> Warren Buffett Blog: How Warren Buffett picks investments

Wednesday, October 1, 2014

How Warren Buffett picks investments

We first have to decide whether we can sensibly estimate an earnings range for five years out, or more. If the answer is yes, we will buy the stock [or business] if it sells at a reasonable price in relation to the bottom boundary of our estimate. 

If however, we lack the ability to estimate future earnings - which is usually the case - we simply move on to other prospects.