When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact.
Interpretation
Reputation matters more than talent in challenging situations.
Warren Buffett's quote highlights the importance of a company's reputation over the expertise of its management. Even a brilliant management team can struggle when dealing with systematic issues in a company known for poor financial practices, suggesting that underlying economic realities will ultimately prevail despite exceptional leadership.
In practice
This quote can be used in a business seminar to highlight the importance of a company's reputation.
I have no views as to where it will be, but the one thing I can tell you is it won't do anything between now and then except look at you. Whereas, you know, Coca-Cola (KO) will be making money, and I think Wells Fargo (WFC) will be making a lot of money and there will be a lot - and it's a lot - it's a lot better to have a goose that keeps laying eggs than a goose that just sits there and eats insurance and storage and a few things like that.
If the world couldn't see your results, would you rather be thought of as the world's greatest investor but in reality have the world's worst record? Or be thought of as the world's worst investor when you were actually the best?
Cash never makes us happy, but it's better to have the money burning a hole in Berkshire's pocket than resting comfortably in someone else's.
I think you should read everything you can. In my case, by the age of 10, I'd read every book in the Omaha public library about investing, some twice. _x000D_ You need to fill your mind with various competing thoughts and decide which make sense.
The most common cause of low prices is pessimism - some times pervasive, some times specific to a company or industry. We want to do business in such an environment, not because we like pessimism but because we like the prices it produces. It's optimism that is the enemy of the rational buyer.
Oneβs objective should be to get it right, get it quick, get it out and get it over. Your problem wonβt improve with age.
I was never, ever interested in becoming a businessman or an entrepreneur. If I was a businessman, or saw myself as a businessman, I would have never gone into the airline business.
The business world worships mediocrity. Officially we revere free enterprise, initiative and individuality. Unofficially we fear it.
If you have a business model that relies on customers being misinformed, you better start working on changing your business model.
Today, if someone showed me a five-year plan, I'd toss out the pages detailing Years Three, Four and Five as pure fantasy Anyone who thinks he or she can evaluate business conditions five years from now, flunks.
All business proceeds on beliefs, or judgments of probabilities, and not on certainties.
Business is not just doing deals; business is having great products, doing great engineering, and providing tremendous service to customers. Finally, business is a cobweb of human relationships.
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