Background Image

...

A Pin Lies In Wait For Every Bubble. And When The Two Eventually Meet, A New Wave Of Investors Learns Some Very Old Lessons: First, Many In Wall Street (a Community In Which Quality Control Is Not Prized) Will Sell Investors Anything They Will Buy. Second, Speculation Is Most Dangerous When It Looks Easiest.

-Warren Buffett

...

Please Wait....
Translating....

A Pin Lies In

Warren Buffett

...

A Pin Lies In Wait For Every Bubble. And When The Two Eventually Meet, A New Wave Of Investors Learns Some Very Old Lessons: First, Many In Wall Street (a Community In Which Quality Control Is Not Prized) Will Sell Investors Anything They Will Buy. Second, Speculation Is Most Dangerous When It Looks Easiest.

Views: 64455

Topic

More From Warren Buffett

When You're Associating With The People That You Love, Doing What You Love, It Doesn't Get Any Better Than That.

Doing What You Love

Accounting Is The Language Of Business.

So Some Guy May Know How To Make Money In Cocoa Beans, But I Don't So I Just Let Him Have That. But It's Got To Be Something I Understand. It's Got To Be A Business With Fundamentally Good Economics. It's Got To Be A Management That I Like And Trust And Admire. And It's Got To Be A Price That Makes Sense.

Does The Business Have A Consistent Operating History?

Most Business Mistakes Are Irreversible Setbacks, But You Get Another Chance. There Are Two Things In Life That You Don't Get Another Chance At - Marrying The Wrong Person And What You Do With Your Children.

I Happen To Have A Talent For Allocating Capital. But My Ability To Use That Talent Is Completely Dependent On The Society I Was Born Into. If I'd Been Born Into A Tribe Of Hunters, This Talent Of Mine Would Be Pretty Worthless. I Can't Run Very Fast. I'm Not Particularly Strong. I'd Probably End Up As Some Wild Animal's Dinner.

There Are All Kinds Of Businesses That Charlie And I Don't Understand, But That Doesn't Cause Us To Stay Up At Night. It Just Means We Go On To The Next One, And That's What The Individual Investor Should Do.

This Economy Doesn't Work Well Without The Lubrication Of Credit And Trust.

Forecasts Usually Tell Us More Of The Forecaster Than Of The Forecast

In The World Of Business, The People Who Are Most Successful Are Those Who Are Doing What They Love.

Investment Success

If You Want To Shoot Rare, Fast-moving Elephants, You Should Always Carry A Loaded Gun.

Only When You Combine Sound Intellect With Emotional Discipline Do You Get Rational Behavior.

You Have Hedge Funds And People Like That Buying These Assets To Yield 15 Or 20 Percent, I Mean, That's The Buyer For These People That Are Trying To Unload Them.

In A Difficult Business, No Sooner Is One Problem Solved Than Another Surfaces - Never Is There Just One Cockroach In The Kitchen.

Just Look At That Forbes 400. Takes A Billion Three To Get On The Forbes 400 This Year. And The Aggregate Wealth Is Just Staggering. And Those People Are Paying Less Percentage Of Their Total Income To The Federal Government Than Their Receptionists Are. [...] I'll Bet A Million Dollars Against Any Member Of The Forbes 400 Who Challenges - Me That The Average For The Forbes 400 Will Be Less Than The Average Of Their Receptionists.

I Am Out Of Step With Present Conditions. When The Game Is No Longer Played Your Way, It Is Only Human To Say The New Approach Is All Wrong, Bound To Lead To Trouble, And So On. On One Point, However, I Am Clear. I Will Not Abandon A Previous Approach Whose Logic I Understand ( Although I Find It Difficult To Apply ) Even Though It May Mean Foregoing Large, And Apparently Easy, Profits To Embrace An Approach Which I Don't Fully Understand, Have Not Practiced Successfully, And Which Possibly Could Lead To Substantial Permanent Loss Of Capital.

It's The Deleveraging That's Going On Right Now That Has Caused The Credit Crisis.

House Prices Just Soared Beyond - Beyond Reason In Many Places And They Got Financed In Silly Ways, And People Lied About Loans, All Kinds Of Accesses Entered Into It. But That Is What - That Is The Single Biggest Cause Of Why We're Here.

The Fact That People Will Be Full Of Greed, Fear, Or Folly Is Predictable. The Sequence Is Not Predictable.

I Have No Idea On Timing. It’s Easier To Tell What Will Happen Than When It Will Happen. I Would Say That What Is Going On In Terms Of Trade Policy Is Going To Have Very Important Consequences.

Investment Must Be Rational; If You Can't Understand It, Don't Do It.

The Fundamental Basis Of Above-average Performance In The Long Run Is Sustainable Competitive Advantage.

There's No Use Running If You're On The Wrong Road.

Risk Is A Part Of God's Game, Alike For Men And Nations.

But 300 Million Americans, Their Lending Institutions, Their Government, Their Media, All Believed That House Prices Were Going To Go Up Consistently. And That Got Billed Into A $20 Trillion Residential Home Market. Lending Was Done Based On It, And Everybody Did A Lot Of Foolish Things.

I Have Always Cautioned Partners That I Considered Three Years A Minimum In Determining Whether We Were "performing".

I Can Do Anything I Want, Basically, As Long As It Doesn't Involve Athletic Ability, Or Something Like That.

Exercise Humility And Restraint.

Valuing A Business Is Part Art And Part Science.

A Hyperactive Stock Market Is The Pickpocket Of Enterprise.

I've Often Felt There Might Be More To Be Gained By Studying Business Failures Than Business Successes.

Business Success

The Big Question About How People Behave Is Whether They've Got An Inner Scorecard Or An Outer Scorecard. It Helps If You Can Be Satisfied With An Inner Scorecard.

The Dominant Factors Affecting Control Valuations Are Earning Power (past And Prospective) And Asset Values.

I Have No Views As To Where It Will Be, But The One Thing I Can Tell You Is It Won't Do Anything Between Now And Then Except Look At You. Whereas, You Know, Coca-cola (ko) Will Be Making Money, And I Think Wells Fargo (wfc) Will Be Making A Lot Of Money And There Will Be A Lot - And It's A Lot - It's A Lot Better To Have A Goose That Keeps Laying Eggs Than A Goose That Just Sits There And Eats Insurance And Storage And A Few Things Like That.

If You Gave Me The Choice Of Being Ceo Of General Electric Or Ibm Or General Motors, You Name It, Or Delivering Papers, I Would Deliver Papers. I Would. I Enjoyed Doing That. I Can Think About What I Want To Think. I Don't Have To Do Anything I Don't Want To Do.

I Do Not Believe In Inheriting Your Position In Society Based On Which Womb You Come From... I Think A Rich Person Should Leave His Children Enough So They Can Do Anything, But Not Enough So They Can Do Nothing.

I Think The Oversight Is Great, And I Think That Oversight Ought To Be Devoted Almost Entirely To The Question Is This Being Done At Market You Know. In Other Words, You Want To Make Sure That The Government Isn't Investing Foolishly. But You Don't Want To Care About Which Congressional Districts It Goes To Or Whether Banks Get Favored Over.

We Really Can Say No In 10 Seconds Or So To 90%+ Of All The Things That Come Along Simply Because We Have These Filters.

Do Not Take Yearly Results Too Seriously. Instead, Focus On Four Or Five-year Averages.

Never Give Up Searching For The Job That You're Passionate About.

Doing What You Love

I Learned To Go Into Business Only With People Whom I Like, Trust, And Admire.

Success In Investing Doesn’t Correlate With I.q. Once You Are Above The Level Of 25; Once You Have Ordinary Intelligence, What You Need Is The Temperament To Control The Urges That Get Other People Into Trouble In Investing.

Very Successful People Say No To Almost Everything.

Investment Success

If Past History Was All There Was To The Game, The Richest People Would Be Librarians.

Problems In A Company Are Like Cockroaches In The Kitchen. You Will Never Find Just One

The Secret Is To Find What You Love To Do.i Mean, I Tell The Students Look For The Job That You Would Take If You Didn't Need A Job. I Mean, It's That Simple. And I Was Lucky Enough To Find It Very Early In Life. And Then The Second Thing Is To Have People Around You That Make Feel Good Every Day, And Make You A Better Person Than You Otherwise Would Be.

Over The Years, Charlie [munger, Berkshire Hathaway Vice Chairman] And I Have Observed Many Accounting-based Frauds Of Staggering Size. Few Of The Perpetrators Have Been Punished; Many Have Not Even Been Censured. It Has Been Far Safer To Steal Large Sums With Pen Than Small Sums With A Gun.

Cash Never Makes Us Happy, But It's Better To Have The Money Burning A Hole In Berkshire's Pocket Than Resting Comfortably In Someone Else's.

With A Wonderful Business, You Can Figure Out What Will Happen; You Can't Figure Out When It Will Happen. You Don't Want To Focus On When, You Want To Focus On What. If You're Right About What, You Don't Have To Worry About When

The Noah Rule: Predicting Rain Doesn't Count; Building Arks Does.

Intrinsic Value Can Be Defined Simply: It Is The Discounted Value Of The Cash That Can Be Taken Out Of A Business During Its Remaining Life. The Calculation Of Intrinsic Value, Though, Is Not So Simple. As Our Definition Suggests, Intrinsic Value Is An Estimate Rather Than A Precise Figure, And It Is Additionally An Estimate That Must Be Changed If Interest Rates Move Or Forecasts Of Future Cash Flows Are Revised.

We Don't Have To Be Smarter Than The Rest. We Have To Be More Disciplined Than The Rest.

Successful Investing

We've Been In A Recession, By Any Common Sense Definition, Because If You Look At The American Public, They've Got 20 Billion - 20 Trillion, I Should Say, Worth Of Residential Homes.

You Get In A Lot Of Trouble When You Start Putting Fictitious Numbers.

We Intend To Continue Our Practice Of Working Only With People Whom We Like And Admire. This Policy Not Only Maximizes Our Chances For Good Results, It Also Ensures Us An Extraordinarily Good Time.

The Stock Market Is A No-called-strike Game. You Don’t Have To Swing At Everything – You Can Wait For Your Pitch.

The Best Investment You Can Make Is In Yourself.

Investment Success

I Could End The Deficit In 5 Minutes. You Just Pass A Law That Says That Anytime There Is A Deficit Of More Than 3% Of Gdp All Sitting Members Of Congress Are Ineligible For Reelection.

The Stock Market Is A Wonderfully Efficient Mechanism For Transferring Wealth From The Impatient To The Patient.

Like I Say, I Don't Think It'll Be Done Perfectly. Maybe We'll End Up With A Little Bit Better [economy] System.

If You're Extremely Rich, And You Have Got Children, My Theory Was, You Give Them Enough So They Can Do Anything, But Not Enough So They Can Do Nothing.

Investors Should Be Skeptical Of History-based Models. Constructed By A Nerdy-sounding Priesthood Using Esoteric Terms Such As Beta, Gamma, Sigma And The Like, These Models Tend To Look Impressive. Too Often, Though, Investors Forget To Examine The Assumptions Behind The Models. Beware Of Geeks Bearing Formulas.

The Important Thing Is To Keep Playing, To Play Against Weak Opponents And To Play For Big Stakes.

We Simply Attempt To Be Fearful When Others Are Greedy And To Be Greedy Only When Others Are Fearful.

Credit Worthiness Is Like Virginity, It Can Be Preserved But Not Restored Very Easily, So It Is Crazy To Play Around With It.

So If You Are Evaluating Others (or Yourself!) In The Investment Field, Think Out Some Standards - Apply Them - Interpret Them.

You Can Lose Leverage, And It's The Only Way A Smart Guy Can Go Broke.

The Managers At Fault Periodically Report On The Lesson They Have Learned From The Latest Disappointment. They Then Usually Seek Out Future Lessons.

In The 20th Century, The United States Endured Two World Wars And Other Traumatic And Expensive Military Conflicts; The Depression; A Dozen Or So Recessions And Financial Panics; Oil Shocks; A Flu Epidemic; And The Resignation Of A Disgraced President. Yet The Dow Rose From 66 To 11,497.

We've Got More Productive Capacity Now Than We Ever Have.

If You Can Tell Me Who Your Heroes Are, I Can Tell You How You're Going To Turn Out In Life.

Lethargy, Bordering On Sloth Should Remain The Cornerstone Of An Investment Style.

In A Bull Market, One Must Avoid The Error Of The Preening Duck That Quacks Boastfully After A Torrential Rainstorm, Thinking That Its Paddling Skills Have Caused It To Rise In The World. A Right-thinking Duck Would Instead Compare Its Position After The Downpour To That Of The Other Ducks On The Pond.

We Only Want To Link Up With People Whom We Like, Admire, And Trust. ... We Do Not Wish To Join With Managers Who Lack Admirable Qualities, No Matter How Attractive The Prospects Of Their Business. We've Never Succeeded In Making A Good Deal With A Bad Person.

I'll Take The Deal, Whatever You Want To Do.

The Latter Qualification Brings To Mind A Fellow Who Applied For A Job And Stated He Had Twenty Years Of Experience-which Was Corrected By A Former Employer To Read "one Year's Experience-twenty Times.

Managers That Always Promise To 'make The Numbers' Will At Some Point Be Tempted To Make Up The Numbers.

[the U.s. Treasury] Can Borrow Basically Unlimited Amounts. They Can Stay There For Years And Years. These Assets Will Be Worth More Money Over Time. So When Merrill Lynch Sells A Bunch Of Mortgage-related Assets At 22 Cents On The Dollar Like They Did A Month Or So Ago, The Buyer Goes - Is Going To Make Money, And He's Going To Make A Lot More Money If It Happens To Be An Institution Like The U.s. Government Which Has Very, Very Cheap Borrowing Costs.

I Tell College Students, When You Get To Be My Age You Will Be Successful If The People Who You Hope To Have Love You, Do Love You.

It's Easier To Create Money Than To Spend It.

I Just Don't See Anything Available That Gives Any Reasonable Hope Of Delivering Such A Good Year And I Have No Desire To Grope Around, Hoping To 'get Lucky' With Other People's Money. I Am Not Attuned To This Market Environment, And I Don't Want To Spoil A Decent Record By Trying To Play A Game I Don't Understand Just So I Can Go Out A Hero.

In Our View, Though, Investment Students Need Only Two Well-taught Courses-how To Value A Business, And How To Think About Market Prices. Your Goal As An Investor Should Simply Be To Purchase, At A Rational Price, A Part Interest In An Easily-understandable Business Who's Earnings Are Virtually Certain To Be Materially Higher Five, Ten And Twenty Years From Now.

The Truth Is, Everything That Has Happened In My Life... That I Thought Was A Crushing Event At The Time, Has Turned Out For The Better.

No Formula In Finance Tells You That The Moat Is 28 Feet Wide And 16 Feet Deep. That's What Drives The Academics Crazy. They Can Compute Standard Deviations And Betas, But They Can't Understand Moats.

Investing Is The Greatest Business In The World Because You Never Have To Swing. You Stand At The Plate; The Pitcher Throws You General Motors At 47! U.s. Steel At 39! And Nobody Calls A Strike On You. There's No Penalty Except Opportunity. All Day You Wait For The Pitch You Like; Then, When The Fielders Are Asleep, You Step Up And Hit It.

It's Better To Hang Out With People Better Than You. Pick Out Associates Whose Behavior Is Better Than Yours And You'll Drift In That Direction.

Intensity Is The Price Of Excellence.

Knowing The Edge Of Your Competency Is Important. If You Think You Know More Than You Do, You Will Get In Trouble.

We Have Learned To Turn Out Lots Of Goods And Services, But We Haven't Learned As Well How To Have Everybody Share In The Bounty. The Obligation Of A Society As Prosperous As Ours Is To Figure Out How Nobody Gets Left Too Far Behind.

Investment Philosophy Is The Clear Understanding That By Owning Shares Of Stocks He Owns Businesses, Not Pieces Of Paper.

Of One Thing Be Certain: If A Ceo Is Enthused About A Particularly Foolish Acquisition, Both His Internal Staff And His Outside Advisors Will Come Up With Whatever Projections Are Needed To Justify His Stance. Only In Fairy Tales Are Emperors Told That They Are Naked.

If You're An Investor, You're Looking On What The Asset Is Going To Do, If You're A Speculator, You're Commonly Focusing On What The Price Of The Object Is Going To Do, And That's Not Our Game.

I Am A Better Investor Because I Am A Businessman, And A Better Businessman Because I Am No Investor.

A Lot Of People Disagree With Me On This, I Believe In Mark To Market.

Part Of Making Good Decisions In Business Is Recognizing The Poor Decisions You've Made And Why They Were Poor. I've Made Lots Of Mistakes. I'm Going To Make More. It's The Name Of The Game. You Don't Want To Expect Perfection In Yourself. You Want To Strive To Do Your Best. It's Too Demanding To Expect Perfection In Yourself.

Every Company That Has An Economist Working For Him Has One Employee Too Many.

The Business Schools Reward Difficult Complex Behavior More Than Simple Behavior, But Simple Behavior Is More Effective.

You Can't Make A Good Deal With A Bad Person.

A Low-cost Index Fund Is The Most Sensible Equity Investment For The Great Majority Of Investors. My Mentor, Ben Graham, Took This Position Many Years Ago, And Everything I Have Seen Since Convinces Me Of Its Truth.

We Will Prosper Or Suffer In Controlled Investments In Relation To The Operating Performances Of Our Businesses - We Will Not Attempt To Profit By Playing Various Games In The Securities Markets.

Accounting Consequences Do Not Influence Our Operating Or Capital-allocation Decisions. When Acquisition Costs Are Similar, We Much Prefer To Purchase $2 Of Earnings That Is Not Reportable By Us Under Standard Accounting Principles Than To Purchase $1 Of Earnings That Is Reportable.

A Market Downturn, Doesn't Bother Us. For Us And Our Long Term Investors, It Is An Opportunity To Increase Our Ownership Of Great Companies With Great Management At Good Prices. Only For Short Term Investors And Market Timers Is A Correction Not An Opportunity.

I Have A Wonderful Family. I Have A Job That I Love And Wonderful People Who Help Me With It. It Can't Get Any Better Than That.

We Will Only Do With Your Money What We Would Do With Our Own.

Our Favorite Holding Period Is Forever.

Funny Inspirational

We Also Believe Candour Benefits Us As Managers. The Ceo Who Misleads Often In Public Eventually Misleads Himself In Private.

I Find That The Standard Of Living Does Not Go Up In Proportion With The Cost Of Living. The Trick In Life Is To Do Things That Are Fun All The Time.

Too Often, A Vast Collection Of Possessions Ends Up Possessing Its Owner. The Asset I Most Value, Aside From Health, Is Interesting, Diverse, And Long-standing Friends.

The Greatest Enemies Of The Equity Investor Are Expenses And Emotions.

I Know The Country Works Extremely Well. You Know, But When It Isn't Clogged Up.

Beware [of] The Investment Activity That Produces Applause; The Great Moves Are Usually Greeted By Yawns.

We Have A Country Where I Don't Know Whether It's A Million Households A Year Or More, But Good Form.

Is Management Candid With The Shareholders?

A Pin Lies In Wait For Every Bubble. And When The Two Eventually Meet, A New Wave Of Investors Learns Some Very Old Lessons: First, Many In Wall Street (a Community In Which Quality Control Is Not Prized) Will Sell Investors Anything They Will Buy. Second, Speculation Is Most Dangerous When It Looks Easiest.

...i Will Give You Two Pieces Of Advice. Invest As Much In Yourself As You Can; You Are Your Own Best Asset By Far. Then Follow Your Passion; You Want To Be Really Excited To Get Out Of Bed Every Morning.

Buy Companies With Strong Histories Of Profitability And With A Dominant Business Franchise.

The Smarter The Journalists Are, The Better Off Society Is. For To A Degree, People Read The Press To Inform Themselves - And The Better The Teacher, The Better The Student Body.

We Have Embraced The 21st Century By Entering Such Cutting-edge Industries As Brick, Carpet, Insulation And Paint. Try To Control Your Excitement.

It Is To Our Advantage To Have Securities Do Nothing Price-wise For Months, Or Perhaps Years, While We Are Buying Them.

You're Neither Right Nor Wrong Because Other People Agree With You. You're Right Because Your Facts Are Right And Your Reasoning Is Right - That's The Only Thing That Makes You Right. And If Your Facts And Reasoning Are Right, You Don't Have To Worry About Anybody Else.

I Think You'll Have Plenty Of Scrutiny As How The Money's Invested. I Mean, Just Like The Rfc. When The Rfc Operated, People Knew Which Institutions They Were Buying Preferred Stock In. And It Worked Very Well.

Can You Know You Can Have Institutions That Put Curbs On That In Various Ways, And Actually What The Banks, You Know, They Have Various Capital Ratios And That Sort Of Thing, But The Banks Got Around Them, I Mean, They Set Up Sieves And That Sort Of Thing Just To Get More Leverage. People Love Leverage When It's Working. I Mean, It's So Easy To Borrow Money From A Guy At X And Put It Out At X.

The Active Investors Will Have Their Returns Diminished By A Far Greater Percentage Than Will Their Inactive Brethren. That Means That The Passive Group - The "know-nothings" - Must Win.

I Have Three Boxes On My Desk: In, Out, And Too Hard.

A Bull Market Is Like Sex. It Feels Best Just Before It Ends.

That's Been Lost. It's A Huge Problem. What You Have Is You Have The Major Institutions Of The World All Wanting To Deleverage. They Want To Take Down Their Assets And Liabilities. What Seemed So Easy To Borrow Against A Year Ago Now Looks Like Rat Poison To Them. So They're Trying To Deleverage. There Is Only One Institution In The World That Can Leverage Up In A Way That's All A Countervailing Force To That, And That's The United States Treasury.

No Matter How Great The Talent Or Efforts, Some Things Just Take Time.

Investing Money

Fund Consultants Like To Require Style Boxes Such As "long-short," "macro," "international Equities." At Berkshire Our Only Style Box Is "smart."

We Enjoy The Process Far More Than The Proceeds.

More Investment Sins Are Probably Committed By Otherwise Quite Intelligent People Because Of "tax Considerations" Than From Any Other Cause. One Of My Friends-a Noted West Coast Philosopher-maintains That A Majority Of Life's Errors Are Caused By Forgetting What One Is Really Trying To Do. This Is Certainly The Case When An Emotionally Supercharged Element Like Taxes Enters The Picture (i Have Another Friend-a Noted East Coast Philosopher Who Says It Isn't The Lack Of Representation He Minds-it's The Taxation).

The American Economy Is Going To Do Fine. But It Won't Do Fine Every Year And Every Week And Every Month. I Mean, If You Don't Believe That, Forget About Buying Stocks Anyway... It's A Positive-sum Game, Long Term. And The Only Way An Investor Can Get Killed Is By High Fees Or By Trying To Outsmart The Market.

You Know, People Talk About This Being An Uncertain Time. You Know, All Time Is Uncertain. I Mean, It Was Uncertain Back In - In 2007, We Just Didn't Know It Was Uncertain. It Was - Uncertain On September 10th, 2001. It Was Uncertain On October 18th, 1987, You Just Didn't Know It.

Uncertain Times

You Don't Need To Be An Expert In Order To Achieve Satisfactory Investment Returns. But If You Aren't, You Must Recognize Your Limitations And Follow A Course Certain To Work Reasonably Well. Keep Things Simple And Don't Swing For The Fences.

When You Combine Ignorance And Leverage, You Get Some Pretty Interesting Results.

Investing Money

Investors Should Remember That Excitement And Expenses Are Their Enemies. And If They Insist On Trying To Time Their Participation In Equities, They Should Try To Be Fearful When Others Are Greedy And Greedy Only When Others Are Fearful.

Investing Money

Investing In A Market Where People Believe In Efficiency Is Like Playing Bridge With Someone Who Has Been Told It Doesn't Do Any Good To Look At The Cards.

The Stockmarket Is A Semi-psychotic Creature Given To Extremes Of Elation And Despair.

Investment Decision Should Be Made On The Basis Of The Most Probable Compounding Of After-tax Net Worth With Minimum Risk.

To Invest Successfully, You Need Not Understand Beta, Efficient Markets, Modern Portfolio Theory, Option Pricing Or Emerging Markets. You May, In Fact, Be Better Off Knowing Nothing Of These. That, Of Course, Is Not The Prevailing View At Most Business Schools, Whose Finance Curriculum Tends To Be Dominated By Such Subjects. In Our View, Though, Investment Students Need Only Two Well-taught Courses - How To Value A Business, And How To Think About Market Prices.

I'm The Luckiest Guy In The World In Terms Of What I Do For A Living. No One Can Tell Me To Do Things I Don't Believe In Or Things I Think Are Stupid.

We Are In Effect Making A - To Some Extent, Making A Choice Between Future Inflation And Getting Our - Getting Off The Floor. And We're Likely - We're Likely To Have More Inflation In The Future As A Consequence Of The Things We Do To Fight The Present Situation.

If Anything, Taxes For The Lower And Middle Class And Maybe Even The Upper-middle Class Should Even Probably Be Cut Further. But I Think That People At The High End - People Like Myself - Should Be Paying A Lot More In Taxes. We Have It Better Than We've Ever Had It.

I Like To Buy Things I Can Understand. I Do A Lot Of Research On Things.

You Can Be Sure That Over The Next 10 Years, You'll See Something That You Did Not Think Was Possible.

Failure Comes From Ego, Greed, Envy, Fear, Imitation. I Have Success Not Because I Am Smart, But Because I Am Rational.

I Wouldn’t Mind Going To Jail If I Had Three Cellmates Who Played Bridge

Take The High Road; It's Far Less Crowded.

Taking The High Road

I Have This Complicated Procedure I Go Through Every Morning, Which Is To Look In The Mirror And Decide What I'm Going To Do. And I Feel At That Point, Everybody's Had Their Say.

In Other Words, The Percentage Change In Book Value In Any Given Year Is Likely To Be Reasonably Close To That Year's Change In Intrinsic Value.

You Do Not Adequately Protect Yourself By Being Half Awake When Other Are Sleeping.

A Stock Doesn't Know That You Own It.

After 25 Years Of Buying And Supervising A Great Variety Of Businesses, Charlie [munger] And I Have Not Learned How To Solve Difficult Business Problems. What We Have Learned Is To Avoid Them. To The Extent We Have Been Successful, It Is Because We Have Concentrated On Identifying One-foot Hurdles That We Could Step Over Rather Than Because We Acquired Any Ability To Clear Seven-footers.

If You Own A Wonderful Business...the Best Thing To Do Is Keep It. All You're Going To Do Is Trade Your Wonderful Business For A Whole Bunch Of Cash, Which Isn't As Good As The Business, And You Got The Problem Of Investing In Other Businesses, And You Probably Paid A Tax In Between. So My Advice To Anybody Who Owns A Wonderful Business Is Keep It.

With Enough Insider Information And A Million Dollars, You Can Go Broke In A Year.

Traditional Wisdom Is Long On Tradition And Short On Wisdom.

The Single Most Important Decision In Evaluating A Business Is Pricing Power.

By Periodically Investing In An Index Fund, The Know-nothing Investors Can Actually Outperform Most Investment Professionals.

We're Still In A Recession. We're Not Gonna Be Out Of It For A While, But We Will Get Out.

Stocks Are The Only Thing That People Are Happy To Buy When The Price Goes Up.

I Mean, You Can Explain The Fact That These Are Depressed Prices, You Know. We Think These Assets Are Going To Be Worth A Lot More. And I Think That Case Can Be Made In Certain Situations. But I Think To Just Say, You Know, We're Going To Say A Dollar Of Cash Is Worth $2 All Of A Sudden, It Isn't Worth $2. It's Worth A Dollar Today.

Success Is Having People Love You That You Want To Have Love You.

If You Aren't Willing To Own A Stock For Ten Years, Don't Even Think About Owning It For Ten Minutes. Put Together A Portfolio Of Companies Whose Aggregate Earnings March Upward Over The Years, And So Also Will The Portfolio's Market Value.

It's Much Easier To Stay Out Of Trouble Now Than To Get Out Of Trouble Later.

You Don't Ever Ask A Barber Whether You Need A Haircut.

Long Ago, Sir Isaac Newton Gave Us Three Laws Of Motion, Which Were The Work Of Genius. But Sir Isaac's Talents Didn't Extend To Investing: He Lost A Bundle In The South Sea Bubble, Explaining Later, 'i Can Calculate The Movement Of The Stars, But Not The Madness Of Men.' If He Had Not Been Traumatized By This Loss, Sir Isaac Might Well Have Gone On To Discover The Fourth Law Of Motion: For Investors As A Whole, Returns Decrease As Motion Increases.

Your Premium Brand Had Better Be Delivering Something Special, Or It's Not Going To Get The Business.

Buy A Business, Don't Rent Stocks.

I Have An 800 Freephone Number Now That I Call If I Get The Urge To Buy An Airline Stock. I Call At Two In The Morning And I Say: "my Name Is Warren And I'm An Aeroholic." And Then They Talk Me Down.

What Motivates Most Gold Purchasers Is Their Belief That The Ranks Of The Fearful Will Grow. During The Past Decade That Belief Has Proved Correct. Beyond That, The Rising Price Has On Its Own Generated Additional Buying Enthusiasm, Attracting Purchasers Who See The Rise As Validating An Investment Thesis. As 'bandwagon' Investors Join Any Party, They Create Their Own Truth - For A While.

If You Invested In A Very Low Cost Index Fund - Where You Don't Put The Money In At One Time, But Average In Over 10 Years -you'll Do Better Than 90% Of People Who Start Investing At The Same Time.

In Economics, You Always Want To Ask 'and Then What?'

I Think The Most Important Factor In Getting Out Of The Recession Actually Is Just The Regenerative Capacity Of - Of American Capitalism.

When We Really Sit Back With A Smile On Our Face Is When We Run Into A Situation We Can Understand, Where The Facts Are Ascertainable And Clear, And The Course Of Action Obvious.

I Get To Do What I Like To Do Every Single Day Of The Year.

Time Is The Friend Of The Wonderful Company, The Enemy Of The Mediocre.

Asset-heavy Businesses Generally Earn Low Rates Of Return - Rates That Often Barely Provide Enough Capital To Fund The Inflationary Needs Of The Existing Business, With Nothing Left Over For Real Growth, For Distribution To Owners, Or For Acquisition Of New Businesses

We've Got All The Ingredients For A Sensational Future.

The Best Thing I Did Was Choose The Right Heroes.

When Forced To Choose, I Will Not Trade Even A Night's Sleep For The Chance Of Extra Profits.

Gold Has Two Significant Shortcomings, Being Neither Of Much Use Nor Procreative.

Risk Comes From Not Knowing What You're Doing.

If You Gave Me $100 Billion And Said Take Away The Soft Drink Leadership Of Coca-cola In The World, I'd Give It Back To You And Say It Can't Be Done.

I Think I Could Make You Fifty Percent A Year On One Million Dollars. No, I Know I Could. I Guarantee That.

Guarantees That

Well, One Time Some Attractive Woman Sat Next To Charlie And Asked Him What He Owed His Success To, And, Unfortunately, She Insisted On A One Word Answer. He Had A Speech Prepared That Would Have Gone On For Several Hours. But When Forced To Boil It Down To One Word, He Said That Was "rational". You Know, He Comes Equipped For Rationality, And He Applies It In Business. He Doesn't Always Apply It Elsewhere, But He Applies It In Business And That Has Made Him A Huge Business Success.

Business Success

We've Seen What Can Be Accomplished When We Use 50% Of Our Human Capacity. If You Visualize What 100% Can Do, You'll Join Me As An Unbridled Optimist About America's Future.

I Have Got This Letter Which Actually Goes Out The Day After I Die. It Has Already Been Written. And It Says That: "yesterday I Died". And Then It Says: "that's Bad News For Me, But It's Not Bad News For You, The Shareholders Of Berkshire". And Then I Go On And Explain What Is Going To Happen. I Know That Is One Time When They Will Be Really Interested In Hearing From Me.

Charlie And I Decided Long Ago That In An Investment Lifetime, It's Too Hard To Make Hundreds Of Smart Decisions. That Judgment Became Ever More Compelling As Berkshire's Capital Mushroomed And The Universe Of Investments That Could Significantly Affect Our Results Shrank Dramatically. Therefore, We Adopted A Strategy That Required Our Being Smart And Not Too Smart At That, Only A Very Few Times. Indeed, We Now Settle For One Good Idea A Year.

Buy A Cross Section Of American Industry, And If A Cross Section Of American Industry Doesn't Work, Certainly Trying To Pick The Little Beauties Here And There Isn't Going To Work Either.

Well, I Think The Biggest Mistake Is Not Learning The Habits Of Saving Properly Early. Because Saving Is A Habit. And Then, Trying To Get Rich Quick. It's Pretty Easy To Get Well-to-do Slowly. But It's Not Easy To Get Rich Quick.

We Can Afford To Lose Money - Even A Lot Of Money. But We Can't Afford To Lose Reputation - Even A Shred Of Reputation.

When 40 Billion Of Treasury Bills Are Sold Like, Seven Day Treasury Bills, At A Yield Of 1/20th Of One Percent, That Means The Whole Country Is Basically At The Point Virtually, Or A Lot Of The Country Is At The Point Of Putting The Money Under The Mattress.

The Typical Large Company Has A Compensation Committee, They Don't Look For Dobermans On That Committee, They Look For Chihuahuas.

What Could Be More Advantageous In An Intellectual Contest - Whether It Be Chess, Bridge, Or Stock Selection - Than To Have Opponents Who Have Been Taught That Thinking Is A Waste Of Energy?

Investors... Can't Pick Stocks That Are Better Than Average. Stocks Are A Good Thing To Own Over Time. There's Only Two Things You Can Do Wrong: You Can Buy The Wrong Ones, And You Can Buy Or Sell Them At The Wrong Time. And The Truth Is You Never Need To Sell Them.

I Prefer Liquor Store Robbers With Hungry Kids To Companies That Locate Offshore To Avoid U.s. Taxes.

When Asked How He Became So Successful In Investing, Buffett Answered: 'we Read Hundreds And Hundreds Of Annual Reports Every Year.

It Makes No Difference To A Widow With Her Savings In A 5 Percent Passbook Account Whether She Pays 100 Percent Income Tax On Her Interest Income During A Period Of Zero Inflation Or Pays No Income Tax During Years Of 5 Percent Inflation. Either Way, She Is 'taxed' In A Manner That Leaves Her No Real Income Whatsoever. Any Money She Spends Comes Right Out Of Capital. She Would Find Outrageous A 100 Percent Income Tax But Doesn't Seem To Notice That 5 Percent Inflation Is The Economic Equivalent.

I Wouldn't Want To Manufacture Cigarettes. But If I Owned - We Do Own Costco. Do They Sell Them? Yes. So I Don't Have A Problem Owning Stock In That. But I Just Wouldn't Want To - I Wouldn't Want To Do It Myself. I Basically Think, If Anything Is Sufficiently Antisocial, Society Should Do Something About It. But That's A Separate Question. But - And I Don't Think There's Any Company That I Have Seen That's 100 Percent Pure.

That Would Be Nice If [people] Stuck [treasury Bills] All Under A Mattress, But They Got To Buy Something With Them. Sometimes They Buy A Treasury Note, Sometimes They Set Up Sovereign Wealth Funds. They Can Do All Kinds Of Things. They Can Buy Our Companies Here. As Long As We Consume More Than We Produce, And We Trade Away Little Pieces Of The Country Daily, They're Going To Own Something. Now, They Can't Run From American Assets. I Mean Every Day The Rest Of The World Is Going To Have About Two Billion More Of American Assets Than We Have, As Long As They Sell Us These Goods.

When It's Raining Gold, Reach For A Bucket, Not A Thimble.

Trending Author

Jackie Joyner-Kersee

Category