Warren Buffett has shared a lot of investing advice over the years, but one quote always sticks with me:
It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.
I think this captures something simple but powerful.
It shifts the focus away from trying to find the cheapest ASX share and toward finding the right business.
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Quality comes first
It is easy to get drawn to shares that have fallen a long way or trade on ultra-low PE ratios.
Sometimes that works out. Other times, there is a reason the share price has dropped and it never really recovers.
Warren Buffett's approach is a reminder to start with the business itself.
I try to focus on ASX shares that have strong positions, consistent demand, and the ability to keep performing over time. If those pieces are in place, I am much more comfortable investing, even if the price is not at its lowest point.
Price still matters, just not in the same way
That quote does not ignore valuation. It just puts it in the right place.
I still want to buy at a reasonable price. A pullback can make a high-quality ASX share more attractive, and that is often where opportunities come from.
For example, when a company like CSL Ltd (ASX: CSL) trades well below its previous highs, I think about whether the underlying business has changed or whether the price has simply moved.
That is where this rule becomes useful.
The businesses I keep coming back to
On the ASX, I find myself drawn to companies that can keep delivering over time.
Businesses like Wesfarmers Ltd (ASX: WES) have shown they can grow across different cycles, while others like Transurban Group (ASX: TCL) benefit from steady demand and long-term assets.
They are very different, but they share one thing. They are built to last.
Why I keep using this rule
This way of thinking helps filter out a lot of noise.
Instead of asking which share is cheapest or which one has fallen the most, I focus on which businesses I would be comfortable holding for years.
That tends to lead me toward the same types of ASX shares again and again.
Foolish takeaway
The Warren Buffett rule I keep coming back to is focusing on quality first, then price.
Finding a strong business and buying it at a reasonable level is not complicated, but it works.
It keeps the process clear and helps me stay focused on what actually matters when investing in ASX shares.
