Original link: https://ljf.com/2023/08/16/1297/
1991 Speech at the Shareholders’ Meeting of Siko Finance
More money and less opportunity is better than less money and more opportunity.
A company is living a good life, very comfortable and stable, and leverage is pure nonsense. It’s not worth the extra money.
I strongly disagree with early consumption.
I think that for people who fall into the trap of consumer credit, they should not be allowed to drive them to a dead end by lending institutions, but should be given a chance to file for bankruptcy and start over.
Our corporate bankruptcy system is too inefficient, expensive and time-consuming, resulting in a lot of waste.
I’ve never heard of the fact that when a bank is purchased, all the loans on the account are checked. Can’t find it at all. Our approach is to judge loan quality indirectly. We mainly observe the management’s behavior, look at their cultural background, and look for clues from what they have done in the past.
Neither Siko nor Berkshire ever make any macro forecasts. We don’t know how bad California’s housing crisis will be this time around, or how much the banks will be hit. We do not have the ability to make macro forecasts.
How to achieve the return on net assets is not important, the key is to be able to obtain a higher return on net assets for a long time.
What Graham said about buying stocks is buying companies, looking at intrinsic value rather than price fluctuations, these will never be outdated.
What Graham didn’t understand was that some companies are worth holding for a long time and can obtain good returns, even if the purchase price is several times the net assets. Coca-Cola is such a stock, its current price is much higher than its net worth.
This article is transferred from: https://ljf.com/2023/08/16/1297/
This site is only for collection, and the copyright belongs to the original author.