Thursday, June 26, 2008
Wednesday, June 25, 2008
Warren Buffett says, "The line separating investment and speculation, which is never bright and clear, becomes blurred still further when most market participants have recently enjoyed triumphs. Nothing sedates rationality like large doses of effortless money. After a heady experience of that kind, normally sensible people drift into behavior akin to that of Cinderella at the ball.”
“They know that overstaying the festivities - that is, continuing to speculate in companies that have gigantic valuations relative to the cash they are likely to generate in the future - will eventually bring on pumpkins and mice. But they nevertheless hate to miss a single minute of what is one helluva party. Therefore, the giddy participants all plan to leave just seconds before midnight. There's a problem, though: They are dancing in a room in which the clocks have no hands."
Was always fascinated by this man. Prof. Milind Rao's inspired us to research Buffet's company (Berkshire Hathaway) and other holding companies and his strategies as part of the "Value Investing" course. This sure looks like it will be one helluva learning ride.