The mind craves patterns, Johnson believes; patterns suggest order, which allows us to plan and make sense of our resources. What we have come to understand about Buffett is that he is continually seeking patterns—patterns that can be found when analyzing a business. He also knows that these business patterns will, at some point, reveal the future pattern of the stock price. Of course, a stock price pattern will not obligingly follow every change in the business pattern, but if your time horizon is long enough, it is remarkable how the price patterns eventually match up with the business
...more
