“For the investor, a too-high purchase price for the stock of an excellent company can undo the effects of a subsequent decade of favorable business developments.”

In other words, just because a stock is cheap doesn’t mean it’s a good investment. Buffett would much rather pay a little more for a great business. However, Buffett cautions against paying too much, even for an excellent company:

• “For the investor, a too-high purchase price for the stock of an excellent company can undo the effects of a subsequent decade of favorable business developments.”