Enterprising Investor Forum

Warren Buffett MBA Talk – Part 9 Thursday, October 18, 2007

Large Caps or Small Caps? Here Buffett continues to stress that the important thing is understanding the business and acquiring a certainty about the future potential. Market Cap only has an influence if you have such a large sum of money to invest that you simply can’t invest in smaller publicly traded companies.

The questions Buffett asks himself are:

1. Can I understand the business?
2. Do I like/trust the people that are running it?
3. Is it selling at an attractive price?

Then the discussion turns to real estate investments and the fact that, if you can, it is always better to invest directly rather than through an intermediary like an Investment Trust.

Continue to enjoy the talk:

Tomorrow we will take a look at the last part of this MBA Talk.