1 a b c 2 3 4 5 6 8 9 10 11

12 13 14

21 22 23

24

Even if you are unleveraged, the leverage employed by others can drive dramatic price and valuation swin

sudden unavailability of leverage in the economy may trigger an economic downturn. Be sure that you are well compensated for illiquidity especially illiquidity without control because it can create particularly high opportunity costs consideration of risk must never take a backseat to return

We have owned 100% of businesses whose reported earnings were not worth close to 100 cents on the dollar to us even though, in an accounting sense, we totally controlled their disposition. (The control was theoretical. Unless we reinvested all earnings, massive deterioration in the value of assets already in place would occur. But those reinvested earnings had no prospect of earning anything close to a market return on capital.) We have also owned small fractions of businesses with extraordinary reinvestment possibilities whose retained earnings had an economic value to us far in excess of 100 cents on the dollar

When the markets are fairly ebullient, investors tend to hold the least objectionable securities rather than the truly significant bargains. But the inability to hold cash and the pressure to be fully invested at all times meant that when the plug was pulled out of the tub, all boats dropped as the water rushed down the drain.

Neither a short-term borrower nor a long-term lender be. -Warren E. Buffett restating Polonius slightly in his 1979 Letter to Shareholders of Berkshire Hathaway

The less prudence with which others conduct their affairs, the greater the prudence with which we should c -W Buffett

Quality of management integrity competence depth management interest aligned with the company management track record management compensation earnings- last 10 years are u seeing boom time earnings what are the important inputs/factors affecting margins moat how can this business get killed( say what will happen under chinese competition?) is this a win - win situation for entire eco system (credit cards, liquor all these do not fit this)

HR practices - labor relations - labor interest taken care of or not what is the risk- reward is this low risk high uncertainty situation

finance angle questions In any real estate investment think what will happen if prices stop rising. Better still if prices start to decline. The books of a company may not be as reliable as they once were. Don't trust the numbers. Always look behind them. Indicators to measure Economy's temperature a. Inflation b. Capacity constrains c.Labor market (certain % of unemployment ia good) d. Bank credit growth Vs GDP growth - if more than it indicates credit expansion that can lead to bubble e. Real interest rate - how much -ve it is f. External balance ( Current account deficit)

All man's miseries stem from his inability to sit in a room alone and do nothing.---Pascal Charlie Munger likes to say that you don't make money when you buy stocks. And you don't make money whe You make money by waiting. You have to be ready to take advantage of opportunities to succeed. This is what they do at BRK. They are always ready. You do not want to be timid when great opportunities arise. Even if you are unleveraged, the leverage employed by others can drive dramatic price and valuation swings;

sudden unavailability of leverage in the economy may trigger an economic downturn. Be sure that you are well compensated for illiquidity especially illiquidity without control because it can create particularly high opportunity costs consideration of risk must never take a backseat to return

We have owned 100% of businesses whose reported earnings were not worth close to 100 cents on the dollar to us even though, in an accounting sense, we totally controlled their disposition. (The control was theoretical. Unless we reinvested all earnings, massive deterioration in the value of assets already in place would occur. But those reinvested earnings had no prospect of earning anything close to a market return on capital.) We have also owned small fractions of businesses with extraordinary reinvestment possibilities whose retained earnings had an economic value to us far in excess of 100 cents on the dollar

When the markets are fairly ebullient, investors tend to hold the least objectionable securities rather than the truly significant bargains. But the inability to hold cash and the pressure to be fully invested at all times meant that when the plug was pulled out of the tub, all boats dropped as the water rushed down the drain.

Neither a short-term borrower nor a long-term lender be. -Warren E. Buffett restating Polonius slightly in his 1979 Letter to Shareholders of Berkshire Hathaway

The less prudence with which others conduct their affairs, the greater the prudence with which we should cond -W Buffett

rices start to decline.

n lead to bubble

on't make money when you sell stocks.

and valuation swings;

rol because

hire Hathaway

which we should conduct our own affairs.