"An investment operation is one which, upon thorough analysis, promises safety of principal and a satisfactory return. Operations not meeting these requirements are speculative."
"China is the greatest construction boom and credit bubble in recorded history. An entire nation of 1.3 billion has gone mad building, borrowing, speculating, scheming, cheating, lying and stealing. [And we thought it was just our own banks.] The source of this demented outbreak is not a flaw in Chinese culture or character – nor even the kind of raw greed and gluttony that afflicts all people in the late stages of a financial bubble. Instead, the cause is monetary madness with a red accent."
"We're delaying a normalization of rates way, way beyond what is prudent. We have a monetary policy that's now in place that was adopted for the crisis conditions of 2008 and 2009. This summer we're going to be getting the seventh year of this recovery. It's been a lousy recovery, but it's still the seventh year of a recovery. That is totally inappropriate."We're at the point of absurdity. Maybe it made sense when you had a crisis. It does not make sense now. At some point what is going to happen – and this gets to my eight or nine cataclysmic number [on a scale of 1 to 10] – is that we're going to get a series of bad numbers – a little higher inflation, higher average hourly earnings or whatever – and the market is suddenly going to say, 'Oh my God, they are so far behind the curve that they will never catch up.' And the market is going to force an adjustment on the Fed that will be wrenching."That's the cataclysmic outcome. If the Fed were to get a little bit ahead of the curve – or even maybe move a little bit closer to the curve – that's the best we can hope for – we would mitigate that. We would phase into it gradually. And that's why so much is at stake in the monetary policy that we adopt now."
- Maintain adequate "though not excessive" diversification – in other words, owning between 10 and "about 30" individual holdings;
- Ensure that each company selected "be large, prominent and conservatively financed. Indefinite as these adjectives must be, their general sense is clear;"
- "Each company should have a long record of continuous dividend payments;"
- The investor should be careful not to overpay for such companies.