1. I hope you don’t think that the stocks you own are just a piece of paper whose price changes every day, and will become a candidate for selling once some economic or political event makes you nervous. . Instead, I want you to imagine yourself as one of the owners of a business in which you are willing to invest indefinitely, much like a farm or an apartment that you own in partnership with other members of your family.
2. If we have firm long-term investment expectations, then short-term price fluctuations are meaningless to us unless they give us the opportunity to increase our shares at a cheaper price.
3. The key to investment success is to buy shares of a good company when its market price is significantly discounted relative to its intrinsic business value. Intrinsic value is a very important concept that provides the only logical means of assessing the relative attractiveness of investments and businesses. The definition of intrinsic value is simple: it is the discounted value of the cash a business can generate over the rest of its life.
4. Our investment methods are just in line with our personalities and the lifestyle we want. For this reason, we would rather get returns X by joining forces with people we like and respect very much than Achieve 110% X by changing those relationships with people who are boring or annoying.
5. I think investment students only need two properly taught classes, how to evaluate a company, and how to consider market prices.
6. Be willing to resist the temptation to deviate from your guidelines: If you don't want to own a company for ten years, don't consider owning it for ten minutes.
7. We welcome market declines because they allow us to pick up more stocks at new, panic-inducing bargains.
8. The occasional outbreak of fear and greed, two highly contagious disasters, will always appear in the investment world. The timing of these epidemics is unpredictable, as is the market insanity they cause, both in duration and in how contagious it is. Therefore we can never predict the arrival or departure of any kind of disaster, and our goal should be appropriate: we should only be fearful when others are greedy, and fear others when they are greedy.
9. Our goal is to make the profits of our shareholding partners come from the company, not from the stupid behavior of other owners.
10. Investors should consider the long-term development of the company rather than the short-term prospects of the stock market. Price will ultimately depend on future earnings. In investing, as in baseball, to keep the scoreboard rolling, you have to keep your eyes on the field, not the scoreboard.
11. Price is what you pay, value is what you get. Evaluating the value of a business is part art and part science.
12. Huge investment opportunities come from excellent companies being trapped by unusual circumstances, which will cause the stocks of these companies to be wrongly undervalued.
13. Understanding the basic components of accounting statements is a way of self-defense: when managers want to explain to you the actual situation of the company, they can do so through the provisions of accounting statements. But unfortunately, when they want to play tricks (at least in some industries) they can also do it through accounting reporting regulations. If you can't recognize the difference, you don't have to be in the asset selection industry.
14. How to determine the value of a business? - Do a lot of reading: I read the annual reports of the companies I am paying attention to, and I also read the annual reports of its competitors.
15. Every time I read a company's cost-cutting plan, I think that this is not a company that really understands what costs are. The approach that can accomplish all the results in the short term is in the field of cost-cutting. It doesn't work, a really good manager doesn't wake up in the morning and say today is the day I'm going to cut costs, just like he doesn't wake up and decide to breathe.
Hope to adopt