October 31, 2006
The Tyranny of Compounding Costs
The irascible Jack Bogle on investor education (among other things):
“We are educating them with all the stupid things that make investing impossible. For example, that Peter Lynch thing — if you see something you like, buy the company that makes it. What could be more inane?”
I always liked the story of Lynch passing up buying shares in SuperCuts after he got a terrible haircut there… Lynch’s methods weren’t the least bit inane, but it all boils down to paying a good price for a great business — that’s the key.
Cat: | Time: 6:04 pm (utc+8)
October 31st, 2006 at 9:08 pm
“but it all boils down to paying a good price for a great business”, yes that is the key. The trick is finding the approximate price bottom of the great business! :)
October 31st, 2006 at 9:58 pm
Tom: Yeah, I should have written everybody knows what the great businesses are, it’s just a matter of figuring out what’s a good (bargain) price to pay … in short, folks need to learn how to put a value on a business.