I make no effort to predict the course of general business or the stock market. Period. However, currently there are practices snowballing in the security markets and business world which, while devoid of short term predictive value, bother me as to possible long term consequences.
One of the ironies of the stock market is the emphasis on activity. Brokers, using terms such as 'marketability' and 'liquidity,' sing the praises of companies with high share turnover... but investors should understand that what is good for the croupier is not good for the customer. A hyperactive stock market is the pick pocket of enterprise.
Market prices for stocks fluctuate at great amplitudes around intrinsic value but, over the long term, intrinsic value is virtually always reflected at some point in market price.
Risk comes from not knowing what you are doing so wide diversification is only required when investors are ignorant. You only have to do a very few things in your life so long as you don't do too many things wrong.
The most important quality for an investor is temperament, not intellect. You need a temperament that neither derives great pleasure from being with the crowd or against the crowd.
But 300 million Americans, their lending institutions, their government, their media, all believed that house prices were going to go up consistently. And that got billed into a $20 trillion residential home market. Lending was done based on it, and everybody did a lot of foolish things.
Writing checks to the IRS that include strings of zeros does not bother me ... Overall, we feel extraordinarily lucky to have been dealt a hand in life that enables us to write large checks to the government rather than one requiring the government to regularly write checks to us-say, because we are disabled or unemployed.
It's very important that the determination of the US Congress to do what is is needed be made evident this week and by the actions of most of the members. I mean, you're not going to get total assent.
The best business returns are usually achieved by companies that are doing something quite similar today to what they were doing five or ten years ago.
After 25 years of buying and supervising a great variety of businesses, Charlie [Munger] and I have not learned how to solve difficult business problems. What we have learned is to avoid them. To the extent we have been successful, it is because we have concentrated on identifying one-foot hurdles that we could step over rather than because we acquired any ability to clear seven-footers.