Category: Excerpts

Lou Simpson was one of the greatest investors of all time.

His wisdom condensed in Six Words- Buy Cheap, Hold Expensive, Sell Rarely

Buy Cheap

We try to be disciplined in the price we pay for ownership even in a demonstrably superior business. Even the world’s greatest business is not a good investment if the price is too high.

Hold Expensive

This is often the most difficult, because you’re investing in something you wouldn’t buy at current prices, but you don’t want to sell because it’s a really good business and you think it’s ahead of itself on a price basis. It might be worth holding on to it for a while.

Sell Rarely

If I’ve made one mistake in the course of managing investments it was selling really good companies too soon.

Source: 2021 Berkshire Hathaway Annual Meeting Transcript

Becky: (03:50:49)
Ajit, your question from this gentlemen, suppose the hypothetical situation arises where Warren Buffett calls you on the phone to tell you that Elon Musk has contacted him about writing an insurance policy on his proposed mission to and subsequent colonization of Mars. Specifically, he wants insurance to insure a SpaceX heavy rocket capsule, payload, and human capital. Would you underwrite any portion of a venture like that?

Ajit Jain: (03:51:16)
This is an easy one. No, thank you. I’ll pass.

Warren Buffett: (03:51:20)
Well, I would say it would depend on the premium, and I would say that I would probably have a somewhat different rate if Elon was on board or not on board. I mean, it makes a difference, I mean. If somebody is asking you to insure something, that’s called getting skin in the game.

Ajit Jain: (03:51:46)
In general, I would be very concerned about writing an insurance policy where Elon Musk is on the other side.