Table of Contents 1994 ............................................................................................................................................................................... 8 18. “Two yardsticks” for judging management ......................................................................................................... 8 Ignoring Macro .......................................................................................................................................................... 9 48. We’d rather buy an entire company, but stocks offer more bargains ................................................................ 9 53. Don’t need interest rate outlook to value companies ...................................................................................... 10 8. Unlikely to write put options on Coca-Cola again ............................................................................................... 11 12. We don’t like to “give you our answers” on Coca-Cola ..................................................................................... 11 Valuation ................................................................................................................................................................. 11 1995 ............................................................................................................................................................................. 12 23. Big assets make float more flexible ................................................................................................................... 12 Moat ........................................................................................................................................................................ 13 Ben Graham ............................................................................................................................................................. 13 31. Focus on Graham’s three principles .................................................................................................................. 13 9. Comparing investing styles of Ben Graham and Phil Fisher ................................................................................ 14 Accounting ............................................................................................................................................................... 15 31. Secret to avoiding lawsuits: “You can’t make a good deal with a bad person” ................................................ 15 35. “Advanced math is of no use” in investing ........................................................................................................ 16 36. Management made the difference for Wells Fargo .......................................................................................... 17 39. Expect big changes in banking over next 20 years ............................................................................................ 18 43. Coca-Cola as “measuring stock” to evaluate alternatives ................................................................................. 18 47. Focus on future, not current, earnings .............................................................................................................. 18 1996 ............................................................................................................................................................................. 19 P&C and Banking ..................................................................................................................................................... 19 39. Discount rate for estimating intrinsic value ...................................................................................................... 20 43. “Outside information” in annual reports .......................................................................................................... 20 Downsizing .............................................................................................................................................................. 21 P&C vs Investing ...................................................................................................................................................... 21 Problems .................................................................................................................................................................. 22 11. Why $7B of insurance float is better than $7B of cash ..................................................................................... 22 13. Don’t wait for downturn to buy a great company ............................................................................................ 22 Predictability ............................................................................................................................................................ 23 1997 ............................................................................................................................................................................. 24 Price for Good Businesses ....................................................................................................................................... 24 Understanding a Business ....................................................................................................................................... 24 Opportunity Cost ..................................................................................................................................................... 24 17. “It’s not share of market. It’s share of mind that counts” ................................................................................ 24 LEAPS ....................................................................................................................................................................... 26 Disconfirming Evidence ........................................................................................................................................... 26 Ben Graham ............................................................................................................................................................. 26 1998 ............................................................................................................................................................................. 27 23. “What is important and what is knowable?” .................................................................................................... 27 24. Praise for Value Line’s “perfect snapshot” ........................................................................................................ 28 26. “Wonderful companies” should buy back stock ............................................................................................... 28 27. Berkshire insurance float has a negative cost ................................................................................................... 29 35. Ignoring asset gains at Coca-Cola ...................................................................................................................... 30 37. Benjamin Graham and how Buffett would teach investing .............................................................................. 30 Technology .............................................................................................................................................................. 31 9. Checklist for selecting stocks ............................................................................................................................... 31 Selling at the Top ..................................................................................................................................................... 32 Market Valuation ..................................................................................................................................................... 32 Maintenance Capex ................................................................................................................................................. 32 42. How Phil Fisher’s “scuttlebutt” method changed Buffett’s life ........................................................................ 32 Volatility................................................................................................................................................................... 34 46. “Get more quality than you’re paying for” ....................................................................................................... 34 51. McDonald’s vs. Dairy Queen ............................................................................................................................. 34 1999 ............................................................................................................................................................................. 35 11. “Right approach” to estimating Berkshire’s intrinsic value ............................................................................... 35 Internet Impact ........................................................................................................................................................ 36 16. Big returns are easier with small amounts of money........................................................................................ 36 18. Corporations hooked on “corrupt” stock option accounting ...........................................................................