- As wonderful as a company may be, the price paid for it is the determining factor for investment returns.
- Many companies with great brands have seen their stock prices appreciate while their fundamentals stagnate.
- Buffett has mostly bought at wonderful prices. Keep that in mind when investing.
“It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”
Many asset managers and financial advisors have Buffett’s quote on their promotional materials and web pages. However, more arguments can be made against the above statement than for it. We’ll go through some examples to help prevent you from falling into the trap of paying what the market thinks is a fair price for companies that might not be that wonderful after all. More →