The Importance of This TV Interview
I recently re-watched one of my favorite Buffett interviews on PBS television, a 7-minute interview from 1985, but it’s very important:
- Buffett’s first public TV interview
- The content is very solid and exciting; it is the basic concept that all stock market investors need to understand
- Buffett’s interview content adopts his usual style, vernacular, easy to understand, short; thought-provoking
- Although it was an interview forty years ago, the content discussed is not out of touch with the times at all
The host is famous
Directed in 1985 by host George Goodman, who helped found one of Wall Street’s premier investment magazines, Institutional Investor, and wrote a book under the pseudonym Adam Smith. The investment book “The Money Game” recommended by Ben Buffett. Goodman writes about his first encounters with Graham and Buffett in his book “Supermoney” That was in 1970, shortly after The Money Game was published. Goodman received a letter from Graham’s summer home in France.
The following are related web link addresses, please click directly:
- The video link has simultaneous Chinese and English subtitles.
- Verbatim transcript of the video, in both Chinese and English.
Highlights of the interview
Number one rule
“The first rule of investing is don’t lose. And the second rule of investing is don’t forget the first rule. And that’s all the rules are. If you buy things at a price far below their value, and you buy a bunch of them, You basically don’t lose money.”
The most important qualities for an investment manager
“It’s a temperamental quality, not an intellectual quality. You don’t need a ton of IQ in this business. I mean, you have to have enough IQ to get from here to downtown Omaha, but you don’t have to be able to play Be in the top league in terms of three-dimensional chess or bridge playing or something similar. You need a stable personality. You need a temperament that neither gets much pleasure from being with the crowd nor from being against the crowd. Gets it because it’s not a business where you vote. It’s a business where you think.”
What mistake do most investors make?
“They don’t really think of themselves as owning part of a business. The real test of whether you’re investing from a value standpoint is whether you care whether the stock market opens tomorrow or not. If you are earning well investing in a security, they should not be worried if the stock market is closed for five years.”
On checking stock prices
“All the tickers tell me is the price. And I can look at the price sometimes to see if the price is extremely cheap or very high, but the prices tell me nothing about a business. The business figures themselves tell me about a business. tells me something about a stock, but the price of a stock doesn’t tell me anything about a business. I would prefer to value a stock or business first, and not even know the price, so that I can go by the price when establishing my valuation. Don’t be impressed and then look at the price later and see if it doesn’t fit my price.”
Omaha vs. Wall Street
NEBRASKA: “Well, believe it or not, we get the mail here and we get the magazines and we get all the facts we need to make a decision. And unlike Wall Street, you’ll notice we don’t have 50 people come in and Whisper into our ear that we should do this or that this afternoon.”
New York: “If I were on Wall Street I would probably be very poor. On Wall Street you get overly excited. And you hear a lot of things, and you can narrow your attention and a narrow focus is conducive to long term profits.” Not there. “
Not owning technology stocks
“I really haven’t [ever bought a technology company], I didn’t understand any of them. Never owned IBM. Amazing company, I mean a sensational company, but I don’t own IBM.”
Missing market trends
“I don’t need to make money in every game. I mean, I don’t know what the cocoa beans are going to do. There’s all kinds of things I don’t know about, and that could be very bad. But you You know, why should I know everything about it? I haven’t worked that hard on it.”
Waiting for the right pitch
“There are no strikes in the business. The pitcher just stands there and throws balls at you… You don’t have to swing at any of them. They can be wonderful pitches to swing at, but if You don’t know enough, you don’t have to swing. And you can sit there and watch thousands of pitches and eventually get one right where you wanted something that you understand, and then You swing.”
“If I’m being asked to participate in a business opportunity, will it make a difference to me whether I bought it on a Tuesday or a Saturday or an election year or something else? That’s not what a businessman thinks about buying a business. So why think about it when buying stocks? Because stocks are just pieces of businesses.”
All stock market investors should not only read this interview carefully, but also listen and review it frequently. Because the content of the interview is the most basic principle of stock market investment, it will last forever and will not lose its value over time.
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