Lessons From Warren Buffett

Lessons From Warren Buffett: Don’t Let Investment Bankers Tell You What Company to Acquire

Warren Buffett’s approach to acquiring companies involves relying on his own research and analysis rather than depending on the opinion of investment bankers. He believes that investment bankers may not always provide trustworthy advice, as they may be incentivized to prioritize their own interests over those of the acquiring company.

“The idea of asking investment bankers or somebody to evaluate the businesses you’re going to buy, I mean, that strikes us as idiocy,” Buffett said at the 2000 Berkshire Hathaway annual meeting. “If you don’t know enough about a business to decide whether to buy it yourself, you’d better forget it. It does not make sense. You bring in somebody who’s going to get a very large check if you buy it, and a very small check if you don’t, that displays a faith in human nature that would strain Charlie and me.”

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© 2023 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

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