Our favourite holding period is forever.
When a management team with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact.
In the business world, the rearview mirror is always clearer than the windshield.
It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently.
If a business does well, the stock eventually follows.
I insist on a lot of time being spent, almost every day, to just sit and think. That is very uncommon in American business. I read and think. So I do more reading and thinking, and make less impulse decisions than most people in business. I do it because I like this kind of life.
Price is what you pay. Value is what you get.
Failing conventionally is the route to go; as a group, lemmings may have a rotten image, but no individual lemming has ever received bad press
In the long run managements stressing accounting appearance over economic substance usually achieve little of either.
Time is the enemy of the poor business and the friend of the great business. If you have a business that's earning 20%-25% on equity, time is your friend. But time is your enemy if your money is in a low return business.
The business schools reward difficult complex behavior more than simple behavior, but simple behavior is more effective.
When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact.
Your premium brand had better be delivering something special, or it's not going to get the business.
One of RJR's largest shareholders, he knew tobacco and liked it. I'll tell you why I like the cigarette business, he said. It costs a penny to make. Sell it for a dollar. It's addictive. And there's fantastic brand loyalty.
We're more comfortable in that kind of business. It means we miss a lot of very big winners. But we wouldn't know how to pick them out anyway. It also means we have very few big losers - and that's quite helpful over time. We're perfectly willing to trade away a big payoff for a certain payoff.