Warren Buffett: Financially fat

“We really like things that you don’t have to carry out to three decimal places, you know. If you have to carry it out to three decimal places, it’s not a good idea…. It’s like if somebody walked in the door here and they weighed somewhere between 300 and 350 pounds. I might not know how much they weigh, but I would know they were fat. That’s all I’m looking for, is something that’s financially fat.” –Warren Buffett.

Warren Buffett: Find wonderful businesses

“In general terms, unless you find the prices of a great company really offensive…. I think it’s better just to own them. We could attempt to buy and sell some of the things that we own that we think are fine businesses. But they’re too hard to find…. So, to sit there and hope that you buy them in the throes of some panic, that you sort of take the attitude of a mortician, waiting for a flu epidemic or something…. I’m not sure that will be a great technique…. I think the main thing to do is find wonderful businesses…. We’ve had our share of flu epidemics. But you don’t want to spend your life waiting around for them.” —Warren Buffett.

Warren Buffett: Well protected

“A really wonderful business is very well protected against the vicissitudes of the economy over time and the competition. I mean, we’re talking about businesses that are resistant to effective competition. And three of those will be better than 100 average businesses. And they’ll be safer, incidentally. There is less risk in owning three easy-to-identify, wonderful businesses than there is in owning 50 well-known, big businesses.” —Warren Buffett.

Warren Buffett: We love focus

“I love focused management. If you read the Coca-Cola annual report, you will not get the idea that Roberto Goizueta is thinking about a whole lot of things other than Coca-Cola. And I have seen that work time after time. And when they lose that focus — as, actually, did Coke and Gillette both, at one point 20 to 30 years ago somewhat — it shows up. I mean, two great organizations were not hitting their potential 20 years ago. And then they became refocused. And what a difference it makes. It makes tens of billions of dollars’ worth of difference, in terms of market value. GEICO actually started fooling around in a number of things in the early ’80s, and they paid a price to do it. They paid a very big price. They paid a direct price, in terms of the cost of those things, because they almost all worked out badly. And then they paid an additional price in the loss of focus on the main business…. So, we like focus. We love focus.” —Warren Buffett.