"It's far better to buy a wonderful company at a fair price than a fair company at a wonderful Price."
- Warren Buffett
In other words, it is better to pay fair value for a solid company than pay a bargain price for a mediocre company.
Is this true? What if the mediocre company owned a subsidiary that was wonderful and that you could buy the package of companies at a bargain price, strip out the good division an and being a passive shareholder.
On the other hand, the recent purchase of Heinz contemplates taking the company private and re-engineering the package to emphasize some of the "gems" within the package. For instance, building up the subsidiaries doing business in China and India.
