Hi Nasa, I didn't really want to go on with it and clog your...

Hi Nasa,

I didn't really want to go on with it and clog your thread up but to keep it simple, there's nothing wrong with any of the individual points you underlined but just in my opinion, the only thing that allows Buffett to say any of those things is his underlying confidence in the company's past performance. Not potential performance. Not existing performance. Historical performance! He buys companies like J&J, CC, etc when they beaten down because 1) he knows they will still be generating those great earnings in 10 years time and 2) While he waits for the recovery, those companies are paying him a dividend for his trouble.

The real litmus test is this: would Buffett buy MRF right now, assuming liquidity wasn't an issue? Absolutely not is the answer. He has avoided mining stocks throughout his life as they are so much harder to predict in terms of revenue, market cycles, future drilling success - a whole host of reasons that we would both be able to appreciate.