Part 4/13:
Buffett’s approach is rooted in principles of value investing, inspired heavily by Ben Graham, the father of modern value investing. However, Buffett and Munger have evolved this approach, recognizing the importance of good management alongside strong business fundamentals. They are willing to pay premium prices for companies that possess excellent operational qualities and management teams. This focus is evident in Berkshire’s acquisition of companies like Precision Castparts, which marked a shift toward capital-intensive, larger businesses.
One of Buffett’s most significant contributions to investing discourse has been his advocacy for passive, low-cost indexing for most individual investors.