- Go for the kill, do not to get killed
Buffett’s Berkshire might be the world’s largest financial company by revenues, with a market-cap in the north of $400 billion, but the legendary investor does not believe in buying businesses at higher price.
Data suggests Berkshire had $112 billion in US Treasury bills and other cash equivalents as of December 31, and another $20 billion in miscellaneous fixed-income instruments. Buffett said he would never risk getting caught short of cash.
- Beware of ‘innocent’ fudge
Buffett said over the last many years, he has seen all sorts of bad corporate behaviour, both accounting and operational. He believes the behaviour is induced by the desire of management to meet Wall Street expectations.
- Look at earnings, not stock fluctuations
Buffett’s Berkshire managed $173 billion worth of stocks as of December 31. Buffett said this huge exposure often experienced one-day price fluctuations of $2 billion or more.
- Doomsayer peach: Should you bother?
Don’t always go by what doomsayers say. He said this in the context of the US economy.