主题： Investing

The future is never clear; you pay a very high price in the stock market for a cheery consensus. Uncertainty actually is the friend of the buyer of long-term values. There’s nothing immoral or illegal or fattening about speculation, but it is an entirely different game to buy a lump of something and hope that somebody else pays you more for that lump two years from now than it is to buy something you expect to produce income for you over time. I bought a farm 30 years ago, not far from here. I’ve never had a quote on it since. What I do is I look at what it produces every year, and it produces a very satisfactory amount relative to what I paid for it.

If you own a business, and you plow back a good portion of your earnings into building the business, you’re going to have something more valuable on average year after year. Now, sometimes the market reflects it and sometimes it’s crashing for some other reason or whatever. But the stock market builds in value, underlying value, from year to year.

The whole mentality of Wall Street is that if you buy something—even if you’re going to buy more of it later on, or if the company is going to buy its own stock in—the people seem to think that they’re better off if it goes up the next day, or the next week, or the next month, and that’s why they talk about “talking your book.” If we talked our book, from our standpoint, we would say pessimistic things about all four of the biggest holdings we have, because all four of them are repurchasing their shares, and, obviously, the cheaper they repurchase their shares, the better off we are.

I do not think if Ben Bernanke comes up and whispers to me that he’s going to do X, Y, or Z tomorrow, I’m not going to change my view about what businesses I want to own. I want—I’m going to own those businesses for years just like I would own a farm or an apartment house and there’ll be all kinds of events and there’ll be all kinds of uncertainties and in the end, what will really count is how that business or farm or apartment house does over the years.

If your goal is not to manage money in such a way as to get a significantly better return than the world, then I believe in extreme diversification. So I believe 98 or 99 percent of people … who invest should extensively diversify and not trade, so that leads them to an index fund type of decision with very low costs. All they’re going to do is own a part of America and they have made a decision that owning part of America is worthwhile.

I have this complicated procedure I go through every morning, which is to look in the mirror and decide what I’m going to do. And I feel at that point, everybody’s had their say.

There is no hunch or intuitiveness or anything of the sort. I mean, I try to sit down and figure out what the future economic prospects of a business are.

How do you beat Bobby Fischer? You play him at any game but chess. I try to stay in games where I have an edge.

Most people can’t do a couple percentage points better than the market. I’m telling people I still expect to do a little better than average, but nothing like I’ve done in the past. I wouldn’t be running it if I thought I would be doing just average. That may be what happens, and I know that I can’t do more than a couple points better than average. But it’s better than most people do themselves. It may be better than I do.

If I was running $1 million today, or $10 million for that matter, I’d be fully invested. Anyone who says that size does not hurt investment performance is selling. The highest rates of return I’ve ever achieved were in the 1950s. I killed the Dow. You ought to see the numbers. But I was investing peanuts then. It’s a huge structural advantage not to have a lot of money. I think I could make you 50 percent a year on $1 million. No, I know I could. I guarantee that.