Charlie Munger: 'We tend to prefer the business which drowns in cash'

Warren Buffett and Charlie Munger speaking at the 2008 Berkshire Hathaway annual meeting.

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[mrpmj]

That construction business at the end of the year is just sitting in the yard like realestate (Buffet and Munger don't like this type of business) and no cash, whereas the stock market is highly liquid cash (preferable).

[ReflectionOcean]

- Understand the nature of the business before analyzing financial statements <00:22>

- Look for businesses that generate a lot of cash flow for ease of valuation <02:52>

- Prefer businesses that have consistent cash flow rather than those with fluctuating profits <03:29>

- Value businesses that provide cash flow regularly, like apartment properties <03:51>

- Avoid buying businesses solely based on good management if they are in the wrong industry <04:07>

[ReflectionOcean]

- Understand the nature of the business before relying on financial statements for investment decisions.

- Look for businesses that generate substantial cash flow.

- Prefer businesses that have consistent cash flow over those that do not.

- Evaluate businesses based on their ability to provide cash returns.

- Consider investing in businesses that offer regular income streams like apartment rentals.

- Assess businesses based on their current cash-generating capacity.

[pongfoong]

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