Cash

“We favor infrequent action (and commentary), patiently waiting for exceptional opportunities”

“Regardless of yield, when investments are absent of value, cash is always a better option than permanently losing money.”

“Valuation is determined by the relation between a stock price and the present value of the free cash the business will generate over one’s forecast time horizon. The problem comes with assessing the future free cash flow. It is a highly subjective and uncertain exercise.”

“People say the market is overvalued, but if you are only looking at certain names, you will always find times when those names are undervalued. That’s what we’re waiting for.”

“Value investing is not about cheap stocks — it’s about cheap cash flows”

“Liquidity is not for comfort — it is for opportunity.”

“Our accounting is set to maximize cash flow, not reported earnings. Smoothing reported earnings just has to take a backseat.”

“Our attitude toward cash generation and asset management came out of our own thought process. It is not copied. After we acquired a number of businesses we reflected on aspects of business. Our own conclusion was that the key was cash flow.”

“Waiting patiently is an essential part of being an investor. And when you do take action, do it dynamically, forcefully.”

“No investment vehicle should offer more liquidity than is afforded by the underlying assets.”

“In the short run, narratives dominate; in the long run, cash flows do”

“Cash flow was diverging dramatically from reported earnings.”

“Earnings are an opinion. Cash is a fact.”

“When investors — individual and institutional alike — engage in far more trading –inevitably with one another — than is necessary for market efficiency and ample liquidity, they become, collectively, their own worst enemies.”

“The big money is not in the buying and selling, but in the waiting.”

“Waiting is a skill.”

“One lesson I have learned is to make fewer decisions. Sometimes the best thing to do is to do nothing. The hardest thing to do is to sit with cash. It is very boring.”

“At times of shock, converting illiquid assets to cash to build flexibility is very expensive. Finding an umbrella in a rain storm might be impossible or very costly.”

“Liquidity does not exist unless someone else is willing to give you cash in exchange for the piece of paper you want to sell.”

“Liquidity is a concern of the short-term investor and a minor matter for the long-term investor.”

“Rational investors will part with their cash only when they believe they are properly compensated for the loss of liquidity and the pain of disquietude.”

“A lot of people when they get negative on the market put 50% in cash, but unfortunately a lot of times when you get to that position it’s just about when the market’s about to rally.”

“The big profits I have made were through very long planning, waiting and watching.”

“Cash really hurts if you hold it very long in an equity market that is compounding at close to 20% per annum.”

“Growth, demographics, and liquidity drive the real estate business.”

“You have no value if you have no liquidity.”

“Holding cash in the absence of opportunity makes sense.”

“The line I draw in the sand is that if an asset has cash flow or the likelihood of cash flow in the near term and is not purely dependent on what a future buyer might pay, then it’s an investment. If an asset’s value is totally dependent on the amount a future buyer might pay, then its purchase is speculation.”

“Value to some extent is in the eye of the beholder. It is very hard to pin down what the value of a future set of cash flows from a business, be it cable TV or biotechnology, is going to be.”

“Mutual fund managers, desperate to put cash to work don’t buy what is cheap but what is working since what is cheap by definition hasn’t been working.”

“It’s liquidity that moves markets.”

“What publicly-traded companies are worth is roughly 90% dominated by the cash flows they produce over time and 10% by what the market will pay for these types of companies at any given time.”

“As an investor in businesses, which generate enormous cash flows, my single most important issue to get right is what management will do with cash flow through reinvestment. Do they care about the owner, or do they care about themselves?”

“We learned in the ’20s that markets with participants playing heavily on margins could be more dangerous than markets where people are dealing in cash.”