您现在的位置是:Exploration >>正文
【can horses eat orange peels】Warren Buffett: Know When to Cut Your Losses
Exploration5人已围观
简介Despite being one of the greatest investors of all time,Warren Buffett(Trades,Portfolio) has made hi ...
Despite being one of the greatest investors of all time,can horses eat orange peels
Warren Buffett
(
Trades
,
Portfolio
) has made his fair share of mistakes. Investors can't expect to be right 100% of the time - in fact, you'd be lucky to be right 60% of the time.
Warning! GuruFocus has detected 5 Warning Signs with BRK.A. Click here to check it out.
BRK.A 30-Year Financial Data
The intrinsic value of BRK.A
Peter Lynch Chart of BRK.A
A core aspect of value investing is finding cheap businesses that are unloved by the market, but at the same time, you have to respect the fact that you will often be wrong. The trick is to know when to throw in the towel on a business or investment. Here's what Buffett had to say on the issue in an interview with Fortune.
Bad economics trumps good management
Buffett stated that one of the biggest warning signs to an investor is when a business deteriorates even when it is run by competent people:
"When you really know you have a bad business is when you have a good manager and bad results. When you get bad results with a bad manager you still have to examine the question of whether you can get better results with a better manager. When a management for a reputation for excellence encounters a business for a reputation for bad economics, it's the reputation of the business that remains intact - and I've proved that many times!"
He then talked about a deal he did in the early 1990s buying a shoe company called Dexter Shoes. This turned out to be a disastrous business decision because even though the company was profitable and well-run before being acquired by Berkshire, it could not survive the fact that clothes manufacturing as an industry was leaving the United States. The bad macroeconomics overwhelmed the good management of the company.
By his own admission, Buffett usually cuts his losses later rather than sooner. He pointed to his experience acquiring the original Berkshire Hathaway (NYSE:BRK.A)(NYSE:BRK.B) textile business as evidence of his desire to turn around a struggling business rather than throwing in the towel early. Now, while it is certainly true that Buffett stuck with his textile businesses for longer than he probably should have, recent events have shown that he has no qualms about cutting a position that he no longer believes in.
During the most recent Berkshire annual investor conference, Buffett disclosed that he and his team had sold Berkshire's stakes in the four biggest U.S. airlines - United (NASDAQ:UAL), Delta (NYSE:DAL), Southwest (NYSE:LUV) and American (NASDAQ:AAL), due to deteriorating macroeconomics. I think this is a good example of how Buffett's folksy public attitude of "buy and hold forever" is somewhat at odds with his keen business sense and willingness to protect himself against losses by selling out early.
In fact, as I
wrote in a previous gurufocus article
, this is a trait that great investors shares with great traders.
Story continues
Disclosure: The author owns no stocks mentioned.
Read more here:
Jack Bogle: Don't Attribute Certitude to History
Bill Ackman on the Importance of Free Cash Flow
The Value Investor's Handbook: Shiller Price-Earnings Ratio
Not a Premium Member of GuruFocus? Sign up for a free 7-day trial here.
This article first appeared on
GuruFocus
.
Warning! GuruFocus has detected 5 Warning Signs with BRK.A. Click here to check it out.
BRK.A 30-Year Financial Data
The intrinsic value of BRK.A
Peter Lynch Chart of BRK.A
View comments
Tags:
相关文章
UPLCQ Deadline: Bronstein, Gewirtz & Grossman, LLC Reminds Ultra Petroleum Corp. Investors of Class Action and Lead Plaintiff Deadline: November 2, 2020
ExplorationNew York, New York--(Newsfile Corp. - November 2, 2020) - Bronstein, Gewirtz & Grossman, LLC notifie ...
阅读更多Yellowbrick Real Estate Changes Management; Announces Two Exciting Programs
ExplorationMILFORD, CT / ACCESSWIRE / February 1, 2019 /Yellowbrick (YB) Real Estate, a Connecticut based real ...
阅读更多Should Aurea SA (EPA:AURE) Focus On Improving This Fundamental Metric?
ExplorationMany investors are still learning about the various metrics that can be useful when analysing a stoc ...
阅读更多
热门文章
- StockBeat: Virus Derails Intu's Rescue Plan
- How Should Investors Think About High Yield Bond Allocations?
- Amazon's Earnings Were Strong, but Its Outlook Disappointed: 5 Metrics You Should See
- Seven New Year's Resolutions for Bitcoiners
- UK finance minister Sunak to make statement on COVID support on Thursday
- The Latest: Ariz. gov. rejects call for online learning
最新文章
-
Meal delivery firms branch out into groceries during crisis
-
At US$36.89, Is AAR Corp. (NYSE:AIR) Worth Looking At Closely?
-
Do Insiders Own Shares In MIC Electronics Limited (NSE:MIC)?
-
Boasting A 18% Return On Equity, Is Hormel Foods Corporation (NYSE:HRL) A Top Quality Stock?
-
European Stocks Seen Higher; U.S. Election in Spotlight
-
Regional observers endorse Congo's election - with caveats
友情链接
- Brexit poses risk, but German economy poised for further growth -minister
- Indonesia's GDP growth seen slowing slightly in fourth-quarter
- SoftBank Robotics Removes Strategy Executive Steve Carlin
- Value Investors Avoid JPM, Buy These 5 Bank Stocks Instead
- India lets fiscal deficit targets slip this financial year and next
- What To Know Before Buying Premier Financial Bancorp, Inc. (NASDAQ:PFBI) For Its Dividend
- European shares edge up as earnings overcome China worries
- U.S. Senate confirms two FCC commissioners, science adviser
- Does Iron Road Limited (ASX:IRD) Have A Particularly Volatile Share Price?
- If You Had Bought Hilton Grand Vacations (NYSE:HGV) Shares Three Years Ago You'd Have Made 33%