Value Investing

25 Pages of the Best Value Investing Quotes (PAGE WILL LOAD SLOWLY)

http://www.tilsonfunds.com/brkmtg04notes.doc

 

“Creative accounting is an absolute curse to a civilization. One could argue that double-entry bookkeeping was one of history’s great advances. Using accounting for fraud and folly is a disgrace. In a democracy, it often takes a scandal to trigger reform. Enron was the most obvious example of a business culture gone wrong in a long, long time.”  http://www.tilsonfunds.com/motley_berkshire_brkmtg02notes.php3

 

I also want to raise the possibility that there are, in the very long term, “virtue effects” in economics— for instance that widespread corrupt accounting will eventually create bad long term consequences as a sort of obverse effect from the virtue-based boost double-entry book-keeping gave to the heyday of Venice. I suggest that when the financial scene starts reminding you of Sodomand  Gomorrah, you should fear practical consequences even if you like to participate in what is going on. http://www.tilsonfunds.com/Mungerwritings2001.pdf#search=%22%20%22charlie%20Munger%22%20Outstanding%20investor%20digest%22

 

Acquisitions:

 

“Two thirds of acquisitions don’t work. Ours work because we don’t try to do acquisitions — we wait for no-brainers.” http://www.tilsonfunds.com/motley_berkshire_brkmtg02notes.php3

 

At most corporations if you make an acquisition and it turns out to be a disaster, all the paperwork and presentations that caused the dumb acquisition to be made are quickly forgotten. You’ve got denial, you’ve got everything in the world. You’ve got Pavlovian association tendency. Nobody even wants to even be associated with the damned thing or even mention it. At Johnson & Johnson, they make everybody revisit their old acquisitions and wade through the presentations. That is a very smart thing to do. And by the way, I do the same thing routinely.   http://www.loschmanagement.com/Berkshire%20Hathaway/Charlie%20munger/The%20Psychology%20of%20Human%20Misjudgement.htm

 

“We tend to buy things — a lot of things — where we don’t know exactly what will happen, but the outcome will be decent.” http://www.fool.com/news/foth/2002/foth020515.htm

“We’ve bought business after business because we admire the founders and what they’ve done with their lives. In almost all cases, they’ve stayed on and our expectations have not been disappointed.”  http://www.fool.com/news/commentary/2003/commentary030509wt.htm

Advertising:

“if you were Proctor & Gamble, you could afford to use this new method of advertising. You could afford the very expensive cost of network television because you were selling so many cans and bottles. Some little guy couldn’t. And there was no way of buying it in part. Therefore, he couldn’t use it. In effect, if you didn’t have a big volume, you couldn’t use network TV advertising which was the most effective technique. So when TV came in, the branded companies that were already big got a huge tail wind. Indeed, they prospered and prospered and prospered until some of them got fat and foolish, which happens with prosperity ? at least to some people….” http://www.thinkfn.com/en/content/view/52/?id=124

“I’d say 3/4 of advertising works on pure Pavlov. Think how association, pure association, works. Take Coca-Cola company (we’re the biggest share-holder). They want to be associated with every wonderful image: heroics in the Olympics, wonderful music, you name it. They don’t want to be associated with presidents’ funerals and so-forth.” http://www.loschmanagement.com/Berkshire%20Hathaway/Charlie%20munger/The%20Psychology%20of%20Human%20Misjudgement.htm

Advice

“Just avoid things like racing trains to the crossing, doing cocaine, etc.  Develop good mental habits.”   http://www.tilsonfunds.com/brkmtg04notes.doc

“A lot of success in life and business comes from knowing what you want to avoid: early death, a bad marriage, etc.”  http://www.fool.com/BoringPort/2000/boringport00051501.htm

If you have only a little capital and are young today, there are fewer opportunities than when I was young. Back then, we had just come out of a depression. Capitalism was a bad word. There had been abuses in the 1920s. A joke going around then was the guy who said, ‘I bought stock for my old age and it worked — in six months, I feel like an old man!’ “It’s tougher for you, but that doesn’t mean you won’t do well — it just may take more time. But what the heck, you may live longer.” http://www.fool.com/BoringPort/2000/boringport00051501.htm

Spend each day trying to be a little wiser than you were when you woke up. Discharge your duties faithfully and well. Step by step you get ahead, but not necessarily in fast spurts. But you build discipline by preparing for fast spurts… Slug it out one inch at a time, day by day, at the end of the day — if you live long enough — most people get what they deserve.” http://www.fool.com/news/commentary/2003/commentary030509wt.htm

Advisers:

you can hire your advisor and then just apply a windage factor, like I used to do when I was a rifle shooter. I’d just adjust for so many miles an hour wind. Or you can learn the basic elements of your advisor’s trade. You don’t have to learn very much, by the way, because if you learn just a little then you can make him explain why he’s right. http://www.loschmanagement.com/Berkshire%20Hathaway/Charlie%20munger/The%20Psychology%20of%20Human%20Misjudgement.htm
 

Age

”Warren has gotten to be one hell of a lot better investor over the period I’ve known him, so have I.  So the game is to keep learning.  You gotta like the learning process…. there’s an apocryphal story about Mozart.  A 14-year-old came to him and said, “I want to learn to be a great composer.”  And Mozart said, “You’re too young.”  The young man replied, “But I’m 14 years old and you were only eight or nine when you started composing.”  To which Mozart replied, “Yes, but I wasn’t running around asking other people how to do it.”  http://www.tilsonfunds.com/wscmtg04notes.doc

“We’re not following the examples of any 40-year-old investors.”  http://www.designs.valueinvestorinsight.com/bonus/bonuscontent/docs/Tilson_2006_BRK_Meeting_Notes.pdf#search=%22Charlie%20munger%20and%20foundation%20and%20croupier%22

“We get these questions a lot from the enterprising young. It’s a very intelligent question: You look at some old guy who’s rich and you ask, ‘How can I become like you, except faster?’” http://www.fool.com/news/commentary/2003/commentary030509wt.htm

Allocation of capital

 

“We’re partial to putting out large amounts of money where we won’t have to make another decision.”  http://www.tilsonfunds.com/motley_berkshire_brkmtg01notes.php3

 

I don’t think our successors will be as good as Warrenat capital allocation.” http://www.tilsonfunds.com/motley_berkshire_brkmtg01notes.php3

American Express:

“It would be easier to screw up American Express than Coke or Gillette, but it’s an immensely strong business. 

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