Wrigley is a great business, but that doesn’t solve the problem. Buying great businesses at advantageous prices is very tough.
Whoever makes you smarter a little earlier in life makes you better.
The more hard lessons you can learn vicariously rather than through your own hard experience, the better.
To the man with only a hammer, every problem looks like a nail.
The only way to win is to work, work, work, work, and hope to have a few insights.
Spend each day trying to be a little wiser than you were when you woke up. Day by day, and at the end of the day-if you live long enough-like most people, you will get out of life what you deserve.
Choose clients as you would friends.
It’s not a competency if you don’t know the edge of it.
We’ve got great flexibility and a certain discipline in terms of not doing some foolish thing just to be active – discipline in avoiding just doing any damn thing just because you can’t stand inactivity.
Mankind invented a system to cope with the fact that we are so intrinsically lousy at manipulating numbers. It’s called the graph.
I don’t spend much time regretting the past, once I’ve taken my lesson from it. I don’t dwell on it.
Part of that, I think, is being able to tune out folly, as distinguished from recognizing wisdom. You’ve got whole categories of things you just bat away so your brain isn’t cluttered with them. That way, you’re better able to pick up a few sensible things to do.
The idea of excessive diversification is madness. Wide diversification, which necessarily includes investment in mediocre businesses, only guarantees ordinary results.
For some odd reason, I had an early and extreme multidisciplinary cast of mind. I couldn’t stand reaching for a small idea in my own discipline when there was a big idea right over the fence in somebody else’s discipline. So I just grabbed in all directions for the big ideas that would really work.
You need a different checklist and different mental models for different companies. I can never make it easy by saying, ‘Here are three things.’ You have to derive it yourself to ingrain it in your head for the rest of your life.
I think I’ve been in the top 5% of my age cohort all my life in understanding the power of incentives, and all my life I’ve underestimated it.
Berkshire was built on the eternal verities: basic mathematics, basic horse sense, basic fear, and basic diagnosis of human nature to make predictions regarding human behavior. We stuck to the basics with a certain amount of discipline and it has worked out quite well.
Warren is one of the best learning machines on this earth. The turtles who outrun the hares are learning machines. If you stop learning in this world, the world rushes right by you.
Derivative trading with mark-to-market accounting degenerates into mark-to-model. Two firms make a big derivative trade and the accountants on both sides show a large profit from the same trade.
Accounting is a big subject and there are huge forces in play. The entire momentum of existing thinking and existing custom is in a direction that allows terrible follies to happen, and the terrible follies have terrible consequences.
I would argue that a majority of the horrors we face would not have happened if the accounting profession developed and enforced better accounting.