Buffett Talks about Diversification

Question: What are your views on diversification? Buffett: I have 2 views on diversification. If you are a professional and have confidence, then I would advocate lots of concentration. For everyone else, if it’s not your game, participate in total diversification. The economy will do fine over time. Make sure you don’t buy at the […]

Buffett on Asset Allocation

Question: What do you think of setting an asset allocation? Warren Buffett: We don’t hold any committee meetings. The business of saying you should have 50% in stocks, 30% in bonds…it’s nonsense. The idea of recommending that assets should be split 60/40 [between stocks and bonds], and then have a big announcement that you’re moving […]

Buffett on Share Repurchases

Gillette doesn’t repurchase their shares … Coke consistently repurchases their shares. We generally like the policy of companies that have really wonderful businesses repurchasing their shares. The problem with most companies repurchasing their shares is that they are frequently so-so businesses and they are repurchasing shares for purposes other than intensifying the interest of shareholders […]

What is intrinsic value

“Book value tells you what has been put in; intrinsic business value estimates what can be taken out. “ Buffett: Chairman’s Letter – 1983 – Berkshire Hathaway, Inc. Link: http://www.berkshirehathaway.com/letters/1983.html Now let’s focus on two terms that I mentioned earlier and that you will encounter in future annual reports. Let’s start with intrinsic value, an all-important concept that […]