Security Versus Business

**angryangryhippo** Mon Apr 10, 2006 6:55 pm

Security Versus Business
I've heard Warren Buffet say that

"the security may be attractive but the business is bad"

What is the distinction between a security and a business and what does that phrase mean?

**blast_investor** Mon Apr 10, 2006 9:41 pm

In stock market terminology, security usually means stocks or bonds.

Here is detailed version of definition of security:
http://www.investopedia.com/terms/s/security.asp

**RT Wolf** Mon May 01, 2006 12:47 pm

Buffett prolly meant something like along the lines of a piece of the business is attractive, valutation-wise. However, the business is either fundamentally flawed in some way or has some characteristics that make it unattractive to him.

For example, say you could buy a crappy pair of jeans for half off. Great deal, no? That's like the price being attractive, however it's still a crappy pair of jeans you're getting. You might get a better value by buying a great pair of jeans at 25% off.

Which is pretty much Buffett's investing style. He looks for great companies at reasonable prices versus mediocre or crap companies at firesale prices (the ciggerette butt way of investing).

HTH. :)