Investors making purchases in an overheated market need to recognize that it may often take an extended period for the value of even an outstanding company to catch up with the price they paid.
It's just that I landed up in a terrific capitalist system. One that pays people who allocate capital extraordinarily well. Intrinsically, I'm not worth as much as somebody who invents something that could improves people's life, or health or whatever.
Wild swings in share prices have more to do with the "lemming- like" behaviour of institutional investors than with the aggregate returns of the company they own.
I don't want to hold out false hopes that the - by some magic moment, that things will turn around in a couple months because they wouldn't, Charlie. I mean, and it's a big mistake to try and mislead people.
The range of derivatives contracts is limited only by the imagination of man (or sometimes, so it seems, madmen). Say you want to write a contract speculating on the number of twins to be born in Nebraska in 2020. No problem-at a price, you will easily find an obliging counterparty.
The ideal business is one that earns very high returns on capital and that keeps using lots of capital at those high returns. That becomes a compounding machine.
I would say the most satisfying thing actually is watching my three children each pick up on their own interests and work many more hours per week than most people that have jobs at trying to intelligently give away that money in fields that they particularly care about.
I happen to have a talent for allocating capital. But my ability to use that talent is completely dependent on the society I was born into. If I'd been born into a tribe of hunters, this talent of mine would be pretty worthless. I can't run very fast. I'm not particularly strong. I'd probably end up as some wild animal's dinner.
I always say that in investing you want to buy stock in a company that has a business that's so good that an idiot can run it, because sooner or later one will. We have a country like that.