An argument is made that there are just too many question marks about the near future; wouldn't it be better to wait until things clear up a bit? You know the prose: "Maintain buying reserves until current uncertainties are resolved," etc. Before reaching for that crutch, face up to two unpleasant facts: The future is never clear and you pay a very high price for a cheery consensus. Uncertainty actually is the friend of the buyer of long-term values.
I don't have my diploma from the University of Nebraska hanging on my office wall, and I don't have my diploma from Columbia up there either-but I do have my Dale Carnegie graduation certificate proudly displayed.
We've used up a lot of bullets. And we talk about stimulus. But the truth is, we're running a federal deficit that's 9 percent of GDP. That is stimulative as all get out. It's more stimulative than any policy we've followed since World War II.
This country is going - be living better ten years from now than it is now. It will be living better in 20 years from now than ten years from now. The ingredients that made this country, you know, the miracle of the world - I mean we had a seven for one improvement in the average American standard of living in the 20th century.
That would be nice if [people] stuck [treasury bills] all under a mattress, but they got to buy something with them. Sometimes they buy a treasury note, sometimes they set up sovereign wealth funds. They can do all kinds of things. They can buy our companies here. As long as we consume more than we produce, and we trade away little pieces of the country daily, they're going to own something. Now, they can't run from American assets. I mean every day the rest of the world is going to have about two billion more of American assets than we have, as long as they sell us these goods.
There are three important principles to Graham's approach. [The first is to look at stocks as fractional shares of a business, which] gives you an entirely different view than most people who are in the market. [The second principle is the margin-of-safety concept, which] gives you the competitive advantage. [The third is having a true investor's attitude toward the stock market, which] if you have that attitude, you start out ahead of 99 percent of all the people who are operating in the stock market - it's an enormous advantage.
I've made money over the years by buying into good companies, run by good people, at attractive prices. And I don't try and make it out of buying into the market at one point and selling at another point.
You should be unconcerned about short-term price action when you own the securities directly, just as you were unconcerned when you owned them indirectly through BPL. I think about them as businesses, not "stocks", and if the business does all right over the long term, so will the stock.
If you expect to continue to purchase stocks throughout your life, you should welcome price declines as a way to add stocks more cheaply to your portfolio.
I mean you know at midnight everything is going to turn to pumpkins and mice; right? But if the evening goes along, I mean, you know, the guys look better all the time, the music sounds better, it's more and more fun, you think why the hell should I leave at quarter of 12. I'll leave at two minutes to 12. But the trouble is, there are no clocks on the wall. And everybody thinks they're going to leave at two minutes to 12.
If I knew where I was going to want to live the next five or 10 years I would buy a home and I'd finance it with a 30-year mortgage... It's a terrific deal.
The latter qualification brings to mind a fellow who applied for a job and stated he had twenty years of experience-which was corrected by a former employer to read "one year's experience-twenty times.
You have hedge funds and people like that buying these assets to yield 15 or 20 percent, I mean, that's the buyer for these people that are trying to unload them.
We intend to continue our practice of working only with people whom we like and admire. This policy not only maximizes our chances for good results, it also ensures us an extraordinarily good time.