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Buffett focuses on businesses with a strong track record of generating profits from "summary" of Warren Buffett's Ground Rules by Jeremy C. Miller
Warren Buffett's investment philosophy revolves around seeking out businesses that have a proven track record of profitability. This means he looks for companies that consistently generate profits year after year. Buffett believes that a strong history of profitability is a good indicator of a company's ability to weather economic downturns and continue to perform well in the future. By focusing on businesses with a strong track record of generating profits, Buffett is able to avoid companies that may be more volatile or risky. He prefers to invest in companies that have a stable and reliable income stream, as this provides a level of predictability that he finds attractive. Buffett's emphasis on profitability also reflects his belief in the importance of a company's competitive advantage. A business that is consistently profitable is likely to have a strong competitive position in its industry, which can help it maintain its profitability over the long term. Buffett looks for companies with a sustainable competitive advantage, as this is a key factor in his investment decision-making process. In addition, Buffett's focus on profitability aligns with his long-term investment horizon. He is not interested in short-term gains or speculative investments. Instead, he looks for businesses that have the potential to deliver solid returns over the long term. By investing in companies with a strong track record of profitability, Buffett is able to build a portfolio of high-quality businesses that he believes will continue to perform well for years to come.
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