210 AFTERWORD
portfolios. When he added the new economic franchises to Berkshire’s
portfolio in the 1970s and 1980s, he was still thinking about stocks as
businesses and managing a focused portfolio. When Bill Miller bought
technology and Internet companies for his value fund in the 1990s and
into the f irst half of this decade, he was thinking about stocks as busi-
nesses and managing a focused portfolio.
Were the companies purchased in the 1950s different from the com-
panies in the 1980s? Yes. Were the companies purchased in the 1960s dif-
ferent from those purchased in 1990s? Of course they were. Businesses
change, industries unfold, and the competitiveness of markets allows new
economic franchises to be born while others slowly wither. Throughout
the constant evolution of markets and companies, it should be comforting
for investors to realize there is an investment process that remains robust
even against the inevitable forces of change.
At Berskhire’s 2004 annual meeting, a shareholder asked Warren
whether, looking back, he would change anything about his approach.
“If we were to do it over again, we’d do it pretty much the same way,”
he answered. “We’d read everything in sight about businesses and indus-
tries. Working with far less capital, our investment universe would be far
broader than it is currently. I would continually learn the basic principles
of sound investing which are Ben Graham’s, affected in a signif icant way
by Charlie and Phil Fisher in terms of looking at better businesses.” He
paused for a moment, then added, “ There’s nothing different, in my
view, about analyzing securities today versus f ifty years ago.”
Nor will there be anything different five, ten, or twenty years from
now. Markets change, prices change, economic environments change,
industries come and go. And smart investors change their day-to-day
behavior to adapt to the changing context. What does not change, how-
ever, are the fundamentals.
Those who follow Buffett’s way will still analyze stocks (and com-
panies) according to the same tenets; will maintain a focus portfolio;
and will ignore bumps, dips, and bruises. They believe, as I do, that the
principles that have guided Warren Buffett’s investment decisions for
some sixty years are indeed timeless, and provide a foundation of solid
investment wisdom on which all of us may build.