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I Mean There Is No Capital Requirements To It Or Anything Of The Sort. And Basically, I Said There Were Possibly Financial Weapons Of Mass Destruction, And They Had Them. They Destroyed Aig. They Certainly Contributed To The Destruction Of Bear Sterns And Lehman. Although Lehman Had Other Problems, Too.

-Warren Buffett

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I Mean There Is

Warren Buffett

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I Mean There Is No Capital Requirements To It Or Anything Of The Sort. And Basically, I Said There Were Possibly Financial Weapons Of Mass Destruction, And They Had Them. They Destroyed Aig. They Certainly Contributed To The Destruction Of Bear Sterns And Lehman. Although Lehman Had Other Problems, Too.

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Mass Destruction

More From Warren Buffett

We Will Continue To Ignore Political And Economic Forecasts, Which Are An Expensive Distraction For Many Investors And Businessmen. Thirty Years Ago, No One Could Have Foreseen The Huge Expansion Of The Vietnam War, Wage And Price Controls, Two Oil Shocks, The Resignation Of A President, The Dissolution Of The Soviet Union, A One-day Drop In The Dow Of 508 Points, Or Treasury Bill Yields Fluctuating Between 2.8% And 17.4%.

If You Want A Government That's Going To Do The Things We Ask Our Government To Do, You've Got To Get It From Somebody.

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

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.

In Some Corner Of The World They Are Probably Still Holding Regular Meetings Of The Flat Earth Society. We Derive No Comfort Because Important People, Vocal People, Or Great Numbers Of People Agree With Us. Nor Do We Derive Comfort If They Don't.

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.

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

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

You Have To Understand Accounting And You Have To Understand The Nuances Of Accounting. It's The Language Of Business And It's An Imperfect Language, But Unless You Are Willing To Put In The Effort To Learn Accounting - How To Read And Interpret Financial Statements - You Really Shouldn't Select Stocks Yourself

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.

Our Marketable Equities Tell Us By Their Operating Results - Not By Their Daily, Or Even Yearly, Price Quotations - Whether Our Investments Are Successful. The Market May Ignore Business Success For A While, But Eventually Will Confirm It.

Business Success

Sound Investing Can Make You Very Wealthy If You're Not In Too Big A Hurry

Americans Are In A Cycle Of Fear Which Leads To People Not Wanting To Spend And Not Wanting To Make Investments, And That Leads To More Fear. We'll Break Out Of It. It Takes Time.

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.

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.

If I Got A Chance To Take One Percent Of The Deal Either Way, I Would Make That Bet.

Somebody's Buying These Treasury Bills At 1/20th Of One Percent. Consuming About $2 Billion A Day Of Goods And Services Beyond What We're Producing. In Other Words, The Rest Of The World Sends About $2 Billion A Day Net Of Something.we Got To Send Them Something In Return, Don't We. So We Send Them Little Pieces Of Paper.

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

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.

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

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.

We Do Not View The Company Itself As The Ultimate Owner Of Our Business Assets But Instead View The Company As A Conduit Through Which Our Shareholders Own Assets.

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

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

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.

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.

Lethargy Bordering On Sloth Remains The Cornerstone Of Our Investment Style. The Exception Was Wells Fargo, A Superbly-managed, High-return Banking Operation In Which We Increased Our Ownership To Just Under 10%, The Most We Can Own Without The Approval Of The Federal Reserve Board.

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.

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

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.

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.

Time Is Your Friend, Impulse Is Your Enemy. Take Advantage Of Compound Interest And Don't Be Captivated By The Siren Song Of The Market.

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

If You Do Smart Things And Use Leverage And Do One Wrong Thing Along The Way, It Could Wipe You Out, Because Anything Times Zero Is Zero. But It's Reinforcing When The People Around You Are Doing It Successfully, You're Doing It Successfully, And It's A Lot Like Cinderella At The Ball.

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.

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

Games Are Won By Players Who Focus On The Playing Field -- Not By Those Whose Eyes Are Glued To The Scoreboard.

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

Intensity Is The Price Of Excellence.

When A Management With Reputation For Brilliance Gets Hooked Up With A Business With A Reputation For Bad Economics, It's The Reputation Of The Business That Remains Intact.

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.

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.

Diversification Is A Protection Against Ignorance. It Makes Very Little Sense For Those Who Know What They're Doing.

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

We Look For Things I Can Understand. A Lot Of Businesses I Don't Understand.

I Mean, We'll Be Pounding On The Guy's Chest, You Know, On The Floor, And You Know, He's Not Going To Just Jump Up All Of A Sudden. So It Makes It Tough. I Mean, It's Tough To Be In The Legislature, You Know, And Vote For Something And Then People Say, Well, You Voted All This Money And You Know, It's All Getting Spent. It Isn't Getting Spent. It's Getting Invested. But It's All Getting Spent. Nothing's Happening.

It Irritates The Hell Out Of Me But You Can't Buy Love.

I Mean, In Terms Of Alternatives, Some People Have Suggested For Example That Why Don't We - Why Isn't America Doing What Berkshire Hathaway Is Doing? Why Isn't That A Better Deal For America?

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.

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.

I Think That Trying To Invest Through 535 People Is A Tough Job, You Know, And So I Would Give More Latitude.

If You Cannot Control Your Emotions, You Cannot Control Your Money.

The Best Thing I Did Was Choose The Right Heroes.

Money Will Not Change How Healthy You Are Or How Many People Love You.

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

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

In The End We Must Have People To Match Our Principles, Not The Reverse.

America Should Stand For More Than Just Wealth.

Be Fearful When There Is Greed And Be Greedy When There Is Fear.

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

People Always Should Know Better. People Don't Get - They Don't Get Smarter About Things That Get As Basic As Greed.

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 Would Push Purchasing Power - You Push Out $1,000 Of Purchasing To Those People, It's Going To Get - It's Going To Get Spent. And It Needs To Be Spent. They Need It. And It Should Come, To Some Extent, From Guys Like Me.

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 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.

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.

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

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

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.

It’s Not That I Want Money. It’s The Fun Of Making Money And Watching It Grow.

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

You Could Be Somewhere Where The Mail Was Delayed Three Weeks And Do Just Fine Investing.

Turnarounds Seldom Turn.

Risk Comes From Not Knowing What You're Doing.

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.

The Reaction Of Weak Management To Weak Operations Is Often Weak Accounting.

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

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.

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.

Making Money Isn't The Backbone Of Our Guiding Purpose; Making Money Is The By-product Of Our Guiding Purpose. If You're Doing Something You Love, You're More Likely To Put Your All Into It, And That Generally Equates To Making Money

If I Eat 2,700 Calories A Day, A Quarter Of That Is Coca-cola.

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.

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

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.

The Fed Is The Greatest Hedge Fund In History.

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

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

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

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.

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.

Consciously Paying More For A Stock Than Its Calculated Value - In The Hope That It Can Soon Be Sold For A Still-higher Price - Should Be Labelled Speculation

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.

Making Money Isn't The Backbone Of Our Guiding Purpose; It Is The By-product Of Our Guiding Purpose.

I Lose Confidence In Other People, All Kinds Of Institutions.

Good Profits Simply Are Not Inconsistent With Good Behavior.

The Smarter The Journalists Are, The Better Off Society Is.

I Make Plenty Of Mistakes And I'll Make Plenty More Mistakes, Too. That's Part Of The Game. You've Just Got To Make Sure That The Right Things Overcome The Wrong Ones.

Investment Ideas, Like Women Are Often More Exciting Than Punctual.

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

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

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.

Shares Are Not Mere Pieces Of Paper. They Represent Part Ownership Of A Business. So, When Contemplating An Investment, Think Like A Prospective Owner.

I Was Lucky To Have The Right Heroes. Tell Me Who Your Heroes Are And I'll Tell You How You'll Turn Out To Be. The Qualities Of The One You Admire Are The Traits That You, With A Little Practice, Can Make Your Own, And That, If Practiced, Will Become Habit Forming.

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

... Not Doing What We Love In The Name Of Greed Is Very Poor Management Of Our Lives.

Investment Success

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.

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.

I Would Say It's More Important Who The Treasury Secretary Is Than Who The Vice President Is. If You Want To Have A Debate Here, I'd Like A Debate Between Potential Treasury Secretaries Than The Vice Presidential Debate.

I've Learned Mainly By Reading Myself. So I Don't Think I Have Any Original Ideas. Certainly, I Talk About Reading Graham. I've Read Phil Fisher. So I've Gotten A Lot Of My Ideas From Reading. You Can Learn A Lot From Other People. In Fact, I Think If You Learn Basically From Other People, You Don't Have To Get Too Many New Ideas On Your Own. You Can Just Apply The Best Of What You See.

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.

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.

I Think The Fdic Was One Of The Great Inventions Of The American.

Great Inventions

The Most Common Cause Of Low Prices Is Pessimism - Sometimes Pervasive, Sometimes 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.

Anything Can Happen Anytime In Markets. And No Advisor, Economist, Or Tv Commentator-and Definitely Not Charlie Nor I-can Tell You When Chaos Will Occur. Market Forecasters Will Fill Your Ear But Will Never Fill Your Wallet.

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 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.

A Hyperactive Stock Market Is The Pickpocket Of Enterprise.

The Capital Gains Tax Is 15 Percent Now. So I Sit There In My Office And I Make A Lot Of Money By Capital Gains, And I Pay 15 Percent, And I Pay No Payroll Tax On It.

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

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).

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

Don't Invest In Pieces Of Papers (stocks), Invest In Great Businesses Underlying Them

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.

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

Doing What You Love

I Think That They Hoped The Private Sector Would Come In. And The Private Sector Tried To Come In Until They Saw The Size Of The Problem. I Mean, From Were People On That Weekend That Thought They'd Had A Solution. And Then The Hole Kept Getting Bigger And Bigger. And All Of A Sudden Became Apparent That 20 Billion Wouldn't Do It And 30 Billion Wouldn't Do It And 40 Billion Wouldn't Do It. So It Got Beyond Anybody's Ability To Certainly To Do It In A Short Period Of Time.

The Critical Investment Factor Is Determining The Intrinsic Value Of A Business And Paying A Fair Or Bargain Price.

Never Be Afraid To Ask For Too Much When Selling Or Offer Too Little When Buying.

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

I Look For Businesses In Which I Think I Can Predict What They're Going To Look Like In Ten To Fifteen Years Time. Take Wrigley's Chewing Gum. I Don't Think The Internet Is Going To Change How People Chew Gum.

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

The Key To Investing Is Not Assessing How Much An Industry Is Going To Affect Society, Or How Much It Will Grow, But Rather Determining The Competitive Advantage Of Any Given Company And, Above All, The Durability Of That Advantage.

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

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

Never Give Up Searching For The Job That You’re Passionate About. Try To Find The Job You’d Have If You Were Independently Rich. Forget About The Pay. 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

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

And People Really Behaved In A Fraudulent Way Or Something, We'll Go Back And Find The Culprits Later On. But That Really Isn't The Problem We Have. I Mean That's Where It Came From, Though. We Leveraged Up And If You Have A 20 Percent Fall In Value Of A $20 Trillion Asset, That's $4 Trillion. And When $4 Trillion Lands - Losses Land In The Wrong Part Of This Economy, It Can Gum Up The Whole Place.

How Do You Beat Bobby Fischer? You Play Him At Any Game But Chess. I Try To Stay In Games Where I Have An Edge.

I Spend Twelve Hours A Week - A Little Over 10% Of My Waking Hours - Playing The Game. Now I Am Trying To Figure Out How To Get By On Less Sleep In Order To Fit In A Few More Hands.

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

We Don't Get Paid For Activity, Just For Being Right. As To How Long We'll Wait, We'll Wait Indefinitely.

In The End, Alchemy, Whether It Is Metallurgical Or Financial, Fails. A Base Business Can Not Be Transformed Into A Golden Business By Tricks Of Accounting Or Capital Structure. The Man Claiming To Be A Financial Alchemist May Become Rich. But Gullible Investors Rather Than Business Achievements Will Usually Be The Source Of His Wealth.

Accounting Is The Language Of Business.

A Fool And His Money Are Soon Invited Everywhere.

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

Important Decisions

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.

People Went Crazy With Tulip Bulbs. They Went Crazy With The South Sea Bubble, They Went Crazy Internet Stocks, They Went Crazy With The Uranium Stocks Back When I Was First Getting Started.

There's Not Many Businesses Where Someone Can Come In And Offer To Cut The Price In Half And Somebody Doesn't Think About Shifting. But That's The Nature Of The Ratings Business.

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.

Earnings Can Be Pliable As Putty When A Charlatan Heads The Company Reporting Them.

I Mean, Hank Paulson Is In There [ Treasury] At The Wrong Time, Probably Shouldn't Have Taken The Job. He's A Friend Of Mine. But He Knows Markets, He Knows Corporations' Work, He Knows Money, And He's Got The Interests Of The Country At Heart.

The Purpose Of Life Is To Be Loved By As Many People As Possible Among Those You Want To Have Love You

I'll Tell You Why I Like The Cigarette Business. It Cost A Penny To Make. Sell It For A Dollar. It's Addictive. And There's A Fantastic Brand Loyalty.

... But The Important Thing Is That When You Do Find One Where You Really Do Know What You Are Doing, You Must Buy In Quantity.... Charlie And I Have Made A Dozen Or So Very Big Decisions Relative To Net Worth, Although Not As Big As They Should Have Been. And In Each Of Those, We've Known That We Were Almost Certain To Be Right Going In.

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

You Have To Turn Over A Lot Of Rocks To Find Those Little Anomalies. You Have To Find The Companies That Are Off The Map - Way Off The Map. You May Find Local Companies That Have Nothing Wrong With Them At All. A Company That I Found, Western Insurance Securities, Was Trading For $3/share When It Was Earning $20/share!! I Tried To Buy Up As Much Of It As Possible. No One Will Tell You About These Businesses. You Have To Find Them.

At Berkshire, I Both Initiate And Monitor Every Derivatives Contract On Our Books ... If Berkshire Ever Gets In Trouble, It Will Be My Fault. It Will Not Be Because Of The Misjudgments Made By A Risk Committee Or Chief Risk Officer.

Writing A Check Separates A Commitment From A Conversation.

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

They [goverment] Take From The Woman Who Comes In And Takes The Wastebaskets Out.

Very Successful People Say No To Almost Everything.

Investment Success

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

Who Would Think Of Buying Or Selling A Private Business Because Of Someone's Guess On The Stock Market? The Availability Of A Quotation For Your Business Interest (stock) Should Always Be An Asset To Be Utilized If Desired. If It Gets Silly Enough In Either Direction, You Take Advantage Of It. Its Availability Should Never Be Turned Into A Livability Whereby Its Periodic Aberrations In Turn Formulate Your Judgements.

I Am A Huge Bull On This Country. We Will Not Have A Double-dip Recession At All. I See Our Businesses Coming Back Almost Across The Board.

Double Standard

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

Investing Money

The Approach And Strategies Are Very Similar In That You Gather All The Information You Can And Then Keep Adding To That Base Of Information As Things Develop. You Do Whatever The Probabilities Indicated Based On The Knowledge That You Have At That Time, But You Are Always Willing To Modify Your Behaviour Or Your Approach As You Get New Information. In Bridge, You Behave In A Way That Gets The Best From Your Partner. And In Business, You Behave In The Way That Gets The Best From Your Managers And Your Employees.

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.

With Housing It's Something Even More Dramatic Than That, Because Most People Aspire To Own Their Own Home.if You Really Think That Houses Prices Are Going To Go Up Next Year And The Year After, You Feel If I Don't Buy It This Year, I'm Going To Have To Buy It Next Year.that's Not True Of An Internet Stock. But It's True Of A Home.

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

I Understand Goldman Sachs Businesses. We Do Lot Of Business With Him, And Ge Has Been - I Think It's The Longest Running Stock In The Dow Jones Industrial Average. It Will Be 100 Years Now It Will Be Around. I Hope I'm Around Then, Too. And It Was An Attractive Investment. And We Have Had A Lot Of Money Around, Over The Last Two Years, And We're Seeing Things That Are Attractive Now.

The Best Business Returns Are Usually Achieved By Companies That Are Doing Something Quite Similar Today To What They Were Doing Five Or Ten Years Ago.

I Would Say The Biggest Single Cause Was We Had An Incredible Residential Real Estate Bubble.

First Come The Innovators, Then Come The Imitators, Then Come The Idiots.

If You're In A Card Game And You Can't Figure Out Who The Patsy Is, You're It.

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.

I Try To Buy Stock In Businesses That Are So Wonderful That An Idiot Can Run Them. Because Sooner Or Later, One Will.

Investing Money

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

The Best Education You Can Get Is Investing In Yourself, And That Doesn't Mean College Or University.

Look For Companies With High Profit Margins.

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.")

If You Know How To Value Businesses, It's Crazy To Own 50 Stocks Or 40 Stocks Or 30 Stocks, Probably Because There Aren't That Many Wonderful Businesses Understandable To A Single Human Being In All Likelihood. To Forego Buying More Of Some Super-wonderful Business And Instead Put Your Money Into #30 Or #35 On Your List Of Attractiveness Just Strikes Charlie And Me As Madness.

With Each Investment You Make, You Should Have The Courage And The Conviction To Place At Least Ten Per Cent Of Your Net Worth In That Stock

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.

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.

You Know, With Your Money And My Brains, I Mean, There's No Telling How Far We'd Go.

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.

When A Management With A Reputation For Brilliance Tackles A Business With A Reputation For Bad Economics, It Is The Reputation Of The Business That Remains Intact.

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.

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

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

Money Will Always Flow Toward Opportunity, And There Is An Abundance Of That In America.

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.

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

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

Focus On Your Customers And Lead Your People As Though Their Lives Depend On Your Success.

If You Don't Find A Way To Make Money While You Sleep, You Will Work Until You Die.

Risk Comes From Not Knowing What You Are Doing So Wide Diversification Is Only Required When Investors Are Ignorant. You Only Have To Do A Very Few Things In Your Life So Long As You Don't Do Too Many Things Wrong.

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.

What The Wise Do In The Beginning, Fools Do In The End.

We Set No Volume Goals In Our Insurance Business Generally-and Certainly Not In Reinsurance-as Virtually Any Volume Can Be Achieved If Profitability Standards Are Ignored.

A Home Is One Of The Most Important Assets That Most People Will Ever Buy. Homes Are Also Where Memories Are Made And You Want To Work With Someone You Can Trust.

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Katharine McPhee

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