Warren Buffett: Don’t Wait for a Price Drop to Buy a Great Company

During the 1996 Berkshire Hathaway Annual Meeting, Warren Buffett discussed the value of investing in truly great companies that will remain strong for decades.

He advises against trying to time the market or waiting for a financial crisis to buy stocks at a discount, as great companies are rare and difficult to find. Instead, Buffett suggests buying and holding onto these companies long-term, with the confidence that they will thrive over time.

Here’s an excerpt from the meeting:

Buffett: Yeah. Well, I won’t comment on the three companies that you’ve named. But in general terms, unless you find the prices of a great company really offensive, if you feel you’ve identified it — And by definition, a great company is one that’s going to remain great for 30 years.

If it’s going to be a great company for three years, you know, it ain’t a great company. I mean, it — (Laughter) So, you really want to go along with the idea of something that, if you were going to take a trip for 20 years, you wouldn’t feel bad leaving the money in with no orders with your broker and no power of attorney or anything, and you just go on the trip.

And you know you come back, and it’s going to be a terribly strong company. I think it’s better just to own them. I mean, you know, we could attempt to buy and sell some of the things that we own that we think are fine businesses. But they’re too hard to find.

I mean, we found See’s Candy in 1972, or we find, here and there, we get the opportunity to do something. But they’re too hard to find. So, to sit there and hope that you buy them in the throes of some panic, you know, that you sort of take the attitude of a mortician, you know, waiting for a flu epidemic or something.

I mean — (laughter) — it — I’m not sure that will be a great technique. I mean, it may be great if you inherit. You know, Paul Getty inherited the money at the bottom, in ’32. I mean, he didn’t inherit it exactly. He talked his mother out of it. But — (laughter) — it’s true, actually.

You can find the entire discussion here: