I have pledged - to you, the rating agencies and myself - to always run Berkshire with more than ample cash. We never want to count on the kindness of strangers in order to meet tomorrow's obligations. When forced to choose, I will not trade even a night's sleep for the chance of extra profits.
Interpretation
The quote emphasizes the importance of financial prudence and integrity in business.
Warren Buffett highlights the necessity of maintaining a strong cash reserve to ensure operational stability and to honor commitments without relying on external help. He prioritizes long-term security and ethical practices over short-term financial gains, showcasing a deep understanding of responsible business management.
In practice
During a financial presentation, one might use this quote to stress the need for prudence in managing company finances.
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.
One’s objective should be to get it right, get it quick, get it out and get it over. Your problem won’t improve with age.
You're the only one who knows when you're using things to protect yourself and keep your ego together and when you're opening and letting things fall apart, letting the world come as it is - working with it rather than struggling against it. You're the only one who knows.
I could say that all my books were conceived by the time I was twenty, although they were not to be written for another thirty or forty years. But perhaps this is true of most writers—the emotional storage is done very early on.
For me, it's been liberating to put myself in the mind of a fictitious six year-old each day, and rediscover my own curiosity. I've been amazed at how one idea leads to others if I allow my mind to play and wander.
There is no such thing as a faithless person; we either have faith in the power of love, or faith in the power of fear. For faith is an aspect of consciousness. Have faith in love, and fear will lose its power over you. Have faith in forgiveness, and your self-hatred will fall away. Have faith in miracles, and they will come to you.
Never ask people about your work.
I don't pretend we have all the answers. But the questions are certainly worth thinking about.
Subscribe for the occasional hand-picked quote. No noise.