Thursday, October 2
LLP and I are going to the Lake District today to spend a long weekend walking the fells and dales. See you next Monday.
Warren Buffett wrote in his 1996 Letter to Shareholders:
"Most investors, both institutional and individual, will find that the best way
to own common stocks is through an index fund that charges minimal fees.
Those following this path are sure to beat the net results (after fees
and expenses) delivered by the great majority of investment
Should you choose, however, to construct your own portfolio, there
are a few thoughts worth remembering. Intelligent investing is not
complex, though that is far from saying that it is easy. What an
investor needs is the ability to correctly evaluate selected businesses.
Note that word 'selected': You don't have to be an expert on every
company, or even many. You only have to be able to evaluate companies
within your circle of competence. The size of that circle is not very
important; knowing its boundaries, however, is vital.
To invest successfully, you need not understand beta, efficient
markets, modern portfolio theory, option pricing or emerging markets.
You may, in fact, be better off knowing nothing of these. That, of
course, is not the prevailing view at most business schools, whose
finance curriculum tends to be dominated by such subjects. In our view,
though, investment students need only two well-taught courses - How to
Value a Business, and How to Think About Market Prices.
Your goal as an investor should simply be to purchase, at a rational
price, a part interest in an easily-understandable business whose
earnings are virtually certain to be materially higher five, ten and
twenty years from now. Over time, you will find only a few companies
that meet these standards - so when you see one that qualifies, you
should buy a meaningful amount of stock. You must also resist the
temptation to stray from your guidelines: If you aren't willing to own a
stock for ten years, don't even think about owning it for ten minutes.
Put together a portfolio of companies whose aggregate earnings march
upward over the years, and so also will the portfolio's market value."
Wynton Marsalis spoke eloquently at a recent National Press Club luncheon about cultural bankruptcy and the importance of arts education.
(RealMedia 55 minute program)
"As Americans, it's more important than ever that we have a sense of our identity. When you look at a Stuart Davis painting, or listen
to Charlie Parker play the saxophone, or watch an Arthur Miller play, you are living an important part of the American experience ... We
need a generation of diplomats who understand and take pride in our culture, and can share it with others."
"The power of great music is timeless. That's why it remains an indispensable tool for teaching our youngsters ... Music is one of the few
things that transcends the boundaries of race, class, religion, and geography that too often divide us."
"Can you imagine a society where no one had an appreciation of music, or theater, or art? Where no one could perform, everybody's
lip-synching? Nobody could teach? Well believe me, that's the direction we're heading."
"Playing in an ensemble teaches you more about good citizenship than I don't know what."
The Australian Dollar futures moved to a new high yesterday (its highest level since 1999). Which currency will next hit a multiyear high:
The Canadian Dollar? The Euro? The Swiss Franc? It's not a question of if, but when.
Previous Entry >>> Random Thoughts -- October 1