Chris Wright interviewed
Professor John Price again about his opinion on what Warren
Buffett would invest in if he was looking towards Australia.
The interview was in the article, "Slim Pickings for
Buffett" in the Smart Money section of the Australian
Financial Review 24 March, 2004.
introducing Professor Price as executive chairman
of Conscious Investing, a software developer that
filters information on Australian, Canadian and
US companies in a Warren Buffett style, the article
Buffett, the sort of things we look for are strong
and stable growth in earnings and sales and earnings,
not too much debt, high return on equity and a clear
competitive advantage," says Professor Price.
about stocks like ARB, Harvey Norman, HNG and Westfield
Holdings. It does not mean that you should buy them
at any price, but you certainly should have your
money ready. Every now and then Mr Market offers
to sell them to you at attractive prices."
"Mr Market" is a concept first expressed by Benjamin
Graham and subsequently written about at length by Buffett:
it's the idea that one should imagine market quotations
as coming from a person -- Mr Market -- who is your partner
in a private business, who every day names a price at which
he will either buy your interest or sell you his.
An emotional chap, sometimes
Mr Market will see only the good side of a business and
at other times be miserable about it, regardless of what's
really the case.
"Mr Market is there to
serve you, not to guide you," wrote Buffett in 1988.
"It is his pocketbook, not his wisdom that you will
Price adds that looking at
valuations isn't necessarily the whole story. "The
trouble with value investing is that it is so boring,"
He says. "Most people like to be diving in and out
of the market, trying to pick trends or market tops and
bottoms. With value investing, time is taken up with quietly
looking for quality companies selling at reasonable prices.
Once an investment is made, then you let the price be driven
by growth in sales and earnings."
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