University of Berkshire Hathaway: 30 Years of Lessons Learned from Warren Buffett & Charlie Munger at the Annual Shareholders Meeting

by Daniel Pecaut

Value is what a business is worth. Price is what you have to pay to get it.

Buffett said he pays no attention to economic outlooks. His decisions are based simply on intrinsic business values.

we simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.

“Something that costs a penny, sells for a dollar and is habit forming.”

While inflation is still undesirable, well-run businesses that employ relatively little capital, that throw off lots of cash and that have pricing flexibility will cope well with inflation.

rather than worry about economic projections, these brilliant investors focus on finding good businesses at bargain prices within our resilient economy.

“It is far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” – Warren Buffett

If you are going to be a lifelong buyer of food, you welcome falling prices and deplore price increases. So should it be with investments.

Buffett also noted that book value is seldom meaningful in analyzing the value of a business. Book value simply records what was put into the business. The key to calculating value is determining what will come out of the business.

Buffett gave two criteria for evaluating the performance of management: 1) How well do they run the business? and 2) How well do they treat the owners?