Context

Written in Buffett's 1989 annual letter to Berkshire Hathaway shareholders, in a section reviewing investment mistakes from the company's first twenty-five years. Buffett recounts purchasing Hochschild Kohn, a Baltimore department store acquired at a discount, and learning that business quality matters more than purchase price. The line encapsulates his shift away from Ben Graham's "cigar butt" bargain-hunting approach toward seeking excellent businesses at reasonable valuations.