Tap Dancing to Work: Warren Buffett on Practically Everything, 1966–2012: A Fortune Magazine Book

So why, the last paragraph of the box sensibly asked, does a man so gloomy about stocks own so much of them? “Partly it’s habit,” Buffett answered. “Partly, it’s that stocks mean business, and owning businesses is much more interesting than owning gold or farmland. Besides, stocks are probably still the best of all the poor alternatives in an era of inflation—at least they are if you buy in at appropriate prices.

Buffett prefers to buy stocks that he will want to hold indefinitely. These days, his notion of an ideal opportunity is to buy into a business for $1 million when it is really worth $2 million and will be worth $4 million in five years. Such situations, he acknowledges, are not easy to find. “We don’t have a lot of good ideas,” he says, “and therefore we don’t do a lot of things.”

And so when Noyce left Fairchild in 1968 to form Intel,

So there we are: 12 percent before taxes and inflation; 7 percent after taxes and before inflation; and maybe zero percent after taxes and inflation. It hardly sounds like a formula that will keep all those cattle stampeding on TV.
As a common stockholder you will have more dollars, but you may have no more purchasing power. Out with Ben Franklin (“a penny saved is a penny earned”) and in with Milton Friedman (“a man might as well consume his capital as invest it”).

why, the last paragraph of the box sensibly asked, does a man so gloomy about stocks own so much of them? “Partly it’s habit,” Buffett answered. “Partly, it’s that stocks mean business, and owning businesses is much more interesting than owning gold or farmland. Besides, stocks are probably still the best of all the poor alternatives in an era of inflation—at least they are if you buy in at appropriate prices.”—CL

Buffett, 51, is one manager who goes his own way. Barely out of college, he formed a partnership with friends and relatives and raised $100,000. Adding new capital from time to time, he ultimately parlayed the fund into $100 million in the stock market. In 1965 he took over and reorganized Berkshire Hathaway, which controls, among other things, See’s Candies, Blue Chip Stamps, and a dozen insurance companies. It also owns 5% of General Foods and 13% of the Washington Post Co. Earnings are sizable—$53 million, or $51.72 a share, last year. The stock currently sells over the counter for around $500 a share. Berkshire Hathaway hasn’t paid a dividend since 1967, but net worth has grown an average of 20% a year.

A compact organization lets all of us spend our time managing the business rather than managing each other

So why, the last paragraph of the box sensibly asked, does a man so gloomy about stocks own so much of them? “Partly it’s habit,” Buffett answered. “Partly, it’s that stocks mean business, and owning businesses is much more interesting than owning gold or farmland. Besides, stocks are probably still the best of all the poor alternatives in an era of inflation—at least they are if you buy in at appropriate prices.”—CL

. So why, the last paragraph of the box sensibly asked, does a man so gloomy about stocks own so much of them? “Partly it’s habit,” Buffett answered. “Partly, it’s that stocks mean business, and owning businesses is much more interesting than owning gold or farmland. Besides, stocks are probably still the best of all the poor alternatives in an era of inflation—at least they are if you buy in at appropriate prices.”—

Through his own holdings, he still controls a substantial number of companies, including financial institutions and newspapers.