Devoted to Managers and those that seek to improve their management skills

Consistency - Not ups and downs

Every time that the stock market may offer some growth that outperforms Berkshire Hathaway (BRK-A) in the short-term, you get people coming out of the woodwork talking about the failure of Buffett's management and investment style.

On the other side of it, let things go on for a few years, and eventually the ones making the statements and observations have to admit that they are wrong, as they did when they tried to put huge pressure upon Buffett to invest in the Internet companies that he proved overall were vapor and smoke.

What Buffett understood was that there will always be big swings in stock prices and runups that really don't mean a thing; it all works itself out in the end and reflects the real value that a company represents.

He has proven with the companies he's bought and managers he's retained, that it is the consistency and understanding of what the company does, that is the key to long-term growth and success. Because Buffett understands the businesses that he invests in or buys, it gives him the ability to know that the consistency of those businesses can be reasonably projected out over a period of years. That's a huge competitive advantage.

As a result, it's irrelevant to him that a price may sit still for years or move up and down, he knows the business and it's realistic growth potential over periods of time. When you have that type of consistency, short-term fluctuations don't really mean a thing.

All of this points to our management and businesses as we need to know that in spite of temporary swings, we should know the businesses we're in, and whether things are booming or slowing down, over the long run they'll perform within the projected parameters that knowing our businesses provide. That's the power that consistency offers us. And consistency comes from understanding the business, products and services we offer.

Company growth

“Everybody Else is Doing it”

MSU students have special visit with billionaire Warren Buffett

WARREN BUFFETT PHILOSOPHY II

Sticking to what you know  Core businesses

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