ROD MACIVER recounts his experience of passing on an opportunity to invest in Berkshire Hathaway in 1982 when it was trading at $97 because he thought it was too expensive.
He reflects on what he learned from passing on that opportunity and the years he worked as an investment analyst on Wall Street. He notes that the role of financial markets is to take money away from mediocre and underperforming companies and put it in stable, growing, high return on capital companies.
He advises that the best approach is investing in high return on capital, low debt, growing companies that have the ability to reinvest earnings in the business and generate high returns on those reinvested earnings. He also notes the importance of patience and investing only once every 10 or 20 years, liquidating holdings once a decade, and spending long periods of time in cash.
Leave a Reply