In a world where you can’t predict the direction from which disruption will strike, how do you deal with the challenge of finding and owing businesses that may not be disrupted, or avoiding the ones that may be?
In 1968, Warren Buffett accepted a seat on the board of Grinnell college’s endowment fund. Joe Rosenfield, Buffett’s friend at Grinnell, was making an initial investment of $100,000 in a small semiconductor startup. He offered Buffett to participate in the deal which he refused.
That startup was Intel and the value of $100,000 invested in Intel at that time, which Rosenfield did, is worth billions of dollars today. However, Buffett doesn’t count that as a missed opportunity because one of his investing rules is understanding the business, i.e., to be able to have a pretty good idea where it will be in ten years. He didn’t understand Intel in 1968.
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