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I Make No Effort To Predict The Course Of General Business Or The Stock Market. Period. However, Currently There Are Practices Snowballing In The Security Markets And Business World Which, While Devoid Of Short Term Predictive Value, Bother Me As To Possible Long Term Consequences.

-Warren Buffett

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I Make No Effort

Warren Buffett

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I Make No Effort To Predict The Course Of General Business Or The Stock Market. Period. However, Currently There Are Practices Snowballing In The Security Markets And Business World Which, While Devoid Of Short Term Predictive Value, Bother Me As To Possible Long Term Consequences.

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It's Got To Be The Best Intellectual Exercise Out There. You're Seeing Through New Situations Every Ten Minutes. In The Stock Market You Don't Base Your Decisions On What The Market Is Doing, But On What You Think Is Rational. Bridge Is About Weighing Gain/loss Ratios. You're Doing Calculations All The Time.

The Difference Between Successful People And Really Successful People Is That Really Successful People Say No To Almost Everything.

We Would Do Best In A Market Where Everyone Acted Foolishly.

A Great Investment Opportunity Occurs When A Marvelous Business Encounters A One-time Huge, But Solvable Problem.

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.

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.

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

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

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.

You Can't Produce A Baby In One Month By Getting Nine Women Pregnant.

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

Don't Pass Up Something That's Attractive Today Because You Think You Will Find Something Way More Attractive Tomorrow.

Is Management Rational?

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

If You Don't Know Jewelry, Know The Jeweler.

The .350 Hitter Expects, And Also Deserves, A Big Payoff For His Performance - Even If He Plays For A Cellar-dwelling Team. And A .150 Hitter Should Get No Reward - Even If He Plays For A Pennant Winner.

The Worst Sort Of Business Is One That Grows Rapidly, Requires Significant Capital To Engender The Growth, And Then Earns Little Or No Money. Think Airlines. Here A Durable Competitive Advantage Has Proven Elusive Ever Since The Days Of The Wright Brothers. Indeed, If A Farsighted Capitalist Had Been Present At Kitty Hawk, He Would Have Done His Successors A Huge Favor By Shooting Orville Down.

I Bought A Company In The Mid-90s Called Dexter Shoe And Paid $400 Million For It. And It Went To Zero. And I Gave About $400 Million Worth Of Berkshire Stock, Which Is Probably Now Worth $400 Billion. But I've Made Lots Of Dumb Decisions. That's Part Of The Game.

I Think Any Time You Couple The Term "wall Street" With "bailout" Or Something Like That, You Know - I Don't Like What's Going On In Wall Street.

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

We've Used Derivatives For Many, Many Years. I Don't Think Derivatives Are Evil, Per Se, I Think They Are Dangerous.

You Can't Buy What Is Popular And Do Well.

A Newspaper That Reduces Its Coverage Of The News Important To Its Community Is Certain To Reduce Its Readership As Well

You Ought To Be Able To Explain Why You’re Taking The Job You’re Taking, Why You’re Making The Investment You’re Making, Or Whatever It May Be. And If It Can’t Stand Applying Pencil To Paper, You’d Better Think It Through Some More. And If You Can’t Write An Intelligent Answer To Those Questions, Don’t Do It.

I Just Think That - When A Country Needs More Income And We Do, We're Only Taking In 15 Percent Of Gdp, I Mean, That - That - When A Country Needs More Income, They Should Get It From The People That Have It.

We Rarely Use Much Debt And, When We Do, We Attempt To Structure It On A Long-term Fixed Rate Basis. We Will Reject Interesting Opportunities Rather Than Over-leverage Our Balance Sheet. This Conservatism Has Penalized Our Results But It Is The Only Behavior That Leaves Us Comfortable, Considering Our Fiduciary Obligations To Policyholders, Depositors, Lenders And The Many Equity Holders Who Have Committed Unusually Large Portions Of Their Net Worth To Our Care.

In An Inflationary World, A Toll Bridge (like Company) Would Be A Great Thing To Own Because You've Laid Out The Capital Costs. You Built It In Old Dollars And You Don't Have To Keep Replacing It.

Possessing A Powerful Worldwide Brand Is Essential For Sustained Success.

The Rich Invest In Time, The Poor Invest In Money.

Words Of Wisdom

It's Good To Learn From Your Mistakes. It's Better To Learn From Other People's Mistakes.

Learn From Your Mistakes

Rule No.1: Never Lose Money. Rule No.2: Never Forget Rule No.1.

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

There Are Three Kinds Of People: 1. Innovators. 2. Imitators. 3. Idiots.

We Make Investment Decisions Based On Our Evaluation Of The Most Profitable Combination Of Probabilities.

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.

What's Nice About Investing Is You Don't Have To Swing At Every Pitch.

Generally Speaking, Investing In Yourself Is The Best Thing You Can Do. Anything That Improves Your Own Talents; Nobody Can Tax It Or Take It Away From You. They Can Run Up Huge Deficits And The Dollar Can Become Worth Far Less. You Can Have All Kinds Of Things Happen. But If You’ve Got Talent Yourself, And You’ve Maximized Your Talent, You’ve Got A Tremendous Asset That Can Return Ten-fold.

If This Is A War, My Side Has The Nuclear Bomb. We Have K Street. We Have Wall Street. Debbie Doesn't Have Anybody. I Want A Government That Is Responsive To The People Who Got The Short Straw In Life.

Government Can't Deliver A Free Lunch To The Country As A Whole. It Can, However, Determine Who Pays For Lunch. And Last Week The Senate Handed The Bill To The Wrong Party... The Poor And Middle Class.

Be Brave When Others Are Afraid, And Afraid When Others Are Brave.

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.

Be Fearful When The Markets Get Greedy, Be Greedy When The Markets Get Fearful.

The Most Important Quality For An Investor Is Temperament, Not Intellect. You Need A Temperament That Neither Derives Great Pleasure From Being With The Crowd Or Against The Crowd.

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 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.

Look At Market Fluctuations As Your Friend Rather Than Your Enemy; Profit From Folly Rather Than Participate In It.

Investment Success

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

Investing Money

When People Talk About Cash Being King, It's Not King If It Just Sits There And Never Does Anything.

The Extraordinary Business Does Not Require Good Management.

The Real Fortunes In This Country Have Been Made By People Who Have Been Right About The Business They Invested In, And Not Right About The Timing Of The Stock Market.

Calculate "owner Earnings" To Get A True Reflection Of Value.

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

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.

The Much-maligned Idle Rich Have Received A Bad Rap: They Have Maintained Their Wealth While Many There Is Scarcely An Instance Of A Man Who Has Made A Fortune By Speculation And Kept It. Andrew Carnegie Of The Energetic Rich, Aggressive Real Estate Operators, Corporate Acquirers, Oil Drillers, Etc. Have Their Fortunes Disappear.

Never Lie Under Any Circumstances.

Successful Investing Takes Time, Discipline And Patience. No Matter How Great The Talent Or Effort, Some Things Just Take Time: You Can't Produce A Baby In One Month By Getting Nine Women Pregnant.

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... It's Important To Have The Right Monetary Policy. It's Important For, To Have The Right Fiscal Policy. But It's Nowhere Near As Important As Just The Normal Regenerative Capacity Of American Capitalism.

It Is Madness To Risk Losing What You Need In Pursuing What You Simply Desire.

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

I Think Confidence Will Come Back.

Traditional Wisdom Is Long On Tradition And Short On Wisdom.

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

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

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.

Managers Thinking About Accounting Issues Should Never Forget One Of Abraham Lincoln's Favorite Riddles: How Many Legs Does A Dog Have, If You Call A Tail A Leg? The Answer: Four, Because Calling A Tail A Leg Doesn't Make It A Leg.

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.

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).

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

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.

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

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

If You Don't Feel Comfortable Owning Something For 10 Years, Then Don't Own It For 10 Minutes.

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

If You Are Not Willing To Own A Stock For 10 Years, Do Not Even Think About Owning It For 10 Minutes.

An Investor Should Act As Though He Had A Lifetime Decision Card With Just Twenty Punches On It.

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

In Earlier Years, A Lesser Effort Produced Literally Dozens Of Comparable Opportunities. It Is Difficult To Be Objective About The Causes For Such Diminution Of One's Own Productivity. Three Factors That Seem Apparent Are: (1) A Somewhat Changed Market Environment; (2) Our Increased Size; And (3) Substantially More Competition.

We Need A Tax System That Essentially Takes Very Good Care Of The People Who Just Really Aren't As Well Adapted To The Market System But Are Nevertheless Doing Useful Things In The Society.

Someone Is Sitting In The Shade Today Because Someone Planted A Tree A Long Time Ago.

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.

It's Very Important That The Determination Of The Us Congress To Do What Is Is Needed Be Made Evident This Week And By The Actions Of Most Of The Members. I Mean, You're Not Going To Get Total Assent.

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.

Investing Is Forgoing Consumption Now In Order To Have The Ability To Consume More At A Later Date.

The Strategy We've Adopted Precludes Our Following Standard Diversification Dogma. Many Pundits Would Therefore Say The Strategy Must Be Riskier Than That Employed By More Conventional Investors. We Disagree. We Believe That A Policy Of Portfolio Concentration May Well Decrease Risk If It Raises, As It Should, Both The Intensity With Which An Investor Thinks About A Business And The Comfort-level He Must Feel With Its Economic Characteristics Before Buying Into It.

Does The Business Have Favourable Long Term Prospects?

You Pay A Very High Price In The Stock Market For A Cheery Consensus.

You Don't Need To Be A Rocket Scientist. Investing Is Not A Game Where The Guy With The 160 Iq Beats The Guy With 130 Iq.

Investment Success

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

The Rich Are Always Going To Say That, You Know, Just Give Us More Money And We'll Go Out And Spend More And Then It Will All Trickle Down To The Rest Of You. But That Has Not Worked The Last 10 Years, And I Hope The American Public Is Catching On.

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.

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

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.

I've Read About All The Sales Today. If You're An Auto Dealer, You're Feeling It. If You're A Furniture Retailer Like We Are, You're Feeling It. If You're A Jewelry Retailer, You're Feeling It. I Know Some Of These Businesses Because We're In Them. Yeah, It's Being Felt, But It Will Be Felt Big Time More If We Don't Do Something About It, What's Going On.

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.

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.

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

The Patient That's On The Floor With The Cardiac Arrest Is Not Wall Street. It's The American Economy.

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

Tell Me Your Heroes And I'll Tell You How Your Life Will End Up

Occasionally, A Man Must Rise Above Principles.

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

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.

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.

I Don't Read Economic Forecasts. I Don't Read The Funny Papers.

You Could Take All The Gold That's Ever Been Mined, And It Would Fill A Cube 67 Feet In Each Direction. For What That's Worth At Current Gold Prices, You Could Buy All -- Not Some -- All Of The Farmland In The United States. Plus, You Could Buy 10 Exxon Mobils, Plus Have $1 Trillion Of Walking-around Money. Or You Could Have A Big Cube Of Metal. Which Would You Take? Which Is Going To Produce More Value?

There Is No Staff. I Make All The Investment Decisions And I Do All My Own Analysis.

Read Ben Graham And Phil Fisher Read Annual Reports, But Don't Do Equations With Greek Letters In Them.

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.")

I Never Try To Predict The Market.

Uncertainty Is The Friend Of The Buyer Of Long Term Values.

The Good Thing Is, We Have Household Formation In This Country.

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

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.

But, Surprise - None Of These Blockbuster Events Made The Slightest Dent In Ben Graham's Investment Principles. Nor Did They Render Unsound The Negotiated Purchases Of Fine Businesses At Sensible Prices. Imagine The Cost To Us, Then, If We Had Let A Fear Of Unknowns Cause Us To Defer Or Alter The Deployment Of Capital. Indeed, We Have Usually Made Our Best Purchases When Apprehensions About Some Macro Event Were At A Peak. Fear Is The Foe Of The Faddist, But The Friend Of The Fundamentalist.

I Certainly Do Believe Anyone Engaged In The Management Of Money Should Have A Standard Of Measurement, And That Both He And The Party Whose Money Is Managed Should Have A Clear Understanding Why It Is The Appropriate Standard, What Time Period Should Be Utilized, Etc.

Never Risk What You Have And Need For What We Don't Have And Don't Need.

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

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

Important Decisions

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.

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.

Investors Have To Remember: Corporate Profits Are Going Up, But Stocks Are Going Up Faster. How Can That Continue Indefinitely? Investors Can Only Earn What Companies Themselves Can Earn; The Government Or The Markets Themselves Don't Kick Anything In. How Can You Get Anything More Out Of A Farm Than What It Grows?

Much Success Can Be Attributed To Inactivity. Most Investors Cannot Resist The Temptation To Constantly Buy And Sell.

You’ve Gotta Keep Control Of Your Time, And You Can’t Unless You Say No. You Can’t Let People Set Your Agenda In Life.

We Need To Throw The Resources At This That Are Necessary. But Like I Say, We Are Not Spending Money. I Mean, If We Buy These Assets Intelligently, The United States Treasury Will Make Money. I Mean, It's Borrowing Money. It's Just A Few Percent A Year.

I Mean, You Know, You're Not Going To Change The Human Animal. And The Human Animal Really Doesn't Get A Lot Smarter.

If Aig Had Tried To Unwind Their Derivatives Books. I Don't Know. It Would Have Hit Every Institution In The World.

Never Depend On Single Income. Make Investment To Create A Second Source.

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

If You Have A Harem Of 40 Women, You Never Get To Know Any Of Them Very Well.

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

My Friends And I Have Been Coddled Long Enough By A Billionaire-friendly Congress.

The Obligation Of A Society As Prosperous As Ours Is To Figure Out How Nobody Gets Left Too Far Behind.

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.

We Have Provided Capital Here With A Couple Of Institutions Recently. The Federal Government Did That In The '30s For The Rfc And I Think There Could Well Be A Proper Role For Government In That.

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

It's Easy To Identify Many Investment Managers With Great Recent Records. But Past Results, Though Important, Do Not Suffice When Prospective Performance Is Being Judged. How The Record Has Been Achieved Is Crucial.

My Favorite Time Frame For Holding A Stock Is Forever.

The Wise Man Once Said Invest Young

During Inflation, Goodwill Is The Gift That Keeps On Giving.

Mental Toughness

We Do Not Have, Nor Have Had, And Never Will Have An Opinion About Where The Stock Market, Interest Rates, Or Business Activity Will Be A Year From Now.

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

You Don't Need To Have Extraordinary Effort To Achieve Extraordinary Results. You Just Need To Do The Ordinary, Everyday Things Exceptionally Well.

Everyday Things

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.

The Future Is Never Clear; You Pay A Very High Price In The Stock Market For A Cheery Consensus. Uncertainty Actually Is The Friend Of The Buyer Of Long-term Values.

Take The Probability Of Loss Times The Amount Of Possible Loss From The Probability Of Gain Times The Amount Of Possible Gain. That Is What We're Trying To Do. It's Imperfect, But That's What It's All About.

If You Have More Than 120 Or 130 I.q. Points, You Can Afford To Give The Rest Away. You Don't Need Extraordinary Intelligence To Succeed As An Investor.

I've Argued With The Senators And Congressmen I've Talked To. You Don't Want To Be Too Little Too Late. If You Buy Them At The Right Price, You May Be Buying Two Trillion Of Face Value.

A Very Rich Person Should Leave His Kids Enough To Do Anything, But Not Enough To Do Nothing.

If You Have A Great Manager, You Want To Pay Him Very Well.

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

The Major Asset In This Category Is Gold, Currently A Huge Favorite Of Investors Who Fear Almost All Other Assets, Especially Paper Money (of Whose Value, As Noted, They Are Right To Be Fearful). Gold, However, Has Two Significant Shortcomings, Being Neither Of Much Use Nor Procreative. True, Gold Has Some Industrial And Decorative Utility, But The Demand For These Purposes Is Both Limited And Incapable Of Soaking Up New Production. Meanwhile, If You Own One Ounce Of Gold For An Eternity, You Will Still Own One Ounce At Its End.

When Bills Come Due, Only Cash Is Legal Tender. Don't Leave Home Without It.

We Always Live In An Uncertain World. What Is Certain Is That The United States Will Go Forward Over Time.

Our Investments Continue To Be Few In Number And Simple In Concept: The Truly Big Investment Idea Can Usually Be Explained In A Short Paragraph. We Like A Business With Enduring Competitive Advantages That Is Run By Able And Owner-oriented People. When These Attributes Exist, And When We Can Make Purchases At Sensible Prices, It Is Hard To Go Wrong (a Challenge We Periodically Manage To Overcome).

Charlie And I Have A Number Of Filters That Things Have To Get Through Before We'll Think About Them.

We Enjoy The Process Far More Than The Proceeds.

The Only Way To Get Love Is To Be Lovable. It's Very Irritating If You Have A Lot Of Money. You'd Like To Think You Could Write A Check: "i'll Buy A Million Dollars' Worth Of Love." But It Doesn't Work That Way. The More You Give Love Away, The More You Get.

In Looking For People To Hire, Look For Three Qualities: Integrity, Intelligence And Energy. And If They Don't Have The First, The Other Two Will Kill You.

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

I Am Not In The Business Of Predicting General Stock Market Of Business Fluctuations. If You Think I Can Do This, Or Think It Is Essential To An Investment Program, You Should Not Be In The Partnership.

What We Learn From History Is That People Don't Learn From History.

Fear Is The Foe Of The Faddist, But The Friend Of The Fundamentalist.

It's Never Paid To Bet Against America. We Come Through Things, But Its Not Always A Smooth Ride.

If You Can't Read The Scoreboard. You Don't Know The Score. If You Don't Know The Score, You Can't Tell The Winners From The Losers.

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

The True Investor Welcomes Volatility ... A Wildly Fluctuating Market Means That Irrationally Low Prices Will Periodically Be Attached To Solid Businesses.

What An Investor Needs Is The Ability To Correctly Evaluate Selected Businesses. Note That Word “selected”: You Don't Have To Be An Expert On Every Company, Or Even Many. You Only Have To Be Able To Evaluate Companies Within Your Circle Of Competence. The Size Of That Circle Is Not Very Important; Knowing Its Boundaries, However, Is Vital.

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.

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

If I Got Any Good Ideas Out Of That Or I Think They're Good Ideas, I'll Be Glad To Contribute Them But The System Will Probably Overdo Some Other Things.

I Think People - What People Want To Do Is Make [economy] Get Worse.

I Knew A Lot About What I Did When I Was 20. I Had Read A Lot, And I Aspired To Learn Everything I Could About The Subject.

Invest In As Much Of Yourself As You Can, You Are Your Own Biggest Asset By Far.

I've Made Money Over The Years By Buying Into Good Companies, Run By Good People, At Attractive Prices. And I Don't Try And Make It Out Of Buying Into The Market At One Point And Selling At Another Point.

Two Rules: 1. Preserve The Principal 2. When In Doubt, See Rule #1.

The Optimum Portfolio Depends On The Various Expectations Of Choices Available And The Degree Of Variance In Performance Which Is Tolerable. The Greater The Number Of Selections, The Less Will Be The Average Year-to-year Variation In Actual Versus Expected Results. Also, The Lower Will Be The Expected Results, Assuming Different Choices Have Different Expectations Of Performance.

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.

Enjoy Your Work And Work For Whom You Admire.

Never Invest In A Business You Don't Understand.

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.

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.

Buy A Business, Don't Rent Stocks.

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

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

Goldman Sachs Saying They Might Be Interested In Such An Investment. I'm Familiar With The Company. I've Known The Management, The Current Management, Jack Welch Before Jeff Immelt. I've Known Him For Decades.

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.

I Do Know That When I Am 60, I Should Be Attempting To Achieve Different Personal Goals Than Those Which Had Priority At Age 20.

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.

When The Brothel Burns Down, Even The Pretty Girls Have To Run Out.

Cultivate Curiosity And Strive To Become A Little Wiser Every Day.

If Knowing History Made You Rich, Librarians Would Be Billionaires.

I Put Heavy Weight On Certainty. It's Not Risky To Buy Securities At A Fraction Of What They're Worth.

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

It Makes A Difference Who The Treasury Secretary Is.

Making A Difference

Is Management Candid With The Shareholders?

Investing In Yourself Is The Best Thing You Can Do. If You've Got Talents, No One Can Take Them From You.

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.

We've Got A Wonderful Economic Formula In This Country.

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

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Ray Harryhausen

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