“I should emphasize that we do not measure the progress of our investments by what their market prices do during any given year. Rather, we evaluate their performance by the two methods we apply to the businesses we own. The first test is improvement in earnings, with our making due allowance for industry conditions. The second test, more subjective, is whether their ‘moats’—a metaphor for the superiorities they possess that make life difficult for their competitors—have widened during the year.”

in Investing, Warren E. Buffett, Writers

-Warren E. Buffett, 2007 Chairman’s Letter to the Shareholders of Berkshire Hathaway, Inc.

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