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so I would like to be lucky again and and if I'm lucky then the way to do it is to play out that game and and and and do something you enjoy you know all your life and be associated with people you like I only work with people I like you know I I don't I don't if I could make a $ hundred million by buying a business with some guy that caused my stomach to churn I'd say no because I say that's just like marrying for money which probably isn't a very good idea in any circumstances but if you're already rich it's crazy right I am not going to marry for money you break one of the cardal rules of investment diversification I mean everybody's told don't put all your eggs in one basket spread them as widely as possible you actually do sometimes and put enormous numbers of eggs in one basket don't you I stick with what I know if somebody owns 50 stocks can they really like the one they rank as number 50 as well as the the one they rank as number one can they know it as well I don't think so so and knowing what you do understand and don't understand and that that is the key it's it's defining what I call your circle of competence and everybody's got a different circle of competence the important thing is not how big the circle is the important thing is staying inside the circle and if that Circle has only got 30 companies in it out of thousands on the big board as long as you know which 30 they are you're okay when you look at the future there's also the argument made uh that that this is something that goes with with your philosophy today get out of cash and get into assets cuz we don't know what's going to happen to the dollar well cash is always a bad investment I mean when people said cash is King a year ago I mean that's crazy I mean cash wasn't producing anything and it was sure to go down in value over time and you always want to be sure you have enough I mean it's like oxygen you want to be sure it's around you know but you don't need to have you don't need to have excessive abount of around anything no I much further own a good business uh than have cash uh and it is a hedge against the dollar well you can say all assets are a hedge against the dollar I mean but all you know is that the dollar is going to be worth less 10 20 30 years from now I say worth less not worthless right you want to watch that but it it will be you know and that's that's true of almost every currency that I can think of uh the question is how much uh it depreciates in value but so I want a simple business easy to understand great economics now honest en aable management and and uh then I can see about in a general way where they're going to be 10 years from now and if I can't see where they're going to be 10 years from now I don't want to buy it basically I don't want to buy any stock where if they close the New York Stock Exchange tomorrow for 5 years I won't be happy owning it I buy a farm and I don't get a Cote on it for 5 years and I'm happy if the farm does okay you know I buy an apartment house don't get a quote on it for 5 years I'm happy if the apartment Department house produces the returns that I expect but people buy a stock and they look at the price the next morning and they decide whether they're doing well or not doing well it's crazy because they're buying a piece of a business that's what greme the most fundamental part of what he taught me you know you're not buying a stock you're buying a you're buying a part ownership in a business you will do well if the business does well and if you didn't pay a totally silly price and that's what it's all about and you ought to buy businesses you understand just like if you're buying Farms you ought to buy Farms you understand it it's it's not complicated the best way to get to think about Investments is to be in a room with no one else and just think and if that doesn't work nothing else is going to work uh and the disadvantage of being in any kind of a market type environment on Wall Street would be the extreme is that you get over stimulated you think you have to do something every day think about it think what what can I do that you can't do now I get to work in a job that I love but I I've always worked in a job I love I loved it when I and I loved it just as much when I you know when it was a big deal if I made a thousand bucks and I urge you to work in jobs you love the question is about my business mistakes how much time do you have you talk about learning from mistakes I really believe it's better to learn from other people's mistakes as much as possible but uh but we don't spend any time looking back at Berkshire uh I've got a partner Charlie Munger we've been Pals for 40 years we never had an argument we disagree on things a lot but but we but we don't we don't have arguments about it and we never look back we just you know we just figure there's so much to look forward to that there's just no sense thinking about what we might it just doesn't make any difference I mean you you can only live life forward if you buy a piece of American industry and you get a cross-section you're going to do well over 10 or 20 or 30 years but you're not going to do it if you're try and dance in and out every day the Dow Jones average started the 20th century at' 66 it ended at 11,400 you'd say how could you lose money during a period like that a lot of people did because they tried to dance in and out so what you're looking for is some way to get one good idea a year you know and then and then write it to its full potential and that's very hard to do in an environment where people are shouting prices back and forth every five minutes and shoving reports under your nose and all that Wall Street makes its money on activity you make your money on inactivity question is large caps versus small caps I don't know the answer to that we we don't think uh we don't we don't care whether it's company's large cap giant Cap Middle cap small cap micro cap doesn't make any difference I mean the only question us is can we understand the business do we like the people running it and does it sell for a price that is attractive the wonderful business you know you can figure out what will happen you can't figure out when it will happen you don't want to focus too much on when you want to focus on what if you're right about what you don't have to worry about one very much learn you learn enough to do well you you've all got the IQ to do well you've all got the initiative and energy to do well or you wouldn't be you wouldn't be here uh and most of you will succeed in in in in in meeting your aspirations uh but in in determining whether you succeed uh there's more to it than intellect and energy and I'd like to talk for just a second about that
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