Business Owner Mentality

“We don’t think of ourselves as buying and selling pieces of paper but rather investing in businesses.” Frank Martin

“That whole idea that you own a business, you know, is vital to the investment process." Warren Buffett

“Stock certificates are deeds of ownership in business enterprises and not betting slips.” J Paul Getty

“Try to establish the value of the company. Remember that a share of stock represents a part of a business and is not just a piece of paper.” Walter Schloss

"People buy a stock and they look at the price next morning and they decide to see if they are doing well or not doing well. It is crazy. They are buying a piece of the business. That is what Graham - the most fundamental part of what he taught me. You are not buying a stock, you are buying part ownership in a business. You will do well if the business does well, if you didn't pay a totally silly price. That is what it is all about." Warren Buffett

“We also truly believe that by focusing on owning businesses and not on buying stocks that go up and down gives us a very heavy advantage over others that tend to buy and sell stocks more frequently.” David Polen

“The reality is that stocks are not pieces of paper, offering returns correlated to arbitrary variables, but rather part claims on the future cash flows of businesses, whose returns are driven by changes – and anticipated changes – in these cash flows, as returns on capital respond to developing business environments, most importantly (from our perspective) those resulting from changes in the level of competition as capital enters and exits an industry.” Marathon Asset Management

“You have to think of yourself as an owner of a business, rather than an owner of a piece of paper. You own a small piece so therefore you really don’t control the business. So it’s almost self-defence to demand a large margin of safety because whatever value you perceive may not be there because you can’t control it.” Li Lu

“In the academic world, there’s been a rejection of actually thinking about stocks as businesses - essentially because there’s been an enormous amount of data about price, volume, P/E ratios and dividend yields .. Everybody loves to run a million statistical comparisons of this variable versus that variable. They’re looking for answers in a bunch of chicken entrails and ignoring the fact that when you buy a stock you buy part of a business. It is extraordinary to me. It is also quite valuable from our standpoint. If you’re in the sailing business, you’d want to set up a flat earth scholarship. There’s no question about it. It reduces competition like you can hardly believe.” Warren Buffett

“Even though it may be tempting to flatter oneself, it is the businesses we invest in that do almost all the heavy lifting in the wealth creation process. If I bring something to the investment party, and I may be stretching things a little here, it is to be more rational than other investors.” Nick Sleep

“I made the following inverse reasoning when I was young: What do those who beat the market do differently than others? I went ahead and read everything I could get my hands on about Peter Lynch, John Neff, Ben Graham, Phil Carret, John Templeton, Philip Fisher, and of course, Warren Buffett. Although Peter Lynch could have 500 stocks in his portfolio while Phil Fisher only had six, both shared the following fundamental approach: they viewed shares as fractional ownership in real businesses.” Francois Rochon

“Rather than looking at market movements or market trends, thinking and acting always as business owners rather than securities traders is the key to what we do.” David Polen

“When we buy shares of a stock, we are buying a piece of a business. So what is the business worth?” Mario Gabelli

“We like the idea and we’ve encouraged the idea of shareholders behaving like owners. I mean, shareholders have too often behaved like sheep in this country and they got shorn, in many cases.” Warren Buffett

“The number one idea is to view stock as an ownership of the business and to judge the staying quality of the business in terms of its competitive advantage." Charlie Munger

“If you understand business you understand investments.” Warren Buffett

“Stocks are ownership shares of businesses; they are not pieces of paper that bounce around on which you calculate Sharpe and Sortino ratios. They are ownership shares of businesses that we value, and either buy at a discount or short when they are overpriced.” Joel Greenblatt

“Greenlight believes corporate securities represent ownership in or a claim on a business and should not be viewed merely as speculative investments bought in the hope that another buyer will pay a higher price in the future.” David Einhorn

“In terms of perspective, we never forget stocks represent ownership interests in real underlying businesses.” Chris Davis

“Like all value investors we view a stock purchase as a fractional ownership in a business." Jake Rosser

“We take a business owner’s approach to investing and typically expect to hold our investments for many years.” Jeff Mueller

“We’re business analysts first and foremost, so valuation is usually the last thing we look at.” James Anderson

“Whenever Charlie and I buy common stocks we approach the transaction as if we were buying into a private business. We look at the economic prospects of the business, the people in charge of running it, and the price we must pay. We do not have in mind any time or price for sale. Indeed, we are willing to hold a stock indefinitely so long as we expect the business to increase in intrinsic value at a satisfactory rate. When investing, we view ourselves as business analysts — not as market analysts, not as macroeconomic analysts, and not even as security analysts.” Warren Buffett

"People would be better off if they say, ‘I bought a business today,’ not a stock today because that gives you a different perspective on it. You don’t buy or sell your business based on today’s headlines." Warren Buffett

“We consider ourselves ‘business analysts’. We think and act as if we were going to buy the entire business and hold it for many years. We believe this is a very different mindset than most others use.” Dan Davidowitz

“The foundation of our investment approach is to consider stocks as if they represent a fractional ownership in real businesses. While this may seem obvious, the vast majority of market participants do not approach stocks in this manner (unconsciously or otherwise) and the predominant emphasis is almost entirely based on the price of stocks over the short term." Francois Rochon

“When we buy a stock, we always think in terms of buying the whole enterprise because it enables us to think as businessmen rather than stock speculators.” Warren Buffett

“We try to think and act like successful business owners that truly take a multi-year approach in our thinking, portfolio management and the all-important temperament. We are not macro investors.” David Rolfe

“We view ourselves primarily as owners of businesses, and typically hold our positions for a very long time with very low turnover.” Li Lu

“Our business owner mentality causes us to think about broad macro topics, yet allows us to virtually ignore the constant babble of short term macro noise. In fact, short term macro challenges are often a boon to owners of quality companies, as marginal competitors fade away to the benefit of incumbents.” Allan Mecham

“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." Warren Buffett

“We are industrial owner types performing extensive due diligence.” Alex Roepers

“One of the keys to successful investing: focus on the companies, not on the stocks." Peter Lynch

“You have to look at stocks as parts of a business. When you acquire a stock, you should treat it as if you were to acquire the entire company. I personally think that's it's the only way to approach equity investing.” Francois Rochon

“Investors must remember – although at the peak of emotion they sometimes forget – that securities are fractional interests in, or claims on, businesses that have their own assets and cash flows. They have (usually) ongoing business value and (at leadt hypothetically) a liquidation value.” Seth Klarman

“I approach investing like I’m buying the business outright and retaining management. This mindset ties valuation to understanding and forces me to think through qualitative factors and potential threats to long-term earnings power. It also effectively winnows the field of potential investments, as I’m incapable of gaining confidence in most businesses.” Allan Mecham

“Forget the noise. Investing is about owning businesses!” Francois Rochon

"We see ourselves as part owners of the businesses we invest in." Robert Vinall

"We don’t look at indicia from stocks in general, or from P/Es, or price-sales ratios, or what other things are doing. We really just focus on businesses." Warren Buffett

“Shares represent partial ownership in a business and its management team. It’s a great first step toward more successful investing to keep that in mind, rather than thinking of our investments as symbols and numbers on a screen.” Bill Stewart

“We are investors in businesses. We are trying to identify those unique businesses with very high returns. At the end of the day, the core of our thought process says our return in an asset will approximate the return on the owner's capital the business generates." Chuck Akre

“It is critical for an investor to understand that securities aren’t what most people think they are. They aren’t pieces of paper that trade, blips on a screen up and down, ticker tapes that you follow on CNBC. Investing is buying a fractional interest in a business and buying debt claims on a business.” Seth Klarman

“ValueAct Capital approaches each investment as if it is buying the whole company." Jeffrey Ubben

“We are not speculators in the price movement of shares. We own businesses. The focus is on owning the most exceptional businesses we can find.” John Neff, Akre

"In all of our investments, we look to business performance, not market performance. If we are correct in expectations regarding the business, the market will eventually follow along." Warren Buffett

“Our aim is to keep portfolio management grounded in a mentality of long-term business ownership. We've tried to stack the odds, via our policies and procedures, to promote a business minded approach - not a fund manager approach - that allows the four most important investment principles to flourish: patience and discipline, and more patience and discipline. Our reasoning is simple; It's easy to do dumb things in investing." Allan Mecham

“Investors are going to make out a whole lot better if their whole emphasis is on owning businesses.” Lou Simpson

“Investing to me is the ownership of an interest in a business." Thomas Gayner

“A similar wisdom can be applied to market quotations. Once we understand that they can often be mirages, we can transcend them and come to see stocks simply as shares of businesses… which in the end is the one and only reality." Francois Rochon

“The search for undervalued stocks begins with the idea stocks are not just pieces of paper that are trade on the market. Every stock represents a business, which has its own intrinsic value." Jean Marie-Eveillard

“If you see stocks as blips on a ticker tape, you will be led astray. But if you regard stocks as fractional interests in businesses, you will maintain proper perspective. This necessary clarity of thought is particularly important in times of extreme market fluctuations." Seth Klarman

“Our focus remains entirely on the long-term prospects of the businesses we own. Our simple view is that we will be successful (1) if the businesses we own are successful, and (2) if we do not overpay when buying shares of these businesses." Chuck Akre

“I buy common stocks for the portfolio as if I were buying pieces of businesses.” Michael Burry

“When we buy ISCAR, or we buy Lubrizol, or whatever, we don’t run around getting a quote on it every week and say, you know, ‘Is it up or down or anything like that?’ We look to the business. We feel the same way about securities.” Charlie Munger

“In essence, we’re looking at investment opportunities as a businessman would look at them. We’re thinking about buying a business today for $100 million and figuring out whether or not we could sell it for $200 million five years later.” Bill Stewart

“We are always buying a business and not a stock. That is simple because anybody who buys a stock is really buying a share in the profits of a business. But attitudinally, if they are solely interested in buying at one price and selling it at another, they are doing something completely different than imagining that they’re buying the entire business as we do. When you imagine yourself buying the entire business even though you’re only buying 100 shares or a million shares, it doesn’t really matter, but the owner of the business would have a completely different set of attitudes and principles that he would subscribe to rather than the person who would be just buying a stock at a price which he believes is going to go up and hopefully make some money out of it and sell it. That is a rare characteristic in our business, but one which lies at the core of what we do.” David Polen

“When you invest in the way of operating an enterprise, the investment may become real. And when you just study the market and think that the stock can be separated from the business itself, you can never study the essence of investment. The essence of value investing is to combine stocks with the commercial economy it actually represents, and to study the business itself. So when you think about business as an owner and as a business perspective, then you can slowly build your knowledge honesty.” Li Lu

“De-emphasize individual quarters, recent stock performance, earnings estimates, macro forecasts, and the like. As much as possible, try to think like a private owner of a business. Think of the stock you own as you would think of real estate; it’s something you plan to own for a long time and sell reluctantly.” Chris Mayer

Further Reading:
‘The Stock ‘Business’ Market,’ Investment Masters Class. 2018.