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As I Have Mentioned Before, We Cannot Make The Same Sort Of Money Out Of Permanent Ownership Of Controlled Businesses That Can Be Made From Buying And Reselling Such Businesses, Or From Skilled Investment In Marketable Securities. Nevertheless, They Offer A Pleasant Long Term Form Of Activity (when Conducted In Conjunction With High Grade, Able People) At Satisfactory Rates Of Return.

-Warren Buffett

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As I Have Mentioned

Warren Buffett

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As I Have Mentioned Before, We Cannot Make The Same Sort Of Money Out Of Permanent Ownership Of Controlled Businesses That Can Be Made From Buying And Reselling Such Businesses, Or From Skilled Investment In Marketable Securities. Nevertheless, They Offer A Pleasant Long Term Form Of Activity (when Conducted In Conjunction With High Grade, Able People) At Satisfactory Rates Of Return.

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When The President Of The United States Goes Out At, You Know, 8:00 O'clock In The Morning And Then His Own Party Votes Gets Him 2 To 1 In The House, You Know That Somehow A Message Isn't Getting Out. It Takes Real Leadership.

It's Class Warfare, My Class Is Winning, But They Shouldn't Be.

The Dumbest Reason In The World To Buy A Stock Is Because It's Going Up.

I Have A House That I Bought 55 Years Ago. It's Warm In The Winter; It's Cool In The Summer. It Has Everything I Wanted, Plus It Has All Kinds Of Good Memories. Like My Kids, I Have Good Thoughts About That. I Can't Imagine Living Any Better.

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.

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I'm Sitting With Six And A Half Billion Dollars We're Going To Use To Close The Mars-wrigley Deal On October 6. I've Got To Hand Over That Six And A Half Billion On October 6. Now, I Have To Be Very Careful About Who I Leave It In Between Now And Then, Because They're Expecting That He Show Up.

You Have To Be Able To Communicate In Life And Probably Schools Underemphasize That. If You Can't Talk To People Or Write, You're Giving Up Your Potential.

There Is No Perfect Mathematical Formula For Pricing A Business.

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.

We're Paying Maybe 25 Percent Of The Income Tax, But The Payroll Tax Is Over A Third Of The Receipts Of The Federal Government. And They Don't Take That From Me On Capital Gains. They Don't Take That From Me On Dividends.

I Am Not Worried About The Country. I'm Just Worried About Anything That Gums Up The Potential Of The Country. And Right Now, It's Pretty Gummed Up.

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

Business Success

Our System Works. Over Time, People Will Live Better And Better. We Have A System That Unleashes Human Potential, And Now China Has A System That Unleashes Human Potential. We Will Have Interruptions. We Overshoot And Undershoot Sometimes, But Your Kids And Grandkids Will Live Better Than You. Over Time, We Move Ahead At A Pretty Damn Rapid Rate.

We Like To Buy Businesses, But We Don't Like To Sell Them.

I Don't Want To Hold Out False Hopes That The - By Some Magic Moment, That Things Will Turn Around In A Couple Months Because They Wouldn't, Charlie. I Mean, And It's A Big Mistake To Try And Mislead People.

A Public-opinion Poll Is No Substitute For Thought.

As One Of My Older Friends Says, "nostalgia Just Isn't What It Used To Be." Let's Take A Stab At It, Anyway.

I Asked Him What He Wanted To Do For His Career, And He Replied That He Wanted To Go Into A Particular Field, But Thought He Should Work For Mckinsey For A Few Years First To Add To His Resume. To Me That's Like Saving Sex For Your Old Age. It Makes No Sense.

In My Opinion, The Entire Field Of Investment Management, Involving Hundreds Of Billions Of Dollars, Would Be More Satisfactorily Conducted If Everyone Had A Good Yardstick For Measurement Of Ability And Sensibly Applied It.

We Believe That According The Name 'investors' To Institutions That Trade Actively Is Like Calling Someone Who Repeatedly Engages In One-night Stands A 'romantic.'

If You Hit A Hole In One Every Hole, You Wouldn’t Play Golf For Very Long.

You Don't Have To Be A Genius To Invest Well

I View Derivatives As Time Bombs, Both For The Parties That Deal In Them And The Economic System.

Investors Should Remember That Their Scorecard Is Not Computed Using Olympic-diving Methods: Degree-of-difficulty Doesn't Count. If You Are Right About A Business Whose Value Is Largely Dependent On A Single Key Factor That Is Both Easy To Understand And Enduring, The Payoff Is The Same As If You Had Correctly Analyzed An Investment Alternative Characterized By Many Constantly Shifting And Complex Variables.

There Are Certain Things That Cannot Be Adequately Explained To A Virgin Either By Words Or Pictures.

The [stock] Market,like The Lord, Helps Those Who Help Themselves. But, Unlike The Lord, The Market Does Not Forgive Those Who Know Not What They Do.

The Fed Is The Greatest Hedge Fund In History.

Never Depend On A Single Source Of Income.

Stop Trying To Predict The Direction Of The Stock Market, The Economy Or Elections.

One Observer Commenting On Security Analysts Over Forty Stated: "they Know Too Many Things That Are No Longer True." As Long As I Am "on Stage", Publishing A Regular Record And Assuming Responsibility For Management Of What Amounts To Virtually 100% Of The Net Worth Of Many Partners, I Will Never Be Able To Put Sustained Effort Into Any Non-bpl Activity. If I Am Going To Participate Publicly. I Can't Help Being Competitive. I Know I Don't Want To Be Totally Occupied With Out-pacing An Investment Rabbit All My Life. The Only Way To Slow Down Is To Stop.

Stocks Of Companies Selling Commodity-like Products Should Come With A Warning Label: "competition May Prove Hazardous To Human Wealth".

I've Never Been Very Fully Employed Either But Just Think Of What It's Like, You Know, To Go Home With A Mortgage Payment You Know And Kids And Everything Else. My Dad Had That Happen To Him In The Early '30s.

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

If You Don’t Feel Comfortable Making A Rough Estimate Of The Asset’s Future Earnings, Just Forget It And Move On. No One Has The Ability To Evaluate Every Investment Possibility. But Omniscience Isn’t Necessary; You Only Need To Understand The Actions You Undertake.

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Confidence Is Key

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

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Basically, The Single-most Important Decision In Evaluating A Business Is Pricing Power.

Important Decisions

You Have No Ability, If You're A Financial Institution And You're Threatened With Criminal Prosecution, You Have No Ability To Negotiate.

We're Perfectly Willing To Trade Away A Big Payoff For A Certain Payoff.

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.

I Think The Congress Will Do The Right Thing. I Think That They've - You Know, They Got Into Certain Arguments And They Start Worrying About Assessing Blame, And There Is A Little Demagoguery, But In The End, Something This Important, They'll Do The Right Thing. So This Really Is An Economic Pearl Harbor. That Sounds Melodramatic, But I've Never Used That Phrase Before. And This Really Is One.

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Observing That The Market Was Frequently Efficient, Emt Adherents Went On To Conclude Incorrectly That It Was Always Efficient. The Difference Between These Propositions Is Night And Day.

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Continually Challenge And Be Willing To Amend Your Best Loved Ideas.

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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.

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I’ve Worked In An Economy That Rewards Someone Who Saves The Lives Of Others On A Battlefield With A Medal, Rewards A Great Teacher With Thank-you Notes From Parents, But Rewards Those Who Can Detect The Mispricing Of Securities With Sums Reaching Into The Billions.

Just Imagine Living On 21,000 A Year. I Mean You Have 20 Percent Of The Population Doing That. So You Don't Have To Worry About Guys Like Me.

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Today People Who Hold Cash Equivalents Feel Comfortable. They Shouldn't. They Have Opted For A Terrible Long-term Asset, One That Pays Virtually Nothing And Is Certain To Depreciate In Value.

Buy Stocks Like You Buy Your Groceries, Not Like You Buy Your Perfume.

My Favorite Time Frame For Holding A Stock Is Forever.

Money To Some Extent Sometimes Let You Be In More Interesting Environments. But It Can't Change How Many People Love You Or How Healthy You Are.

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People Should Always Know Better.

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Benign Neglect, Bordering On Sloth, Remains The Hallmark Of Our Investment Process.

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

If You’re In The Luckiest One Per Cent Of Humanity, You Owe It To The Rest Of Humanity To Think About The Other 99 Per Cent.

This Country Is Going - Be Living Better Ten Years From Now Than It Is Now. It Will Be Living Better In 20 Years From Now Than Ten Years From Now. The Ingredients That Made This Country, You Know, The Miracle Of The World - I Mean We Had A Seven For One Improvement In The Average American Standard Of Living In The 20th Century.

I Mean, If Pearl Harbor Came Along, You Could Have Said The Planning Was Wrong By The Military Ahead Of Time Or Maybe The Battleships Shouldn't Have All Been In The Harbor And All That Kind Of Thing.

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.

Enjoy Your Work And Work For Whom You Admire.

The Value Of A Business Is The Cash It's Going To Produce In The Future.

So Smile When You Read A Headline That Says "investors Lose As Market Falls." Edit It In Your Mind To "disinvestors Lose As Market Falls-but Investors Gain." Though Writers Often Forget This Truism, There Is A Buyer For Every Seller And What Hurts One Necessarily Helps The Other. (as They Say In Golf Matches: "every Putt Makes Someone Happy.")

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Mr. Market Is Kind Of A Drunken Psycho. Some Days He Gets Very Enthused, Some Days He Gets Very Depressed. And When He Get Really Enthused You Sell To Him, And If He Gets Depressed, You Buy From Him. There's No Moral Taint Attached To That.

Like Most Trends, At The Beginning It's Driven By Fundamentals, At Some Point Speculation Takes Over. What The Wise Man Does In The Beginning, The Fool Does In The End.

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Resolution Trust Company Was Set Up To Liquidate A Bunch Of Assets That The Government Had Inherited Because The Savings And Loans Went Broke.

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.

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.

At Age 19, I Read A Book [the Intelligent Investor] And What I'm Doing Today, At Age 76, Is Running Things Through The Same Thought Process I Learned From The Book I Read At 19.

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

If You Understood A Business Perfectly And The Future Of The Business, You Would Need Very Little In The Way Of A Margin Of Safety. So, The More Vulnerable The Business Is, Assuming You Still Want To Invest In It, The Larger Margin Of Safety You'd Need. If You're Driving A Truck Across A Bridge That Says It Holds 10,000 Pounds And You've Got A 9,800 Pound Vehicle, If The Bridge Is 6 Inches Above The Crevice It Covers, You May Feel Okay, But If It's Over The Grand Canyon, You May Feel You Want A Little Larger Margin Of Safety.

The Most Common Cause Of Low Prices Is Pessimism - Some Times Pervasive, Some Times Specific To A Company Or Industry. We Want To Do Business In Such An Environment, Not Because We Like Pessimism But Because We Like The Prices It Produces. It's Optimism That Is The Enemy Of The Rational Buyer.

If You Are A Professional And Have Confidence, Then I Would Advocate Lots Of Concentration.

Have Confidence

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.

Of The Billionaires I Have Known, Money Just Brings Out The Basic Traits In Them. If They Were Jerks Before They Had Money, They Are Simply Jerks With A Billion Dollars.

Investing Is Simple, But Not Easy.

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If We Have A Strength, It Is In Recognizing When We Are Operating Well Within Our Circle Of Competence And When We Are Approaching The Perimeter.

A Prediction About The Direction Of The Stock Market Tells You Nothing About Where Stocks Are Headed, But A Whole Lot About The Person Doing The Predicting.

Market Prices For Stocks Fluctuate At Great Amplitudes Around Intrinsic Value But, Over The Long Term, Intrinsic Value Is Virtually Always Reflected At Some Point In Market Price.

Intrinsic Value

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

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

I Won't Close Down A Business Of Subnormal Profitability Merely To Add A Fraction Of A Point To Our Corporate Returns. I Also Feel It Inappropriate For Even An Exceptionally Profitable Company To Fund An Operation Once It Appears To Have Unending Losses In Prospect. Adam Smith Would Disagree With My First Proposition And Karl Marx Would Disagree With My Second; The Middle Ground Is The Only Position That Leaves Me Comfortable.

Always Associate Yourself With People Who Are Better Than You.

The Woman That Comes In, Takes The Wastebasket Away, She's Paying 15.3 Or Whatever It Is On Payroll Tax Alone. I Mean It Is - I Never Had It So Good.

You’d Get Very Rich If You Thought Of Yourself As Having A Card With Only Twenty Punches In A Lifetime, And Every Financial Decision Used Up One Punch. You’d Resist The Temptation To Dabble. You’d Make More Good Decisions And You’d Make More Big Decisions.

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 Mean You Know At Midnight Everything Is Going To Turn To Pumpkins And Mice; Right? But If The Evening Goes Along, I Mean, You Know, The Guys Look Better All The Time, The Music Sounds Better, It's More And More Fun, You Think Why The Hell Should I Leave At Quarter Of 12. I'll Leave At Two Minutes To 12. But The Trouble Is, There Are No Clocks On The Wall. And Everybody Thinks They're Going To Leave At Two Minutes To 12.

We've Had Public Companies In The Past In That Business And They Bleed. We've Got A Lot More Blood Than They Do.

I Think That Both Parties Should Declare The Debt Limit As A Political Weapon Of Mass Destruction Which Can't Be Used. I Mean, It Is Silly To Have A Country That Has 237 Years Building Up Its Reputation And Then Have People Threaten To Tear It Down Because They're Not Getting Some Other Matter.

The Most Dangerous Distractions Are The Ones You Love, But That Don’t Love You Back.

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.

The Truth Is That I've Got All My Net Worth Safely In Berkshire And I Will Never Sell A Share So There Is No One More Concerned About What Happens After My Death Than I Am.

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.

If, When Making A Stock Investment, You're Not Considering Holding It At Least Ten Years, Don't Waste More Than Ten Minutes Considering It.

It's Not Debt Per Say That Overwhelms An Individual Corporation Or Country. Rather It Is A Continuous Increase In Debt In Relation To Income That Causes Trouble.

The Best Investment You Can Make Is In Yourself.

Investment Success

I Think It's Been, You Know, Kind Of Like A Tragic Play To This Point. But At This Point, I Think It's Clear, And Will Be Clear To The Majority Of The Congress. I Think It's Clear To The American People That There Is Only One Countervailing Force To A World Where Financial Institutions Are Trying To Sell Instruments Every Day And Where Credit Has Dried Up, And That's The United States Treasury.

Market Price, While Used Exclusively To Value Our Investments In Minority Positions, Is Not A Relevant Factor When Applied To Our Controlling Interests.

Asset Values And Earning Power Are The Dominant Factors Affecting The Valuation Of A Controlling Interest In A Business. Market Price, Which Governs Valuation Of Minority Interest Positions, Is Of Little Or No Importance In Valuing A Controlling Interest.

In The Business World, The Rearview Mirror Is Always Clearer Than The Windshield.

In My View, [the Trade Deficit] Will Create Political Turmoil At Some Point...pretty Soon, I Think There Will Be A Big Adjustment.

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

A Lot Of Great Fortunes In The World Have Been Made By Owning A Single Wonderful Business. If You Understand The Business, You Don't Need To Own Very Many Of Them.

I Mean, They Were Getting The Mortgage Of Some Guy In Omaha, You Know, Securitized A Couple Of Times. I Mean He Had All These - They Had All These Types From Wall Street, You Know, And They Had Advanced Degrees, And They Look Very Alert, And They Came With These - They Came With These Things That Said Gamma And Alpha And Sigma And All That. And All I Can Say Is Beware Of Geeks, You Know, Bearing Formulas. They've Heard That In Europe.

When Investing, Pessimism Is Your Friend, Euphoria The Enemy.

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.

A Diamond Cannot Be Polished Without Friction, Nor A Person Perfected Without Trials. Someone Is Enjoying Shade Today Because Someone Planted A Tree A Long Time Ago.

It's Far Better To Buy A Wonderful Company At A Fair Price Than A Fair Company At A Wonderful Price.

Investing Money

In The Long Run Managements Stressing Accounting Appearance Over Economic Substance Usually Achieve Little Of Either.

When They Get Their Ego Involved, People Do Things They Shouldn't Do.

Our Goal Is To Find An Outstanding Business At A Sensible Price, Not A Mediocre Business At A Bargain Price.

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.

A Stock Doesn't Know That You Own It.

The Ideal Business Is One That Earns Very High Returns On Capital And That Keeps Using Lots Of Capital At Those High Returns. That Becomes A Compounding Machine.

The Smartest Side To Take In A Bidding War Is The Losing Side.

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.

If You Were At Lehman, The Same Thing Happened. If You Were At Aig, The Shareholders Are Getting Creamed On These Things. And Those Shareholders Are Not Just A Bunch Of Big Shots In Wall Street. Those Are Pension Funds, And Those Are Investors All Over The Country. I Wouldn't Worry Too Much About That. Justice Won't Be Perfect On It.

In The Great Majority Of Cases We Simply Do Not Know Enough About The Industry Or Company To Come To Sensible Judgments-in That Situation We Pass.

Turnarounds Seldom Turn.

You Really Don't Need Leverage In This World Much. If You're Smart, You're Going To Make A Lot Of Money Without Borrowing. I've Never Borrowed A Significant Amount Of Money In My Life. Never. Never Will. I've Got No Interest In It.

Suppose That An Investor You Admire And Trust Comes To You With An Investment Idea. This Is A Good One, He Says Enthusiastically. I'm In It, And I Think You Should Be, Too.

The Rest Of The World Really Likes Our Stuff Pretty Well. It's Just We Buy So Damn Much Of What They Produce.

If You Want Your Business To Survive For 100 Years, You've Got To Make It Through Every Single Day For 100 Years. It's Not Enough To Do It 99.9% Of The Time.

Derivatives Are Like Sex. It's Not Who We're Sleeping With, It's Who They're Sleeping With That's The Problem.

I Sent One E-mail In My Life. I Sent It To Jeff Raikes At Microsoft, And It Ended Up In Court In Minneapolis, So I Am One For One.

If You Don't Make Mistakes You Can't Make Decisions.

When Somebody Makes It Very Easy For You To Do It By Saying You Don't Really Have To Put Up My Money, You Can Lie About Your Income A Little, Or We'll Give You 100 Percent Mortgage, You're Going To Do It, Because Everybody That's Done It Has Been Proven Right. You Have Social Tools, And You're Going To Feel Like An Idiot If You Didn't Do It, Because The House Cost More.

I Never Try To Predict The Market.

The Commission Of The Investment Sins Listed Above Is Not Limited To 'the Little Guy.' Huge Institutional Investors, Viewed As A Group, Have Long Underperformed The Unsophisticated Index-fund Investor Who Simply Sits Tight For Decades. A Major Reason Has Been Fees: Many Institutions Pay Substantial Sums To Consultants Who, In Turn, Recommend High-fee Managers. And That Is A Fool's Game.

Growth And Value Investing Are Joined At The Hip.

One’s Objective Should Be To Get It Right, Get It Quick, Get It Out And Get It Over. Your Problem Won’t Improve With Age.

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.

You Can't Help Some Increase From This Point. I Don't Want Any Viewer To Go Away Think A Magic Wand Exists In Congress. So They're Going To See Some More Bad News. But If We Do This, We're Doing The Right Thing.

Do What You Love And Work For Whom You Admire The Most, And You've Given Yourself The Best Chance In Life You Can.

Opportunities Come Infrequently. When It Rains Gold, Put Out The Bucket, Not The Thimble.

We Enjoy The Process Far More Than The Proceeds.

A Pin Lies In Wait For Every Bubble And When The Two Eventually Meet, A New Wave Of Investors Learns Some Very Old Lessons.

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

I Would Rather Sustain The Penalties Resulting From Over-conservatism Than Face The Consequences Of Error, Perhaps With Permanent Capital Loss, Resulting From The Adoption Of "new Era" Philosophy Where Trees Really Do Grow To The Sky.

It Is Easier To Rationalize Than It Is To Be Rational.

Over The Years, A Number Of Very Smart People Have Learned The Hard Way That A Long String Of Impressive Numbers Multiplied By A Single Zero Always Equals Zero.

I Always Knew I Was Going To Be Rich. I Don't Think I Ever Doubted It For A Minute.

If You Look At The Forbes 400, They Are Paying A Lower Rate, Accounting Payroll Taxes, Than Their Secretary Or - Whomever Around Their Office.

I'm Just Lucky To Have Been In The Right Place At The Right Time. Another Place, Another Time, I Wouldn't Have Been As Successful. Society Enabled Me To Make My Money And My Money Should Go To Society.

Someone's Sitting In The Shade Today Because Someone Planted A Tree A Long Time Ago. The Person Sitting In The Shade Now Should Be Grateful For The Person Who Planted And Tended That Tree. That Includes All Those Benefactors Of Humanity Throughout History That Created, Invented, Financed, Produced, Maintained And Improved All That We Enjoy Today.

It's Quite Clear That Stocks Are Cheaper Than Bonds. I Can't Imagine Anybody Having Bonds In Their Portfolio When They Can Own Equities, A Diversified Group Of Equities. But People Do Because They, The Lack Of Confidence. But That's What Makes For The Attractive Prices. If They Had Their Confidence Back, They Wouldn't Be Selling At These Prices. And Believe Me, It Will Come Back Over Time.

If The World Couldn't See Your Results, Would You Rather Be Thought Of As The World's Greatest Investor But In Reality Have The World's Worst Record? Or Be Thought Of As The World's Worst Investor When You Were Actually The Best?

I Will Do Anything That Is Basically Covered By The Law To Reduce Berkshire's Tax Rate. For Example, On Wind Energy, We Get A Tax Credit If We Build A Lot Of Wind Farms. That's The Only Reason To Build Them. They Don't Make Sense Without The Tax Credit.

Returns Decrease As Motion Increases.

There Is No Substitute For A Local Newspaper That Is Doing Its Job.

The American Worker Is More Productive Than He's Ever Been.

American Workers

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

I've Already Written A Section In The Annual Report For Next Year Explaining Why I Think In One Case That The Figures On Our Balance Sheet As Calculated Are Wrong. But It's The Standard Way Of Doing It. It's Holy Writ. The Sec Wants Us To Do It That Way, And We'll Do It That Way, And I'll Explain Why I Think It's Wrong And Shareholders Can Read It And See Whether They Agree With My Logic Or Don't.

It's Us Fun Being A Horse When The Tractor Comes Along, Or The Blacksmith When The Car Comes Along.

Our Stay-put Behavior Reflects Our View That The Stock Market Serves As A Relocation Center At Which Money Is Moved From The Active To The Patient.

I Don't Think You Can Have A Better Secretary Of The Treasury Than Hank Paulson.

Nothing Sedates Rationality Like Large Doses Of Effortless Money.

Investing Money

Everybody's Got A Different Circle Of Competence. The Important Thing Is Not How Big The Circle Is. The Important Thing Is Staying Inside The Circle.

It Is More Important To Say "no" To An Opportunity, Than To Say "yes".

Knowing What To Leave Out Is Just As Important As Knowing What To Focus On.

I Bought My First Stock In 1942, In The Summer Of '42. I Was 11 Years Old. And So 75 Years Have Gone By. And I Have Never Known What The Market's Going To Do The Next Day. And That's Not My Game. My Game Is To Decide Whether I'm In The Right Economy, Which America's Definitely Been Ever Since That Time. The Dow Has Gone From 100 To 21,000 During That Time. And No Matter What The Headlines Say, Or Terrible Things Are Happening - We Were Losing The War In The Pacific When I First Bought Stocks.

My Rather Puritanical View Is That Any Investment Manager, Whether Operating As Broker, Investment Counselor Of A Trust Department, Investment Company, Etc., Should Be Willing To State Unequivocally What He Is Going To Attempt To Accomplish And How He Proposes To Measure The Extent To Which He Gets The Job Done.

Risk Can Be Greatly Reduced By Concentrating On Only A Few Holdings.

Interest Rates Are To Asset Prices What Gravity Is To The Apple. When There Are Low Interest Rates, There Is A Very Low Gravitational Pull On Asset Prices.

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.

The Power Of Unconditional Love. I Mean, There Is No Power On Earth Like Unconditional Love.

Unconditional Love

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.

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