CEO & company – “a terrific CEO is a huge asset for any enterprise”, but “if a business requires a superstar to produce great results, the business itself cannot be deemed great”.
Truly great businesses, earning huge returns on tangible assets, can’t reinvest internally with high ROIC for a long time.
FlightSafety is a “put-up-more-to-earn-more” type of business – good but not extraordinary.
Buffett acknowledged the mistake in investing in the shoe business, using equity.
“Overall, we are delighted by the business performance of our investees. In 2007, American Express, Coca-Cola and Procter & Gamble, three of our four largest holdings, increased per-share earnings by 12%, 14% and 14%. The fourth, Wells Fargo, had a small decline in earnings because of the popping of the real estate bubble.”
Buffett sold PetroChina in 2007.
Buffett also did well in currencies.