Thursday 7 April 2016

It is better to buy a wonderful company at fair price than a fair company at wonderful price.

Warren Buffett's 4 Tenets:

1.  Know the business you wish to own (Circle of Competence Tenet)
2.  Business must have economic moat (Durable Competitive Advantage Tenet)
3.  Management must be hardworking, intelligent and above all, honest (Integrity Tenet)
4.  Buy at fair price (Quantitative Margin of Safety Tenet)

Qualitative Margin of Safety Tenets = 1 + 2 + 3

Qualitative Margin of Safety first, then Quantitative Margin of Safety.



Over the last 12 years, the prices of these stocks have shown the following gains:

Screen 1: 200% (3 bagger)
Screen 2: 200% (3 bagger)
Screen 3: 100% (2 bagger)
Screen 4: 900% (10 bagger)
Screen 5: 100% (2 bagger)
Screen 6: 200% (3 bagger)
Screen 7: 900% (10 bagger)
Screen 8: 200% (3 bagger)
Screen 9: 900% (10 bagger)
Screen 10: 500% (6 bagger)


It is better to buy a wonderful company at fair price than to buy a fair company at wonderful price.

When do you sell a wonderful company?  Almost never.








Reference:  My Investing Philosophy

3 comments:

investbullbear said...

Over the last 12 years, the prices of these stocks have shown the following gains:

Screen 1: 200% (3 bagger)
Screen 2: 200% (3 bagger)
Screen 3: 100% (2 bagger)
Screen 4: 900% (10 bagger)
Screen 5: 100% (2 bagger)
Screen 6: 200% (3 bagger)
Screen 7: 900% (10 bagger)
Screen 8: 200% (3 bagger)
Screen 9: 900% (10 bagger)
Screen 10: 500% (6 bagger)

ronnie said...

Dear Sir/Madam,

The names of the companies have been omitted.

Thank you for your excellent work.

Beat NASDAQ said...

Wise words of wise man. Warren Buffet knows what he is talking about. It enough to look at his portfolio.