"You don't have to know a man's exact weight to know that he's fat." - Ben Graham I was reading through some notes from the 2008 Berkshire Hathaway Annual Meeting and one of the questions grabbed my attention. The question was pertaining to Warren Buffett's decision to purchase stock in PetroChina back in 2002. Basically, the questioner was surprised that Buffett made such a sizable investment after a seemingly small amount of due diligence saying "all you did was read the annual report… Wouldn't you want to do more research?" Here is the question along with Buffett's response: I think think this displays one of the keys to Buffett's success in the public equity markets that he has used throughout his career… namely, waiting to notice a huge gap between the value of a business and the price that you can buy the stock for. Also, I think it's interesting to note how he simply read the report, came up with a value, and only then checked the price. This is something that removes a lot of bias that comes when you know the price of the stock before trying to value it. Most investors will subconsciously anchor everything toward the current stock price. It would be hard to value PetroChina at $100 billion if you knew going in that the market was valuing it at $35 billion.