7 Quotes That Sum Up Buffett’s Entire Strategy

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Stock prices are random, but fair value is not:

“It is difficult at the time of purchase to know any specific reason why they should appreciate in price. However, because of this lack of glamour or anything pending which might create immediate favorable market action, they are available at very cheap prices. A lot of value can be obtained for the price paid. This substantial excess of value creates a comfortable margin of safety in each transaction. This individual margin of safety, coupled with a diversity of commitments, creates a most attractive package of safety and appreciation potential. Over the years our timing of quotes from Buffett’s letter between 1960 and 1965 purchases has been considerably better than our timing of sales. We do not go into these generals with the idea of getting the last nickel but are usually quite content selling out at some intermediate level between our purchase price and what we regard as fair value to a private owner.”

 



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