Buffett - 92

Our equity-investing strategy remains little changed from what 
it was fifteen years ago, when we said in the 1977 annual report:  
"We select our marketable equity securities in much the way we 
would evaluate a business for acquisition in its entirety.  We want 
the business to be one (a) that we can understand; (b) with 
favorable long-term prospects; (c) operated by honest and competent 
people; and (d) available at a very attractive price."  We have 
seen cause to make only one change in this creed: Because of both 
market conditions and our size, we now substitute "an attractive 
price" for "a very attractive price."

The reason has to do with the way prices are set in each 
instance.  The secondary market, which is periodically ruled by 
mass folly, is constantly setting a "clearing" price.  No matter 
how foolish that price may be, it's what counts for the holder of a 
stock or bond who needs or wishes to sell, of whom there are always 
going to be a few at any moment.  In many instances, shares worth x
in business value have sold in the market for 1/2x or less.