Warren Buffett: When Is the Right Time to Buy a Business?

During this interview with Yahoo, Warren Buffett explains that he does not rely on economic forecasts for investment decisions, considering them entertainment rather than actionable insights.

He points out that economists rarely succeed in business or stock investments due to the numerous unpredictable variables in economics, unlike the consistency found in hard sciences.

Buffett emphasizes that business involves cycles of good and bad times, and successful investments focus on buying quality businesses at fair prices rather than timing purchases based on short-term economic predictions.

He compares this to owning a McDonald’s franchise or an auto dealership, where long-term fundamentals outweigh minor growth rate variations.

Here’s an excerpt from the interview:

Buffett: Well, I pay none in the sense of as a guideline to doing anything. It’s entertainment. It’s like going to a variety show or something like that.

But I just don’t know of any economist that actually has bought businesses successfully or done well in stocks. Paul Samuelson did. And as you may know, he was a big shareholder at Berkshire.

But it’s– they make guesses. And there’s so many variables. In the hard sciences, you know that if an apple falls from a tree that it isn’t going to change over the centuries because of anything or political developments or 400 other variables that go in. But when you get into economics, there’s so many variables.

And the truth is you’ve got to expect good times and bad times in business. And if you were to buy an auto dealership wherever you live locally or a McDonald’s franchise or anything like that, you wouldn’t try and time the purchase.

You’d try and make the right purchase at the right price, and you’d want to be sure you got a good business, but you wouldn’t say, I’m going to buy it because growth this year is going to be 3% instead of 2.8% or something of the sort.

You can find the entire discussion here: