Smith Faculty Opinion Article	June 2008
By Dr. John A. Haslem, Professor Emeritus                                                                       E-MAIL       WEB SITE

The 30 Seconds Outlook
June 1, 2008

"The three most important lessons I learned were all from the same book, The Intelligent Investor . . .."
Warren Buffett, as reported in CNBC, May 27, 2008.

"The first is, to look at stocks as pieces of businesses, not as little items on a chart that move around, not as ticker symbols, not as something that might split next week or next month or something of the sort. But, rather, to look at the business, value the business, divide by the shares outstanding, and decide whether you really want to own a piece of that business at that price.

The second one was his commentary about your attitude toward the stock market. That it is there to serve you rather than to instruct you, and he used the famous 'Mr. Market' example of that. That attitude is fundamental to making money in stocks over time.

And the final item he talked about was margin of safety. When you buy a stock that you think is worth10 dollars, you don't pay $9.95 for it, because you can't be that precise in estimating its value. So you leave a considerable margin of safety for both what you don't understand and for the vagaries of the future. And those three ideas, which I learned when I was 19 years old, have been the bedrock of everything I've done since."

by John A. Haslem

John A. Haslem, Professor Emeritus of Finance, University of Maryland.