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No. of Recommendations: 6
Considering the similarity of this year's list and the last,
you may decide your management is hopelessly comatose. But we
continue to think that it is usually foolish to part with an
interest in a business that is both understandable and durably
wonderful. Business interests of that kind are simply too hard to
replace.

Interestingly, corporate managers have no trouble
understanding that point when they are focusing on a business they
operate: A parent company that owns a subsidiary with superb long-
term economics is not likely to sell that entity regardless of
price. "Why," the CEO would ask, "should I part with my crown
jewel?" Yet that same CEO, when it comes to running his personal
investment portfolio, will offhandedly - and even impetuously -
move from business to business when presented with no more than
superficial arguments by his broker for doing so. The worst of
these is perhaps, "You can't go broke taking a profit." Can you
imagine a CEO using this line to urge his board to sell a star
subsidiary? In our view, what makes sense in business also makes
sense in stocks: An investor should ordinarily hold a small piece
of an outstanding business with the same tenacity that an owner
would exhibit if he owned all of that business.


http://www.berkshirehathaway.com/letters/1993.html
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