Source L Buffett 1988 University of Florida Lecture Arrangement
From 65438 to 0998, Buffett gave a very meaningful speech at the University of Florida Business School. This speech was later called the most classic speech of Buffett's life, and there was no one. Duan Yongping highly recommended the content of this speech, which is said to have been watched 10 times.
The original text of the speech is long, and we have compiled 40 excerpts from it, involving investment ideas, business judgments and some suggestions for young people. I believe it will inspire you after reading it.
0 1
Don't do anything beyond the scope of safety.
0 1. Suppose you give me a gun with 1000 magazines and 100 magazines in it. Only one magazine has bullets in it. You said, "Put a gun to your temple and pull the trigger. How much do you want? " I won't do it. No matter how much you give me, I will not do it.
If I win, I don't need money; If I lose, the result is self-evident. I don't want to do such a thing at all, but in the financial field, people often do such things without thinking. ? 02. Suppose you have 1 billion dollars at the beginning of the year, you can earn 10% without leverage, and you can earn 20% with leverage. At the end of the year, you have $65,438 +0. 1 billion, that is, $65,438 +0.2 billion. What's the difference? It makes no difference. ? If you die at the end of the year, the person who wrote the obituary may have a clerical error. Although you have1.200 million, he wrote1.1.800 million.
What's the use of extra money? It's useless. It's useless to you, to your family and to others. ? 03. We have hardly borrowed money. Of course, our insurance company has liquidity, but I have never borrowed money at all.
I don't borrow money when I only have 1 000 yuan. Will it make any difference if I don't borrow money? I am also happy to invest when I have little money.
I don't care if I have 1 million, 1 million or 1 million. Unless there is an emergency, such as a serious illness, you need money badly.
04. If you have 1 yuan now and think you will be happier with 2 yuan in the future, you may be wrong. Don't think that earning 10 or 20 times can solve all the problems in your life. Such an idea can easily lead you into a ditch.
Borrow money when you shouldn't, or be eager for quick success and instant benefit, be opportunistic, do something you shouldn't do, and there is no place to buy medicine for regret in the future.
A business that you can understand is a good business.
05. American economist Henry Kaufman has such a famous saying:
"There are two kinds of bankrupt people, one who knows nothing and the other who knows everything."
I hope everyone will take a warning. ? 06. I like business that I can understand. I used this screening, and 90% of the companies were filtered out.
You can't do something when you know you don't understand it.
07. I don't like simple business. Will attract competitors. I like the business with a moat.
I hope to have a priceless castle, the duke who guards the castle has both ability and political integrity, and there is a wide moat around the castle.
I often tell managers of Berkshire subsidiaries to widen the moat. Throw crocodiles and sharks into the moat and keep competitors out.
It depends on the service, product quality, cost, and sometimes on the patent or business location. This is a kind of business I am looking for.
Where can I find such a business? I look for good business from these simple products.
In fact, it is easy to understand that the economic situation is good now and the management has both ability and political integrity. I can probably see what such an enterprise will look like in ten years. Some businesses, I don't see what will happen in ten years, I won't buy them. ? For companies like Oracle Bone Inscriptions, Lotus and Microsoft, I just don't understand what their moat will look like in ten years.
Gates is the best business wizard I have ever seen, and Microsoft has a huge lead, but I really don't know what Microsoft will be like in ten years, and I can't know exactly what Microsoft's competitors will be like in ten years. ? However, I know what the chewing gum business will be like in ten years. No matter how the internet develops, it can't change our habit of chewing gum. Nothing seems to change our habit of chewing gum. There will definitely be more new varieties of chewing gum, but will the white arrows and yellow arrows disappear? No? I imagine myself, if I have $654.38+0 billion, can I hurt this company? Give me $654.38+000 billion to compete with Coca-Cola in the world. Can I hurt Coca-Cola? I can't do it. This kind of business is good business.
08. Always know what you are doing, so that you can make a good investment. We must understand the business. We can understand some businesses, but not all businesses. ? 09. We don't care whether a company is big, small, medium or super-small, we only consider the following points:
Can we know something about this company's business? Do we like the management of this company? Is the price of this company cheap?
Buying stocks is buying companies.
The market decline is a good opportunity.
10. If the company you invest in doesn't make money, it's hard for you to make money.
1 1. After people buy stocks, they stare at the stock price the next morning to see if the stock price determines whether their investment is good or not, so they are confused.
Buying a stock is buying a company, which is the most basic truth Graham taught me.
Remember, you didn't buy shares, but part ownership of the company. As long as the company's business is good and the price you buy is not outrageous, your income is not bad, and investing in stocks is as simple as that.
12. I'd rather see the market fall. It is easier to buy good goods and make good use of money when money plummets. This is a truth that must be learned first. ? 13. If you want to buy something, you must have a reason. If you can't explain why, don't buy it. ? 14. Some people regard buying stocks as watching horse races, so it doesn't matter, but if you are investing, investing means putting money in to ensure that you can get your money back at a suitable rate of return in the future.
15. What we want is not how to get a super high rate of return, but always remember never to lose money. ?
16. The most worthwhile companies are those you think are expensive in quantity, but you still want to buy them.
04 Grasp the competence circle and identify good business.
17. If you can't understand a business at a glance, it will take you a month or two to understand it.
To understand an enterprise, you must have enough background knowledge to know what you know and what you don't know is the key. This is what I often call the ability circle. Identify your own circle of competence.
18. Everyone has his own ability circle. What matters is not how big the ability circle is, but staying in it.
If there are thousands of companies on the main board, your ability circle only covers 30 of them, as long as you know which 30 are.
19. As long as it is a good business, nothing else matters. As long as it's a good business, I don't care about big things and small things, and I don't think about what will happen this year and next year. ? Good business, you can see what the future will be like, but you don't know when.
When you look at a business, you concentrate on what it will look like in the future, and don't worry too much about when. It doesn't matter when you see through the future of business.
20. For my partner Charles Munger and me, the biggest mistake we made was not what we did wrong, but what we should have done.
In these mistakes, we know the business very well and should take action, but somehow, we just hesitated and did nothing. ? 2 1. I don't study macro issues. The most important thing in investing is to find out what is important and what is knowable. If something is unimportant and unknowable, leave it alone.
22. The routine of general consulting institutions is this: first, take your economists out for a walk and talk about some big macro patterns, and then analyze them from top to bottom. We think that's nonsense.
23. When we decide whether to buy a company, we never take our feelings about macro issues as the basis. We don't look at the forecast of interest rates or corporate profits, and it's useless to look at it.
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05
Be a friend of time
Make money by not tossing
24. Find a good investment opportunity within one year, and then hold it all the time, waiting for its potential to be fully released.
In an environment where people shout quotations back and forth in five minutes, in an environment where others always shove various reports in front of you, it is difficult to stick to it. Wall street makes money by tossing, and you make money by not tossing.
If everyone here trades their portfolios with each other every day, everyone will eventually go bankrupt and all the money will eventually go into the pockets of middlemen. ? In other words, you all hold a portfolio of ordinary companies, which will remain unchanged for 50 years. In the end, you will all become rich, and your broker will go bankrupt. Brokers are such doctors. The more times he asks you to change your dressing, the more he earns.
If he gives you medicine to cure your illness, he can only make a deal, a deal, and then it's gone. If he can convince you that changing all kinds of medicines every day is good for your health, good for him and good for those who sell medicines, you will lose a lot. If it doesn't work, it will lose.
26. Stay away from any environment that stimulates you to repair.
No matter which company you buy, you don't set a price target when you buy it.
For example, we bought it at 30, but we didn't expect to sell it at 40, 50, 60, 100. This has never happened before.
We hope that the company we acquired will look good now, and it will look good in five years.
The correct way to think about a company is whether it can make more and more money in the long run. If the answer is yes, there is no need to ask other questions.
29. Time is a friend of good business and an enemy of bad business.
If you hold a bad business for a long time, even if you buy it cheaply, you can only get a bad return in the end. If you hold a good business for a long time, even if you buy it more expensive, you will still get excellent returns as long as you hold it for a long time.
Diversified businesses should not exceed six.
30. If you are not a professional investor and don't pursue the goal of achieving excess returns through managing funds, I think you should highly diversify your investments. 3 1. If you really understand business, you should have no more than six businesses.
If you can find six good businesses, it's already spread out, there's no need to spread it out again, and you can make a lot of money.
I can assure you that if you don't invest your money in the business you like, you will definitely fall into the ditch when you go to the seventh business. Few people get rich by the seventh best idea, but many people get rich by the best idea. 32. If you ask me, if I put all my money into one company and stay still for 20 years, I would choose Procter & Gamble or Coca-Cola. In fact, P&G's product line is more diversified, but in comparison, I think Coca-Cola is more certain than P&G..
P&G can be selected into the top 5% companies I am most optimistic about. P&G will not be defeated by competitors, but in the next two or three decades, I am more optimistic about the sales growth potential and pricing power of Coca-Cola between P&G and Coca-Cola. ? 33. I prefer industries where products sell well.
In recent years, there have been more and more promotional activities of McDonald's, relying more and more on promotion, not on the product itself.
In contrast, I prefer Gillette. People buy Su Feng 3 because they like the product itself, not to get any gifts. ?
Every night, think about 100 million men's beards growing. When sleeping, a man's beard keeps growing and he can sleep soundly. On second thought, it is better for a woman to have two legs. This method is much more useful than counting sheep. If you want to find it, you can find such a merchant.
07
Some advice for young people
34. The shackles of habit are hard to detect at first, but then they are too heavy to get rid of.
35. If someone shuts me down, but I can earn 654.38 billion dollars by going with him, I will flatly refuse, otherwise it is no different from getting married for money.
At any time, you can't get married for money, especially if you are already rich. ? 36. I have a job I love. I like my job when I think that earning $65,438+$0,000 is a lot of money.
Students, do what you like. If you always do things you don't like to make your resume more beautiful, you are really confused. ? 37. What do you want to do after wealth is free? What kind of work should you do now is the ideal job. ? 38. Don't you think it's a bit like saving your sex life when you are young and saving it for later?
Sooner or later, you should all start doing what you really want to do.
39. We never think about the past. We feel that there is so much to look forward to in the future, so why dwell on the past?
It's no use dwelling on the past, life can only look forward.
40. Do what you like all your life and make friends with people you like.