A Single Year's Performance Is

The Value Of A Business Is The Cash It's Going To Produce In The Future.

Most People Get Interested In Stocks When Everyone Else Is. The Time To Get Interested Is When No One Else Is. You Can't Buy What Is Popular And Do Well.

In That, We Agreed With Andrew Carnegie, Who Said That Huge Fortunes That Flow In Large Part From Society Should In Large Part Be Returned To Society. In My Case, The Ability To Allocate Capital Would Have Had Little Utility Unless I Lived In A Rich, Populous Country In Which Enormous Quantities Of Marketable Securities Were Traded And Were Sometimes Ridiculously Mispriced. And Fortunately For Me, That Describes The U.s. In The Second Half Of The Last Century.

There Is One Thing Of Which I Can Assure You. If Good Performance Of The Fund Is Even A Minor Objective, Any Portfolio Encompassing One Hundred Stocks (whether The Manager Is Handling One Thousand Dollars Or One Billion Dollars) Is Not Being Operated Logically. The Addition Of The One Hundredth Stock Simply Can't Reduce The Potential Variance In Portfolio Performance Sufficiently To Compensate For The Negative Effect Its Inclusion Has On The Overall Portfolio Expectation.

It Isn't Given To Man To Be Able To Run A Financial Institution Where Different Interest-rate Scenarios Will Prevail On All Of That So As To Produce Kind Of Smooth, Regular Earnings From A Very Large Base To Start With.