Bravo. My thoughts exactly. Sometimes I think Value Investors are cursed by chasing the cheapest possible entry points.

I figure you sort of need one of two skills.

Either skill enough at valuation that you get a reasonable entry price.
Or sufficient skill at security selection to find something with such a long future of reliable value generation that you can hold so long that valuation at entry doesn't matter much to your annualized rate of return.

All entries long ago for Berkshire look pretty good now, in the same way that all of Berkshire's buybacks to date look good now. But never forget that that observation is hindsight...we were in something that had a long future. Not everything does.

One could make a case that valuation is easier than predicting a business out 10-20 years, so getting a half-way decent entry price is probably still a good thing to aim for--margin of safety and all that. Not everything has a glorious future, but almost everything has a price.

Jim

Berkshire Hathaway FAQ

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