Warren Buffett talks about a company's value moving through innovation, imitation and then idiocy phases. We're most comfortable in the early stages when we think we're kind of writing the intellectual property. That's not to say there's not a lot of money to be made in the imitation and even idiocy phases, but it's not [...]
Sometimes we sell when we've been right, sometimes we sell when we've been wrong, and sometimes we sell because there are four more things that became more compelling. There's a common expectation that people who do primary research in the depth we do to arrive at their own fundamental view of what value is over [...]
We think there are profound research advantages in concentration. This is a world of very smart people and you can't enter that marketplace without a profoundly humble view about how you're going to win. For us, concentration and depth of research allows us to go to bed at night and feel like we have a [...]
We recently read Groupthink, Irving Janis' classic study of how small, cohesive groups of very smart people can make really bad decisions, such as getting deeper into Korea, the Bay of Pigs, and Vietnam. The main point is to make sure you have a culture that questions everything and vets out all the decision alternatives [...]
I refer to our investment committee meetings as “Fight Club,” but there's a respectful way of valuing your colleagues while at the same time questioning every word that comes out of their mouths.
It comes down to doing business with people you trust. We pay careful attention to all management communication. Does the CEO write the shareholder letter himself or herself? Do they tell you when they've been right and when they've been wrong? Do they talk about what's difficult about the business? Do they articulate how they [...]
We don’t typically bet on scientific innovation, so we rarely find things we’ll consider in healthcare. We avoid many areas in technology because of the speed of the product cycles and the magnitude of change from cycle to cycle.