The Value Of Being Able To Take Risks

One of the advantages of money that people fail to appreciate is the value of being able to take risks.  Because risk and reward are typically intertwined, the rich do get richer. This year’s March Madness tournament provides a particularly striking example.  Quicken Loans and Yahoo Sports are running a “billion dollar bracket“: Pick the … Continue reading The Value Of Being Able To Take Risks

Warren Buffett and the Circle of Competence

Continuing my Sunday afternoon Buffettology, I want to highlight one of Warren Buffett’s key principles, “The Circle of Competence”. What Buffett means is that the size of the circle and the area it encloses is less important to success than understanding the clear boundaries of that circle.  As long as you know the area … Continue reading Warren Buffett and the Circle of Competence

Warren Buffett’s Secret of Success

Warren Buffett’s biography, “The Snowball“, is a remarkable book that covers both his incredible career as an investor and businessman, as well as the details of his unusual personal life.  Buffett gave his biographer Alice Schroeder full access, with the proviso that she not be afraid to be hard on him.  Her portrait of Buffett … Continue reading Warren Buffett’s Secret of Success

Don’t “manage earnings.” Instead, “build value.”

I continue to get great insights out of the life of Warren Buffett. One of Buffett’s famous principles is the story of Mr. Market.  Here’s an excerpt from his 1987 Berkshire Hathaway shareholder letter: “Without fail, Mr. Market appears daily and names a price at which he will either buy your interest or sell … Continue reading Don’t “manage earnings.” Instead, “build value.”