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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.

-Warren Buffett

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Investors Should Remember That

Warren Buffett

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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.

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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.

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.

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

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We Have To Live With The Rest Of The World. And It's A Mistake, In My View. Trade Has Generally Developed In This Country. We Actually Export 12 Or 13 Percent Of Our Gdp. It Was Only 5 Percent In 1970. But It Benefits Us. It Benefits The Rest Of The World. It Doesn't Benefit The Steelworker Maybe In Ohio. And That's The Problem That Has To Be Addressed, Because When You Have Something That's Good For Society, But Terribly Harmful For Given Individuals, We Have Got To Make Sure Those Individuals Are Taken Care Of.

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.

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.

For Example: (1) As If Governed By Newton's First Law Of Motion, An Institution Will Resist Any Change In Its Current Direction; (2) Just As Work Expands To Fill Available Time, Corporate Projects Or Acquisitions Will Materialize To Soak Up Available Funds; (3) Any Business Craving Of The Leader, However Foolish, Will Be Quickly Supported By Detailed Rate-of-return And Strategic Studies Prepared By His Troops; And (4) The Behavior Of Peer Companies, Whether They Are Expanding, Acquiring, Setting Executive Compensation Or Whatever, Will Be Mindlessly Imitated.

The U.s. Treasury Has Got Borrowing Costs Like Nobody Else Has.

Buy A Business, Don't Rent Stocks.

Derivatives Are Financial Weapons Of Mass Destruction.

Mass Destruction

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

Business Success

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.

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

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

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

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

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 Want To Give A Lecture To This Body That's Out There. You Know, I Mean, Having Had The Heart Attack, I Want To Get It Back Functioning. And As A Practical Matter, I Mean If You Were Bear Stearns, And You Were A Shareholder, You Know, You Lost 90 To 95 Percent Of Your Money. A Good Many Lost Their Jobs. They Lost Very Cushy Lives, Many Of Them.

The Greatest Investment A Young Person Can Make Is In Their Own Education, In Their Own Mind. Because Money Comes And Goes. Relationships Come And Go. But What You Learn Once Stays With You Forever.

Exercise Humility And Restraint.

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

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

My Wealth Has Come From A Combination Of Living In America, Some Lucky Genes, And Compound Interest.

Although We Deal With Probabilities And Expectations, The Actual Results Can Deviate Substantially From Such Expectations, Particularly On A Short-term Basis.

The Ability To Say No Is A Tremendous Advantage For An Investor.

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?

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

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

Investors, Of Course, Can, By Their Own Behavior Make Stock Ownership Highly Risky. And Many Do. Active Trading, Attempts To "time" Market Movements, Inadequate Diversification, The Payment Of High And Unnecessary Fees To Managers And Advisors, And The Use Of Borrowed Money Can Destroy The Decent Returns That A Life-long Owner Of Equities Would Otherwise Enjoy. Indeed, Borrowed Money Has No Place In The Investor's Tool Kit.

I Never Attempt To Make Money On The Stock Market. I Buy On The Assumption That They Could Close The Market The Next Day And Not Reopen It For Five Years.

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I Mean [franklin Delano] Roosevelt Didn't - You Know, When He Came In, He Didn't Print Any Money.

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

The Problem With Commodities Is That You Are Betting On What Someone Else Would Pay For Them In Six Months. The Commodity Itself Isn't Going To Do Anything For You....it Is An Entirely Different Game To Buy A Lump Of Something And Hope That Somebody Else Pays You More For That Lump Two Years From Now Than It Is To Buy Something That You Expect To Produce Income For You Over Time.

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.

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.

Do Not Save What Is Left After Spending, But Spend What Is Left After Saving.

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

I Don't Measure My Life By The Money I've Made. Other People Might, But Certainly Don't.

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

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

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

I Always Invest In Companies An Idiot Could Run, Because One Day One Will.

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.

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.

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

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.

You Should Invest In A Business That Even A Fool Can Run, Because Someday A Fool Will.

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

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

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I Want To Be Able To Explain My Mistakes. This Means I Do Only The Things I Completely Understand.

I Checked The Actuarial Tables, And The Lowest Death Rate Is Among Six-year-olds. So I Decided To Eat Like A Six-year-old.

Investing Is Not As Tough As Being A Top-notch Bridge Player. All It Takes Is The Ability To See Things As They Really Are.

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.

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?

I Mean The Truth Is, I've Never Had It So Good In Terms Of Taxes. I Am Paying The Lowest Tax Rate That I've Ever Paid In My Life.

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

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.

A Company Should Be Viewed As An Unfolding Movie, Not As A Still Photograph

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

Wide Diversification Is Only Required When Investors Do Not Understand What They Are Doing.

Good Profits Simply Are Not Inconsistent With Good Behavior.

That's The Reality Of What They're Going To Sell Them To The Treasury For.

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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.

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

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

You Can't Stand To See Your Neighbor Getting Rich. You Know You're Smarter Than He Is And He's Doing These Things And He's Getting Rich.

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Read 500 Pages Every Day. That's How Knowledge Works. It Builds Up Like Compound Interest.

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

I Think You Should Read Everything You Can. In My Case, By The Age Of 10, I'd Read Every Book In The Omaha Public Library About Investing, Some Twice. You Need To Fill Your Mind With Various Competing Thoughts And Decide Which Make Sense.

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

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.

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.

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

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.

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

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 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.

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

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.

Remember That The Stock Market Is Manic-depressive.

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%.

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

You Know ... You Keep Doing The Same Things And You Keep Getting The Same Result Over And Over Again.

When You Listen To Tax-cut Rhetoric, Remember That Giving One Class Of Taxpayer A Break Requires - Now Or Down The Line - That An Equivalent Burden Be Imposed On Other Parties. In Other Words, If I Get A Break, Someone Else Pays. Government Can't Deliver A Free Lunch To The Country As A Whole. It Can However, Determine Who Pays For Lunch.

The Extraordinary Business Does Not Require Good Management.

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.

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.

There Are 309 Million People Out There That Are Trying To Improve Their Lot In Life. And We've Got A System That Allows Them To Do It.

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.

Mark Zuckerberg Will Be A Hero To Many Young Entrepreneurs 20 Years From Now. Bill Gates Will Be A Hero To Others, And They Will Look To Those [people] Like I Read Books When I Was In My Teens About Rockefeller Or Carnegie.

Young Entrepreneurs

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.

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.

You Need A Lot Of Curiosity For A Long, Long Time.

Unless Your Answers Are Clearly Better, Copy The Answers Of Your Betters.

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

Mental Toughness

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.

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.

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.

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

Equities Will Do Well Over Time - You Just Have To Avoid Getting Excited When Other People Are Getting Excited.

It's A Big Mistake To Try And Mislead People. They Will Turn Around.

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

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

People Should Always Know Better.

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

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

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

Learning How To Live Is Much More Important Than Learning How To Make A Living.

Inspirational Life

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.

If Horses Had Controlled Investment Decisions, There Would Have Been No Auto Industry.

I Think The Rest Of The Country Should Be Paying Less, The 95 Percent That [barack] Obama Talks About Or Maybe Even A Little Higher Than That.

Do What You Would Do For Free, Having Passion For What You Do Is The Most Important Thing.

Passion For What You Do

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

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.

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?

You Should Look At Stocks As Small Pieces Of Business.

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

We've Long Felt That The Only Value Of Stock Forecasters Is To Make Fortune Tellers Look Good. Even Now, Charlie And I Continue To Believe That Short-term Market Forecasts Are Poison And Should Be Kept Locked Up In A Safe Place, Away From Children And Also From Grown-ups Who Behave In The Market Like Children.

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

America Should Stand For More Than Just Wealth.

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

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

You're Dealing With A Lot Of Silly People In The Marketplace; It's Like A Great Big Casino And Everyone Else Is Boozing. If You Can Stick With Pepsi, You Should Be Ok.

Investing Money

In A Commodity Business, It's Very Hard To Be Smarter Than Your Dumbest Competitor.

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

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

The Best Investment You Can Make Is In Yourself.

Investment Success

The Nature Of Democracy Is Such That When There's - There'll Be Revulsion, Obviously, Towards - That's Never Going To Happen Again.

If You Expect To Continue To Purchase Stocks Throughout Your Life, You Should Welcome Price Declines As A Way To Add Stocks More Cheaply To Your Portfolio.

To Win, The First Thing You Have To Do Is Not Lose.

There Is No Question We Have An Access Stock.

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

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

I Choose To Work With Every Single Person That I Work With. That Ends Up Being The Most Important Factor. I Don't Interact With People I Don't Like Or Admire. That's The Key. It's Like Marrying.

Having A Large Amount Of Leverage Is Like Driving A Car With A Dagger On The Steering Wheel Pointed At Your Heart. If You Do That, You Will Be A Better Driver. There Will Be Fewer Accidents But When They Happen, They Will Be Fatal.

When You Build A Bridge, You Insist That It Can Carry 30,000 Pounds, But You Only Drive 10,000-pound Trucks Across It. And That Same Principle Works In Investing.

An Investor Should Ordinarily Hold A Small Piece Of An Outstanding Business With The Same Tenacity That An Owner Would Exhibit If He Owned All Of That Business.

I Think Once You Start Putting Phony Figures Into Financial Statements, You Get In A Lot Of Trouble. And We've Seen So Much Of That In The Last 20 Years.

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

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.

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.

I Would Say That An Rfc-like Thing Might Make Sense. I Probably Would Do It Myself. But I Don't Think Trying To Combine That With What's Going Through Now, I Think What Is Needed Now Is Liquidity.

Our Leaders Have Asked For “shared Sacrifice.” But When They Did The Asking, They Spared Me. I Checked With My Mega-rich Friends To Learn What Pain They Were Expecting. They, Too, Were Left Untouched.

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

In Business, I Look For Economic Castles Protected By Unbreachable 'moats'.

Nothing Sedates Rationality Like Large Doses Of Effortless Money.

Investing Money

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

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

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.

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

The Best Thing I Did Was Choose The Right Heroes.

Wall Street Is The Only Place That People Ride To In A Rolls Royce To Get Advice From Those Who Take The Subway.

Investing Money

Would Your Reply Possibly Be This? Well, It All Depends On What My Tax Rate Will Be On The Gain You're Saying We're Going To Make. If The Taxes Are Too High, I Would Rather Leave The Money In My Savings Account, Earning A Quarter Of 1 Percent. Only In Grover Norquist's Imagination Does Such A Response Exist.

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

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

Our Favorite Holding Period Is Forever.

Funny Inspirational

Focus On Return On Equity, Not Earnings Per Share.

For Some Reason, People Take Their Cues From Price Action Rather Than From Values. What Doesn't Work Is When You Start Doing Things That You Don't Understand Or Because They Worked Last Week For Somebody Else. The Dumbest Reason In The World To Buy A Stock Is Because It's Going Up.

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

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

Writing A Check Separates A Commitment From A Conversation.

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

Only Buy Something That You'd Be Perfectly Happy To Hold If The Market Shut Down For 10 Years.

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

Anything Can Happen In Stock Markets And You Ought To Conduct Your Affairs So That If The Most Extraordinary Events Happen, That You're Still Around To Play The Next Day.

Other Guys Read Playboy. I Read Annual Reports.

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

Your Money Can Be Inflated Away But Your Knowledge And Talent Cannot.

Too Often, A Vast Collection Of Possessions Ends Up Possessing Its Owner.

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.

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.

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

Investing Money

Investing Is Laying Out Money Now To Get More Money Back In The Future.

People Who Watch Their Weight, Golf Scores, And Fuel Bills Seem To Shun Quantitative Evaluation Of Their Investment Management Skills Although It Involves The Most Important Client In The World-themselves.

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

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.

Investing Money

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

We Say We Are Trying To Buy Into Businesses With Excellent Economics, Run By Honest And Able People At A Decent Price. We Buy Very Few Securities, So We Look At It As "focused" Investing.

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

The Trick Is, When There Is Nothing To Do, Do Nothing.

We Try To Buy Businesses With Good-to-superb Underlying Economics Run By Honest And Able People And Buy Them At Sensible Prices. That's All I'm Trying To Do.

Never Invest In A Business You Can't Understand

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

If You Want To Soar Like An Eagle In Life, You Can't Be Flocking With The Turkeys.

You Are Lucky In Life If You Have The Right Heroes. I Advise All Of You, To The Extent You Can, To Pick Out A Few Heroes

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

That Goes Back To 1932, Although It Was Really Implemented In '33 Under Jesse Jones, And It Invested In Mostly Banks Initially And Preferred Stock And That Sort Of Thing. So There Are Two Things Needed In The System, The One That's Needed Overwhelmingly Is Liquidity. I Mean, When People Are Trying To [unintelligible], There Has To Be Somebody There To Buy.

Gold Is A Way Of Going Long On Fear, And It Has Been A Pretty Good Way Of Going Long On Fear From Time To Time. But You Really Have To Hope People Become More Afraid In A Year Or Two Years Than They Are Now. And If They Become More Afraid You Make Money, If They Become Less Afraid You Lose Money, But The Gold Itself Doesn’t Produce Anything.

Outstanding Long-term Results Are Produced Primarily By Avoiding Dumb Decisions, Rather Than By Making Brilliant Ones.

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.

That Which Is Not Worth Doing At All Is Not Worth Doing Well.

It's Never Paid To Bet Against America.

I Don't Really Think That, As A Society, We [americans] Want To Confer Blessings On Generation After Generation Who Contribute Nothing To Society, Simply Because Somebody In The Far Distant Past Happened To Amass A Great Sum Of Wealth.

It's Better To Build Than To Buy If You Can Find The Right People.

Beware Of Geeks Bearing Formulas.

The Financial Calculus That Charlie And I Employ Would Never Permit Our Trading A Good Night's Sleep For A Shot At A Few Extra Percentage Points Of Return. I've Never Believed In Risking What My Friends And Family Have And Need In Order To Pursue What They Don't Have And Don't Need.

For Some Reason People Take Their Cues From Price Action Rather Than From Values. Price Is What You Pay. Value Is What You Get.

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William Dean Howells

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