Warren Buffett is the CEO of Berkshire Hathaway. When Mr. Buffett became CEO in 1967 the stock was valued at $20 per share. As of Market close on April 29 2000 the price was $59,200 per share. It really doesn't take a rocket scien-tist to figure that this man knows a little something about investing in quality businesses. Berkshire Hathaway is not a conventional company. Basically it is a portfolio of businesses such as insurance powers General Re and Geico to diverse entities such as Dairy Queen and the Buffalo News. Berkshire Hathaway also makes sizable investments in well-known companies such as Coca-Cola and Gillette. I recently read an article in Fortune magazine, based on a talk that Mr. Buffett gave last September in Idaho. His philosophies are so similar to those of IFM's I thought that I would share with you exerts of the article.

Mr. Buffett stated that At Berkshire we focus almost exclusively on the valuations of individual companies, looking only to a very limited extent at the valuation of the overall market. Even then valuing the market has nothing to do with where it's going to go next week or next month or next year, a line of thought we never get into. The fact is that mar-kets behave in ways, some-times for a very long stretch, that are not linked to value. Sooner or later, though, value counts."

WOW - doesn't that sound like Maurice? I personally believe he just summarized IFM's philosophy perfectly. I have personally lis-tened to Maurice and Royal talk about the value of a company - as opposed to its' current "popularity." I find this value philosophy in the people we advise and associate with.

Mr. Buffett also expressed his views on "market psychol-ogy". "Once a bull market gets under way, and once you reach the point where everybody has made money no matter what system he or she followed, a crowd is at-tracted into the game that is responding not to interest rates and profits but simply to the fact that it seems a mistake to be out of stocks. In effect, these people, su-perimpose an I-can't-miss-the-party factor on top of the fundamental factors that drive the market. Through this daily reinforcement, they become convinced that there is a God and that He wants them to get rich. Bear in mind - this is a critical fact often ignored - that inves-tors as a whole cannot get anything out of their busi-nesses except what the businesses earn.

When I read this, I about came out of my chair from laughter. It is amazing how many people come up to me in the gym (where I go to try and get away from all this in-sanity) and want to tell me how much money they made that day. I find it humorous to note they rarely comment on down market days. And some of these people I haven't seen in weeks. I must add how-ever; that I do hope that God wants me to be rich; and I do wish that he would hurry it up a bit.

"Let me summarize: I think it's very hard to come up with a persuasive case that equities will over the next 17 years perform anything like - anything like - they've performed in the past 17. If I had to pick the most prob-able return……..it would be 6%. If you strip out the in-flation component from this nominal return (which you would need to do however inflation fluctuates), that's 4% in real terms. And if 4% is wrong, I believe that the percentage is just as likely to be less as more."

I find Mr. Buffett to be not only a very intelligent and insightful man but also a very funny one. Re-cently he held his annual share-holder meeting in the company's hometown of Omaha. A reporter asked him about his shareholders and he smiled broadly. Comparing the loyal Berkshire investor to the perfect spouse, he stated "

You want a spouse with looks? Humor? Someone who is smart?" Then he paused, smiled and revealed his key to a perfect marriage.
"You want a spouse - With low expectations."

Like I said, I think he is both insightful and really, really funny.