Buffett Gets a Bullseye


March 2nd, 2010 value investor 1 comment Print Investment Article Print Investment Article Email Investment Article Email Investment Article

thumbs up 200x200 Buffett Gets a Bullseye
I have written about the benefits of boring businesses in previous posts. I thought Buffett summarized some of the arguments quite well in his latest letter to shareholders:

“Charlie and I avoid businesses whose futures we can’t evaluate, no matter how exciting their products may be. In the past, it required no brilliance for people to foresee the fabulous growth that awaited such industries as autos (in 1910), aircraft (in 1930) and television sets (in 1950). But the future then also included competitive dynamics that would decimate almost all of the companies entering those industries.Even the survivors tended to come away bleeding.

Just because Charlie and I can clearly see dramatic growth ahead for an industry does not mean we can judge what its profit margins and returns on capital will be as a host of competitors battle for supremacy. At Berkshire we will stick with businesses whose profit picture for decades to come seems reasonably predictable. Even then, we will make plenty of mistakes.”

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How to Invest Like Warren Buffett
Read more on Warren Buffett at Wikinvest
 
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One response to “Buffett Gets a Bullseye”

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