A little gem from Buffettized Superstocks.
Sunday, May 31, 2009I recently read through "The Cashflow Quadrant" of the "Rich Dad, Poor Dad" series. The book itself is not great, but it has a reminder of why Buffett approach to investing is preferable to Graham. Quote: "Are you a true business owner? ... Can you leave your business for a year or more and return to find it more profitable and running better than when you left it?".
This is what distinguishes Graham investing that is in the S quadrant (self employed, trading your time for money) to Buffett investing that is in B/I quadrants (business owner/investor, trading someone else's time for money). With Graham investing you have to follow the market. Not as much as traders do, but still you cannot leave for year or two and expect that things will work out. With Buffett investing, like he says, even if the market is closed for 5 years, it does not matter. The businesses owned will grow and prosper to better results through this time.
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