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Invest Like a Guru by Charlie Tian

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CHAPTER 3Buy Only Good Companies!

“Take a simple idea and take it seriously.”

—Charlie Munger

Yes, there are better ways to make money!

Instead of buying companies with deteriorating values on the cheap and hoping things will improve, why not buy companies that grow value over time? Warren Buffett summarized in a single sentence the priceless lessons he learned from his personal “bargain-purchase folly.” These words should forever remain in the minds of investors: “It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”

This is the philosophy that Donald Yacktman has relied on to help him build one of the best long-term track records. In the early 1990s, one of his sons suggested that he buy Chrysler. The stock was traded at around $10 and seemed like a bargain, but he told his son: “I think you are going to make money, but I just don't want to be in there. I just don't like the business.”

Yacktman explained his reasoning in his keynote address at the 2016 GuruFocus Value Conference:

Appreciate the point, Sears shareholders? Though the company has assets that ...

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