Know what you own
Understanding a company means looking at how it makes money, uses its resources, and competes with other businesses.
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Long-term investing
Invest in businesses.
Think long term.
Long-term investing starts with understanding the businesses behind your investments. Well-run companies, strong finances, and a reasonable price deserve a closer look—with your goals and the risks always in view.
Why the long term matters
Look beyond the daily headlines.
Stock prices can respond quickly to the news. The focus stays on the business itself: demand for its products, the strength of its finances, and its ability to compete over time.
The aim is to invest at a reasonable price and give the business time to grow. Regular reviews help determine whether the reasons for owning it still hold as conditions change.
The investment process
Understand the business.
Pay attention to price.
Consider the price
Even a good company can be too expensive. A sound investment starts with a price that makes sense for what the business is worth.
Give it time
Businesses need time to grow and work through challenges. A long-term view makes room for that growth, with continued attention to the company’s progress and risks.
Business qualities
What makes a business worth a closer look?
Durability
Products or services people continue to need, and a reason for customers to choose the business.
Financial strength
Reliable cash flow, manageable debt, and resources to get through difficult periods.
Leadership
Leaders who use the company’s money carefully and consider the long-term interests of shareholders.
Valuation
A price that reflects realistic expectations and allows for uncertainty.
On quality and value
It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.
Warren Buffett
Long-term investing does not eliminate risk. Investment values can fluctuate, and past performance does not guarantee future results.
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