Buffett & Aesop

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“The oracle was Aesop and his enduring, though somewhat incomlete, investment insight was “a bird in the hand is worth two in the bush.” To flesh out this principle, you must answer only three questions. How certain are you that there are indeed birds in the bush? When will they emerge and how many will there be? What is the risk-free interest rate (which we consider to be the yield on long-term U.S. bonds)? If you can answer these three questions, you will know the maximum value of the bush – and the maximum number of the birds you now posess that should be offered for it.”

Warren Buffett

Berkshire Hathway, Annual Letter to Shareholders, 2001

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