Investment Principles


Price is what you pay, value is what you get. Only buy securities at attractive prices.

Long-term business ownership

Be a buyer of businesses. Be concerned with the company, its business economics, management, history and future prospects. Great businesses should get you excited.

Predictable businesses

It’s much easier to understand and value some types of businesses than others. I prefer understandable and predictable businesses. I prefer businesses that have been around for a long time.

I shy away from concerns that rely on commodity prices, depend on technology or whose financial statements are largely based on estimates.

Show me the money

I like companies that pay dividends. A business that can consistently pay dividends is mature enough to be considered for investment by a conservative investor. Managements who pay dividends and repurchase shares show us that they understand the purpose of a business: to generate cash flow for shareholders.

Better businesses

There are bad businesses, average businesses and great businesses. The distinguishing factor between them is often the existence of a durable competitive advantage. Invest in companies that are better than average to great.


Try to be cautious and realistic in your expectations about business prospects and the economy.

I like businesses with low amounts of debt. I don’t invest on margin.

Ignore the noise

I am not a speculator or technical trader. I don’t care about price charts or daily ups and downs of the market. I also don’t care about economic and stock market forecasts as they are unreliable and distracting.

Stock prices

In the short run, stock prices can go both up and down regardless of underlying business performance. Some people can’t handle the emotional impact when their portfolio is down. Those people may want to avoid investing in common stocks.


Taxes are the largest expense associated with investing. The best way to avoid capital gains tax is not to sell your investments. Thus it helps to buy stocks you want to hold for a long time.


Value investing takes patience and discipline. The value investor can identify businesses he would like to own but must then wait patiently for a reasonable price at which to buy.


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