Buffett: Make Silk Purses Out Of Silk

Warren Buffett is known as a value investor, and to an extent he is. But more than that, Buffett is a “high-quality” investor, and in a recent interview with Fortune he and partner Charlie Munger talk about how Buffet’s philosophy on that changed after meeting Munger. Munger showed Buffett that buying okay businesses at bargain prices wasn’t as successful as buying great businesses, even if the price were higher. The duo also discuss how they focus on businesses with excellent management, rather than trying to change an existing manager’s approach or bring in a manager of their own. “Hiring somebody to change them is crazy,” says Buffett, who likes to say that Berkshire Hathaway “makes silk purses out of silk” — not out of sows’ ears.