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Buffett: Invest In Wonderful Businesses At Fair Prices
Aspire, Thought Leaders | 03 March 2015
By: Vance Wong
Articles (74) Profile

In Buffett’s latest letter to the shareholders of his prized company, Berkshire Hathaway, the billionaire legend revealed his mistakes-filled journey as an investor.

However, he explained that those mistakes are what made him realise short-term bargains were attractive investments but the “wrong foundation” to “build a large and enduring enterprise.”

The billionaire magnate used his own company’s acquisition holdings as concrete examples of successful long-term investments. Buffett always has strong interest in simple but wonderful businesses that are priced fairly. These are normally the companies that will guarantee unceasing and increasing profits over a long span of time.

A clear example is See’s Candy, known for its boxed chocolates and most importantly for Buffett, a “broad and durable competitive advantage that gave it significant pricing power.”

Buffett expected See’s Candy to “gush cash for decades to come.” True enough, See’s Candy earned Berkshire Hathaway almost $1.9 billion since the acquisition, at a mere cost of $25 million and an extra $40 million over the years.

Buffett mentioned he owed most of his success to his vice-chairman, Charles Munger, a friend and partner since 56 years ago. Munger gave his partner an important “architectural blueprint” that was simple: Forget what you know about buying fair businesses at wonderful prices; instead, buy wonderful businesses at fair prices.

With a Communications background, Vance has the passion to write with a purpose - to provide content supported with substantial evidence to vested readers.

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