Course 507: Great Investors: Warren Buffett
Quality Management
In this course
1 Introduction
2 Easy to Understand Businesses
3 High ROEs
4 Consistently Strong Free Cash Flows
5 Limited Debt
6 Quality Management

Among the most notable aspects of Buffett’s stock-picking prowess is that he looks for quality in the company itself and the people running it. When Berkshire buys a business, it buys the management as well. Buffett and longtime Berkshire colleague Charlie Munger try to assess whether a company's top executives love the business or the money. They look for people who love the business first. Buffett says they don't tinker with how top brass runs the company as long as the business is successful. In light of Buffett's blatant avoidance of high-flying technology stocks, his stock-picking method is not necessarily for everyone, as he would be the first to admit. (That's just his modesty talking, because Berkshire has made millionaires out of thousands of everyday citizens.) Each investor's goals and areas of expertise are different. Those who choose to follow Buffett's school of thought, however, can rest assured that the basic principles of his style of stock-picking are based mainly on common sense: Concentrate on what you know best, and look for quality companies.

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