very many times to become successful. Ignore the noise, stay inside your circle of competence.
Summary Notes
Core Principles:
- Stop worrying about the economy
- Don’t buy a stock, buy a business
- Switch off the share market
- Maintain a business portfolio.
Develop the ability to say “no”. Don’t grab a deal even if it is not right. Wait for the right time.
Severe change and exceptional returns usually don't mix.
It’s wiser to buy a small group of the best businesses at decent prices. Don’t opt for a highly diversified portfolio.
Buffet never invests in businesses outside his "Circle of Competence"
One does not have to be correct very many times. 12 investment decisions over 40 years have made all the difference.
Normally more than 75% of Berkshire's common stock are represented by 5 securities.
In the companies Berkshire purchases, Buffett only controls capital allocation and top manager compensation. Managers are free to operate as they see fit.