Some investors don't want to dwell on their mistakes, but we closely track over rolling five-year periods how all of our buy/sell decisions are working out. In the same way we don't beat ourselves up for missing something that truly couldn't have been seen in advance, we don't want to take comfort when an investment [...]
I think our being based in Columbus, Ohio makes it easier for us to be independent thinkers, which is so important to successful investing. When we leave the office, we're not very likely to be influenced by what other investors are talking about because there aren't many out there. I honestly believe that's an advantage [...]
We think shorting makes us better analysts. Charlie Munger says you really understand a company when you can articulate the negative scenario better than the person on the other side of the trade. We also think that from a business standpoint, if you've done all the work and conclude the negative scenario is most likely [...]
We evaluate ourselves on rolling five-year periods. If a portfolio manager has one great year, it doesn't factor at all into how he or she is paid. That could just be a random event. I think it's actually a stretch to say five years is long enough to be relevant, but I realize not everyone [...]
In our experience, it can take a lot longer than for value to be realized than we expect, but that it's taking longer doesn't mean we've made a mistake. If the market hasn't recognized the value we see and the company is continuing to increase its intrinsic value, that's when we'd be buying more.
Many investors don’t start with the question of whether General Electric or Procter & Gamble is undervalued, they start by trying to match the weighting in the benchmark. In 2001 when we were short GE, people thought we were crazy: How could you short the greatest company in the world with the best CEO in [...]
People often make it sound complicated, but investing is really all about estimating what something is worth and then buying it at an attractive price. Even though we have a classical value approach analyzing stocks as an ownership stake in a business, calculating intrinsic values, requiring a margin of safety we don't call ourselves value [...]
People often say they emphasize the quality of management or the competitive moat of a company, but the problem with some of those generalizations is that companies with those attributes are very often not attractively priced. Procter & Gamble may today be considered one of best-managed companies in the world, with some of the best [...]