1. What is the definition of Value vs. Growth stocks? (Source: BRK Annual Meeting April 2000)

No distinction in our mind between growth & value. All decision you decide how much value you are going to get. When we buy a stock we think of it in terms of buying the whole enterprise. Aesop’s wrote the first investment primer “A bird in the hand (Lay out cash today) is worth two in the bush”. forgot to say when you get the two in the bush and what the interest rate was. People associate growth with the birds in the bush but they still have to figure out when they get the birds. People often are not thinking of the mathematics implicit in what they are doing.

[Charlie Munger: All intelligent investing is value investing; then acquire more than you are paying for. Investing is where you find a few great companies and then sit on your ass.]

If you have good long ideas on businesses that are undervalued, it is not necessary to short. CM: We made our money by being long wonderful businesses, not by using a long-short strategy. (Source: BRK Annual Meeting 2008 Boodell Notes)

2. How do you avoid misjudgment? (Source: Buffett Vanderbilt Notes 2005)

CM: You don’t have to have perfect wisdom to get very rich – just a bit better than average over a long period of time.] It reminds me of the story about the two guys being chased by the bear and one guy says to the other, “I don’t have to outrun the bear. I just have to outrun you!” Source: BRK Annual Meeting 2005


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