With Saturday’s release of Warren Buffett’s annual shareholder letter, the WSJ did a piece on some of his best quotes through the years. Here are two that caught my eye.
The importance of price
“The first law of capital allocation—whether the money is slated for acquisitions or share repurchases—is that what is smart at one price is dumb at another.”
Feb. 25, 2012Bubbles pop
“Over the past 15 years, both Internet stocks and houses have demonstrated the extraordinary excesses that can be created by combining an initially sensible thesis with well-publicized rising prices. In these bubbles, an army of originally skeptical investors succumbed to the ‘proof’ delivered by the market, and the pool of buyers—for a time—expanded sufficiently to keep the bandwagon rolling. But bubbles blown large enough inevitably pop. And then the old proverb is confirmed once again: ‘What the wise man does in the beginning, the fool does in the end.’”
Feb. 25, 2012
Action Line: When you want to talk, I’m here. In the meantime, click here to subscribe to my free monthly Survive & Thrive letter.
