📍 It’s Berkshire Weekend.
I just read Buffett & Munger Unscripted by Alex W. Morris on the way to Omaha
Here are the most important lessons:
1. Buffett’s first question for every stock:
“If I were buying the whole company, would I be happy owning it forever?”
He doesn’t think like a trader.
He thinks like an owner.
“If I were buying the whole company, would I be happy owning it forever?”
He doesn’t think like a trader.
He thinks like an owner.
2. Focus on ROE
“Time is the enemy of the poor business.”
Mediocre businesses get worse with time.
Great ones get stronger.
Buffett and Munger learned this the hard way, from owning bad businesses.
“Time is the enemy of the poor business.”
Mediocre businesses get worse with time.
Great ones get stronger.
Buffett and Munger learned this the hard way, from owning bad businesses.
3. They hate EBITDA
Because it hides how much cash a business really needs to survive.
Because it hides how much cash a business really needs to survive.
4. They reject the “value vs growth” debate
“All investing is value investing.” - Charlie Munger
“All investing is value investing.” - Charlie Munger
5. Buffett and Munger avoid hard decisions.
They skip businesses that are complex or unpredictable.
If it’s not in their circle of competence, they pass. Quickly.
They skip businesses that are complex or unpredictable.
If it’s not in their circle of competence, they pass. Quickly.
6. It’s all about opportunity cost
A new idea isn’t enough.
It has to beat everything else they already own.
“We preferred being certain of a decent result over hoping for a brilliant one.”
A new idea isn’t enough.
It has to beat everything else they already own.
“We preferred being certain of a decent result over hoping for a brilliant one.”
7. They use mental filters
“Sometimes we seem rude—because we cut people off after 10 seconds.”
If an idea doesn’t pass the first filter, they don’t waste time.
Focus is their superpower.
“Sometimes we seem rude—because we cut people off after 10 seconds.”
If an idea doesn’t pass the first filter, they don’t waste time.
Focus is their superpower.
8. Not every great business can reinvest profits
“Most great businesses don’t generate high returns on incremental capital.”
“Most great businesses don’t generate high returns on incremental capital.”
9. Don’t trust modern finance.
Buffett:
“The silliest stuff we’ve seen is taught in business schools.”
They ignore complex formulas like CAPM, beta, and Black-Scholes.
Instead, they ask:
“What’s the business worth?”
Buffett:
“The silliest stuff we’ve seen is taught in business schools.”
They ignore complex formulas like CAPM, beta, and Black-Scholes.
Instead, they ask:
“What’s the business worth?”
10. Emotional control > IQ
Buffett:
“Smart people do very stupid things.”
Like using leverage to chase what they don’t need.
Discipline always beats brilliance.
Buffett:
“Smart people do very stupid things.”
Like using leverage to chase what they don’t need.
Discipline always beats brilliance.
I'd recommend Buffett & Munger Unscripted by Alex W. Morris to everyone.
Can't get enough of Buffett quotes?
I compiled a list of 100 (!) quotes in a free PDF: compounding-quality.kit.com/b73497df0b
Can't get enough of Buffett quotes?
I compiled a list of 100 (!) quotes in a free PDF: compounding-quality.kit.com/b73497df0b
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