Postcards: How Buffett learned to buy great businesses

Postcards How the power players do it
How Buffett learned to buy great businesses November 8, 2013. 1:19 PM ET Even Warren Buffett wasn't the smartest guy when he started investing. Who taught him to hunt for quality? When Warren Buffett began investing more than 60 years ago, he tended to buy mediocre businesses at mediocre prices. Then someone gave the Berkshire Hathaway (BRKA) CEO the best advice he says he ever got. That is: Pay up for really good businesses like American Express (AXP) and See's Candies. Buffett's adviser: Charlie Munger, who is now 89 years old and Berkshire Hathaway's vice-chairman. Munger convinced Buffett, 83, to learn to "make silk purses out of silk." And that philosophy has turned out to be a key to the two men's extraordinary investing success. "Forget the sow's ears," says Buffett, who applies the "silk purse" credo to all his relationships in life. Filed under: Postcards See more Postcards	About This Author Patricia Sellers Editor at Large, Fortune Pattie Sellers has written some of Fortune's most talked-about cover stories, including "Oprah's Next Act," "Can Meg Whitman Save California?" "The $100 Billion Woman" (Melinda Gates), "MySpace Cowboys," Martha Stewart ("I cannot be destroyed"), Ted Turner ("Gone with the Wind") and Oprah Winfrey ("Oprah Inc."). Since its launch in 1998, Pattie has helped oversee Fortune's "Most Powerful Women" cover package. A specialist at dissecting larger-than-life personalities, she has also profiled former U.S. Treasury Secretary Hank Paulson, Morgan Stanley chairman John Mack, and countless CEOs. Pattie co-chairs the annual Fortune Most Powerful Women Summit, the preeminent gathering of women leaders in business, philanthropy, government, academia, and the arts. She started at Fortune in 1984, covering the big brand companies. In Pattie's blog, Postcards, she provides insight into the lives of super-achievers through commentary, career advice, and Guest Posts by CEOs and other leaders. Email Pattie Sellers | Welcome to Postcards. Subscribe: RSS feed | email newsletter Sign up News Breaking Financial News Be the first to know when there is breaking financial news with timely alerts delivered straight to your inbox. Markets Captain's Blog FORTUNE managing editor Andy Serwer keeps tabs on Wall Street. Market Briefing A complete roundup of each day's trading activity. The Term Sheet Receive Fortune's newsletter on all the deals that matter, from Wall Street to Sand Hill Road. Technology Apple 2.0 Fortune's Philip Elmer-DeWitt brings you Mac news from outside the reality distortion field. Big Tech Fortune's Michal Lev-Ram covers the digital giants. Careers Ask Annie Mondays Anne Fisher answers career-related questions and offers helpful advice for business professionals. Postcards Fortune editor at large Pattie Sellers shares fascinating, fun and valuable insights into people who sit at the pinnacle of power. Personal Finance The Help Desk Tips for saving and spending smarter. Ask the Expert Our readers toughest market questions answered every Friday.
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