WARREN BUFFETT: Yeah. Well, I won’t comment on the three companies
that you’ve named.
But in general terms,
unless you find the prices of a great company really offensive,
if you feel you’ve identified it —
And
by definition, a great company is one that’s going to remain great for 30 years.
If it’s going to be a great company for three years,
you know, it ain’t a great company. I mean, it —
(Laughter)
So,
you really want to go along with the
idea of something that, if you were going to take a trip for 20 years,
you wouldn’t feel bad leaving
the money in with no orders with your broker and no power of attorney or anything,
and you just go on the trip. And you know you come back, and it’s going to be a
terribly strong company.
I think it’s better just to own them. I mean, you know,
we could
we could attempt to buy and sell some of the things that
we own that we think are fine businesses. But
they’re too hard to find.
I mean, we found See’s Candy in 1972, or we find,
here and there, we get the opportunity to do something. But
they’re too hard to find.
So, to sit there and hope that you buy them in the
in the throes of some panic,
you know, that you sort of take the attitude of a
mortician, you know, waiting for a flu epidemic or something, I mean
— (laughter) — it —
I’m not sure that will be a great technique.
I mean, it may be great if you inherit. You know,
Paul Getty inherited the money at the bottom, in ’32. I mean,
he didn’t inherit it exactly. He talked his mother out of it.
But — (laughter) — it’s true, actually.
CHARLIE MUNGER: Close enough.
WARREN BUFFETT: Yeah, close enough, right?
But he
benefitted enormously by having access to a lot of cash
in 19 — in the early ’30s — that he didn’t have access to in
the late ’20s. And so, you get some accidents like that.
But that’s a lot to count on. And
you know, if you start with the Dow at X,
and you think it’s too high,
you know, when it goes to 90 percent of X, do you buy?
Well, if it does, and it goes to 50 percent of X, it gets —
you know, you never get the benefits of those extremes anyway,
unless you just come into some accidental
sum of money at some time.
So, I think the main thing to do is find
wonderful businesses.
Is Phil Carret here?
We’ve got the world —there’s the hero of investing.
Phil, would you stand up?
Phil is 99. He wrote a book on investing in 1924
(Applause)
Phil has done awfully well by finding businesses he likes,
and sticking with them, and
not worrying too much about what they do day to day.
There’s going to be — I think there’s going to be an article in the
Wall Street Journal about Phil on May 28th, and I
I advise you all to read it.
And you’ll probably learn a lot more than by coming to this meeting, but —
It’s that approach of buying businesses — I mean,
let’s just say there was no stock market.
And the owner of the best business in whatever your hometown is
came to you and said, “Look it, you know,
my brother just died, and he owned 20 percent of the business.
And I want somebody to go in with me to buy that 20 percent.
“And the price looks a little high, maybe, but
this is what I think I can get for it. You know, do you want to buy in?”
You know, I think, if you like the business,
and you like the person that’s coming to you, and the price sounds reasonable,
and you really know the business, I think, probably, the thing to do is to
take it and don’t worry about how it’s quoted.
It won’t be quoted tomorrow, or next week, or next month.
You know, I think people’s investment would be more intelligent,
you know, if stocks were quoted about once a year.
But it isn’t going to happen that way, so —
And if you happen to come in to some
added money
at some time when something dramatic has happened — I mean,
we did well back in 1964, because American Express ran into a crook.
You know, we did well in 1976, because
GEICO —
GEICO’s managers and auditors
didn’t know what their loss reserves should’ve been the previous couple of years.
So, we’ve had our share of flu epidemics. But
you don’t want to spend your life
— (laughs) — waiting around for them.