Good quote from Berkshire Report

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325e
Posts: 99
Joined: Thu Aug 09, 2012 8:48 am

Good quote from Berkshire Report

Post by 325e »

A thought for my fellow CEOs: Of course, the immediate future is uncertain; America has faced the
unknown since 1776. It’s just that sometimes people focus on the myriad of uncertainties that always exist
while at other times they ignore them (usually because the recent past has been uneventful).

American business will do fine over time. And stocks will do well just as certainly, since their fate is tied
to business performance. Periodic setbacks will occur, yes, but investors and managers are in a game that
is heavily stacked in their favor. (The Dow Jones Industrials advanced from 66 to 11,497 in the 20th
Century, a staggering 17,320% increase that materialized despite four costly wars, a Great Depression and
many recessions. And don’t forget that shareholders received substantial dividends throughout the century
as well.)

Since the basic game is so favorable, Charlie and I believe it’s a terrible mistake to try to dance in and out
of it based upon the turn of tarot cards, the predictions of “experts,” or the ebb and flow of business
activity. The risks of being out of the game are huge compared to the risks of being in it.

My own history provides a dramatic example: I made my first stock purchase in the spring of 1942 when
the U.S. was suffering major losses throughout the Pacific war zone. Each day’s headlines told of more
setbacks. Even so, there was no talk about uncertainty; every American I knew believed we would prevail.

The country’s success since that perilous time boggles the mind: On an inflation-adjusted basis, GDP per
capita more than quadrupled between 1941 and 2012. Throughout that period, every tomorrow has been
uncertain. America’s destiny, however, has always been clear: ever-increasing abundance.

If you are a CEO who has some large, profitable project you are shelving because of short-term worries,
call Berkshire. Let us unburden you.
BYUvol
Posts: 120
Joined: Sat Mar 24, 2012 3:06 pm
Location: KY

Re: Good quote from Berkshire Report

Post by BYUvol »

325e wrote: Since the basic game is so favorable, Charlie and I believe it’s a terrible mistake to try to dance in and out
of it based upon the turn of tarot cards, the predictions of “experts,” or the ebb and flow of business
activity. The risks of being out of the game are huge compared to the risks of being in it.
I came here to post this exact quote. To me a "legend" is one who can excel in their industry across generations, and by any measure Mr. Buffet is an investing legend. Failing to at least weigh his advice could prove costly.
Fallible
Posts: 7704
Joined: Fri Nov 27, 2009 4:44 pm
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Re: Good quote from Berkshire Report

Post by Fallible »

325e wrote:A thought for my fellow CEOs: Of course, the immediate future is uncertain; America has faced the
unknown since 1776. It’s just that sometimes people focus on the myriad of uncertainties that always exist
while at other times they ignore them (usually because the recent past has been uneventful).

American business will do fine over time. And stocks will do well just as certainly, since their fate is tied
to business performance. Periodic setbacks will occur, yes, but investors and managers are in a game that
is heavily stacked in their favor.
(The Dow Jones Industrials advanced from 66 to 11,497 in the 20th
Century, a staggering 17,320% increase that materialized despite four costly wars, a Great Depression and
many recessions. And don’t forget that shareholders received substantial dividends throughout the century
as well.)

Since the basic game is so favorable, Charlie and I believe it’s a terrible mistake to try to dance in and out
of it based upon the turn of tarot cards, the predictions of “experts,” or the ebb and flow of business
activity. The risks of being out of the game are huge compared to the risks of being in it.


My own history provides a dramatic example: I made my first stock purchase in the spring of 1942 when
the U.S. was suffering major losses throughout the Pacific war zone. Each day’s headlines told of more
setbacks. Even so, there was no talk about uncertainty; every American I knew believed we would prevail.

The country’s success since that perilous time boggles the mind: On an inflation-adjusted basis, GDP per
capita more than quadrupled between 1941 and 2012. Throughout that period, every tomorrow has been
uncertain. America’s destiny, however, has always been clear: ever-increasing abundance.

If you are a CEO who has some large, profitable project you are shelving because of short-term worries,
call Berkshire. Let us unburden you.
In other words, invest well for the long term and stay the course. BTW and just FYI, Buffett was around 12 years old when he bought that first stock; if he'd been, say, six years old, I wouldn't be surprised, considering the prodigy that he was. Thanks for the statement.
"Yes, investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense." ~Jack Bogle
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bottlecap
Posts: 6606
Joined: Tue Mar 06, 2007 11:21 pm
Location: Tennessee

Re: Good quote from Berkshire Report

Post by bottlecap »

If Berkshire would guarantee my losses on that call, I'd take him up on it. But it wouldn't; his reassurance is a farce. Telling businesses to throw caution to the wind, uncertainty or no, is irresponsible. Of course the target audience of that little ditty wasn't really CEOs.

JT
BYUvol
Posts: 120
Joined: Sat Mar 24, 2012 3:06 pm
Location: KY

Re: Good quote from Berkshire Report

Post by BYUvol »

bottlecap wrote:If Berkshire would guarantee my losses on that call, I'd take him up on it. But it wouldn't; his reassurance is a farce. Telling businesses to throw caution to the wind, uncertainty or no, is irresponsible. Of course the target audience of that little ditty wasn't really CEOs.

JT
If you wanted to make a wager sufficiently large, I'm sure one of his insurance businesses would be happy to cover you... for a price.
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