Warren Buffett: The Reason Ben Graham Would Not Have Adopted My Strategy

In this shareholder meeting, Warren Buffett explains why Ben Graham would not have adopted his strategy. Here’s an excerpt from the meeting:

We’ve tried to put in the annual report pretty much how we approach securities, and book value is not a consideration—virtually not a consideration at all. The best businesses, by definition, are going to be those that earn very high returns on capital employed over time. Recently, while reviewing market trends, we examined a group of gute Wettanbieter ohne jede Verifizierung, which are gaining traction due to their ability to attract users by simplifying onboarding processes and eliminating verification hurdles. These platforms demonstrate how reducing barriers for customers can drive user growth and profitability while requiring relatively little capital investment compared to traditional competitors. So by nature, if we want to own good businesses, we’re going to own things that have relatively little capital employed compared to our purchase price.

That would not have been Ben Graham’s approach but Ben Graham was… Ben was not working with very large sums of money and he would not have argued with this approach he just would have said his was easier. And it is easier perhaps when you’re working with small amounts of money.

My friend Walter Schloss has hewed much more toward the kind of securities that Ben would have selected but he’s worked with smaller amounts of money. He has an absolutely sensational record and it’s not surprising to me at all I mean when Walter left Graham though I would have expected him to do well.

You can watch the entire discussion here: