Warren Buffett: When To Sell A Business

Warren Buffett: When To Sell A Business

Warren Buffett discusses what he does when he does not want to borrow money to buy something new.

Warren Buffett: Don’t Want To Borrow Money? Sell A Business

Canyon Distressed Opportunity Fund likes the backdrop for credit

CanyonThe Canyon Distressed Opportunity Fund III held its final closing on Jan. 1 with total commitments of $1.46 billion, calling half of its capital commitments so far. Canyon has about $26 billion in assets under management now. Q4 2020 hedge fund letters, conferences and more Positive backdrop for credit funds In their fourth-quarter letter to Read More

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Q3 hedge fund letters, conference, scoops etc


Buffett Good morning. In your comments about making mistakes and errors like that he took a lot of your self-discipline when you're in a position and you feel like it's no longer good. I mean what criteria to use to and you just finally abandoned it. Yeah when I started out. This whole situation has changed over the years because when I started out.

I had way more ideas than money. I mean I would go through. Movies manual I went through it page by page and then I went through it again. Page by page and I found stocks in there that I could understand that were selling at like two times journeys even one times earnings. Well when you don't have 10000 bucks that I can get a little frustrating and if you don't like to borrow money which I'd never like to borrow money so. I was always coming up with more ideas than I had money so I had to sell whatever I liked least to buy something new that just was compelling to me. And it took a long time I was in that mode. And. Now our problem is we have more money than ideas. So. We're. Winning. If you look at our annual report which is on the Internet under our home page Berkshire Hathaway dot com you'll see something in the back called the economic principles of Berkshire. And you will see which I believe in setting out for my. My partners. They are my partners. I don't think I'm a shareholder but like them as partners are gonna be my partners for life. So I want to tell them how I think and if they don't agree with the way I think that's fine. But I don't want them to be disappointed at me. So. I lay out there and I say in terms of our wholly owned businesses.

We're not going to sell no matter how much anybody offers this form. I mean if somebody offers us three times what something is worth See's Candy the Buffalo News Rorschach's whatever it may be. I can sell it. I may be wrong and having that approach. I know I'm not wrong if I owned 100 percent of Berkshire because that's the way I want to live my life. I've got all the money I could possibly need. It just amounts to. A change in the newspaper story on my obituary and the amount of money the foundation has and break off relationships with people I like and people have join me because they think it's a permanent home to do that simply because somebody waves a big check at me would be like selling my children because of the way the big ship. So I won't do that. And I want to tell my partners I won't do it so that they're not disappointed me more and more with certain stocks. We've got that approach. Now if we were. Chronically short of funds and all kinds of opportunities coming we might have a somewhat different approach. But. Our inclination is not to sell things unless we get really discouraged perhaps with the management.

We think the economic characteristics of the business change in a big way. I mean and that happens. So but we're not going to sell simply because it looks too high in all likelihood. I mean that you can't make that 100 percent. But it's it's. That's that's that's the. Principle under which we're we're generating right now 5 billion of cash a year at least. So it's 100 million bucks every week. And you know just that. We've been talking here half an hour and I have done a damn thing. So. As. You know the real question is how do you put it out intelligently at hand. If we were selling things would be just that much more so they make their money. There may come a time when that would change. But what we want to. Add. I have partners shareholders partners. Who would say if you can get three times what See's Candies worth why don't you sell it. And that's why I want to be sure before they come in. They know how I think on that. I mean they're they're entitled to know that.

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Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver

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