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

-Warren Buffett

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It’s Not That I

Warren Buffett

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

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

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

Asking For Financial Advice From A Financial Planner Is Like Asking A Barber If You Need A Hair Cut.

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

Does The Business Have A Consistent Operating History?

Look For 3 Things In A Person. Intelligence, Energy, & Integrity. If They Don't Have The Last One, Don't Even Bother With The First Two.

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

I'd Rather Have A $10 Million Business Making 15 Per Cent Than A $100 Million Business Making 5 Per Cent.

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

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.

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.

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

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

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).

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

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.

I Made My First Investment At Age Eleven. I Was Wasting My Life Up Until Then.

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

An Irresistable Footnote: In 1971, Pension Fund Managers Invested A Record 122% Of Net Funds Available In Equities - At Full Prices They Couldn't Buy Enough Of Them. In 1974, After The Bottom Had Fallen Out, They Committed A Then Record Low Of 21% To Stocks.

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

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

Passion For What You Do

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.

The Most Important Thing In Terms Of Your Circle Of Competence Is Not How Large The Area Of It Is, But How Well You've Defined The Perimeter.

I Know What I Want To Do And It Makes Sense To Get Going.

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

Beware Of Geeks Bearing Formulas.

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.

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

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

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

Activity Is The Enemy Of Investment Returns.

The Line Separating Investment And Speculation, Which Is Never Bright And Clear, Becomes Blurred Still Further When Most Market Participants Have Recently Enjoyed Triumphs. Nothing Sedates Rationality Like Large Doses Of Effortless Money. After A Heady Experience Of That Kind, Normally Sensible People Drift Into Behavior Akin To That Of Cinderella At The Ball.

Investing Money

Valuing A Business Is Part Art And Part Science.

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

Traditional Wisdom Is Long On Tradition And Short On Wisdom.

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 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 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.

Our Approach Is Very Much Profiting From Lack Of Change Rather Than From Change. With Wrigley Chewing Gum, It's The Lack Of Change That Appeals To Me. I Don't Think It Is Going To Be Hurt By The Internet. That's The Kind Of Business I Like.

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

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.

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.

Too Often, Executive Compensation In The U.s. Is Ridiculously Out Of Line With Performance. That Won't Change, Moreover, Because The Deck Is Stacked Against Investors When It Comes To The Ceo's Pay. The Upshot Is That A Mediocre-or-worse Ceo - Aided By His Handpicked Vp Of Human Relations And A Consultant From The Ever-accommodating Firm Of Ratchet, Ratchet And Bingo - All Too Often Receives Gobs Of Money From An Ill-designed Compensation Arrangement.

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

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

Confidence In Markets And In Institutions, It's A Lot Like Oxygen. When You Have It, You Don't Even Think About It. It's Indispensable. You Can Go Years Without Thinking About It. When It's Gone For Five Minutes, It's The Only Thing To Think About.

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

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

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.

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.

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.

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

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.

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

All There Is To Investing Is Picking Good Stocks At Good Times And Staying With Them As Long As They Remain Good Companies.

Buy Into A Company Because You Want To Own It, Not Because You Want The Stock To Go Up.

Investing Money

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

I Really Like My Life. I've Arranged My Life So That I Can Do What I Want.

If You Don't Know The Jewelry, Know The Jeweller

The Extraordinary Business Does Not Require Good Management.

The Key To Success Is Emotional Stability.

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.

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

Mental Toughness

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

Taking The High Road

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

I Don't Want To Be On The Other Side Of The Table From The Customer. I Was Never Selling Anything That I Didn't Believe In Myself Or Use Myself.

They Say The Chains Of Habit Are Too Light To Be Felt Until They Are Too Heavy To Be Broken. The Chains You Put Around Yourself Now Have Enormous Consequences As You Go Through Life.

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.

He Must Never Forget Charlie's Plea: Tell Me Where I'm Going To Die, So I'll Never Go There.

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

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.

If We Start Deciding, Based On Guesses Or Emotions, Whether We Will Or Won't Participate In A Business Where We Should Have Some Long Run Edge, We're In Trouble.

What The Human Being Is Best At Doing Is Interpreting All New Information So That Their Prior Conclusions Remain Intact.

It Is Impossible To Unsign A Contract, So Do All Your Thinking Before You Sign.

Other Guys Read Playboy. I Read Annual Reports.

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.

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

I'm Always Interested In Understanding The Math Of Things And Understanding As Much As I Can About All Aspects Of Business. And What I Learn Today May Be Useful To Me Two Years From Now. That's Really The Wonderful Thing About Investments Is Your Knowledge Is Cumulative.

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

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

It's Never Paid To Bet Against America.

I Don't Try And Guess When To Get In And Out Of The Market. I Have Owned Stocks Consistently Since 1942. I Owned The - I Was Buying Stocks The Day Before The Election. I Was Buying The Same Stocks The Day After Election. And If Hillary Had Been Elected, It Would Have Been The Same Thing.

I May Have More Money Than You, But Money Doesn't Make The Difference. If There Is Any Difference Between You And Me, It May Simply Be That I Get Up And Have A Chance To Do What I Love To Do, Every Day. If You Learn Anything From Me, This Is The Best Advice I Can Give You.

I Have Worked With Investors For 60 Years And I Have Yet To See Anyone - Not Even When Capital Gains Rates Were 39.9 Percent In 1976-77 - Shy Away From A Sensible Investment Because Of The Tax Rate On The Potential Gain.

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

Our Approach Is Very Much Profiting From Lack Of Change Rather Than From Change.

Investing Money

Yeah, We Don't Consider Many Stupid Things. I Mean, We Get Rid Of 'em Fast...just Getting Rid Of The Nonsense -- Just Figuring Out That If People Call You And Say, 'i've Got This Great, Wonderful Idea', You Don't Spend 10 Minutes Once You Know In The First Sentence That It Isn't A Great, Wonderful Idea...don't Be Polite And Go Through The Whole Process.

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

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.

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

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

I'm Happy When I Can Spend Every Day Doing The Things That I Like To Do. That's My Luxury.

People Always Ask Me Where They Should Go To Work, And I Always Tell Them To Go To Work For Whom They Admire The Most.

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

In The Insurance Business, There Is No Statute Of Limitation On Stupidity.

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

A Pack Of Lemmings Looks Like A Group Of Rugged Individualists Compared With Wall Street When It Gets A Concept In Its Teeth.

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

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

I 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.

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

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

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

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

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

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

We Continue To Make More Money When Snoring Than When Active.

Having First Rate People On The Team Is More Important Than Designing Hierarchies And Clarifying Who Reports To Whom.

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.

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

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

When I Take A Look At A Company's Annual Report, If I Don't Understand It, They Don't Want Me To Understand It.

A Single Year's Performance Is Of Minor Importance And, Good Or Bad, Should Never Be Taken Seriously.

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.

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

Investment Success

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

Intrinsic Value

It Makes A Difference Who The Treasury Secretary Is.

Making A Difference

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

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

Investing Money

Never Test The Depth Of River With Both The Feet.

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

Managers And Investors Alike Must Understand That Accounting Numbers Are The Beginning, Not The End, Of Business Valuation.

When People Tell Me They've Learned From Experience, I Tell Them The Trick Is To Learn From Other People's Experience.

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.

It Is Unquestionably True That The Investment Companies Have Their Money More Conventionally Invested Than We Do. To Many People Conventionality Is Indistinguishable From Conservatism. In My View, This Represents Erroneous Thinking. Neither A Conventional Nor An Unconventional Approach, Per Se, Is Conservative.

Should You Find Yourself In A Chronically Leaking Boat, Energy Devoted To Changing Vessels Is Likely To Be More Productive Than Energy Devoted To Patching Leaks.

Investing Money

Investment Success

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

I Think What People Understand There Probably - Well, They Were Hoping The Private Sector Would Do It [rescuing Aig ].

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

Important Decisions

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

Bad Terminology Is The Enemy Of Good Thinking.

Cash Combined With Courage In A Time Of Crisis Is Priceless.

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

Never Invest In A Business You Don't Understand.

If You Owe Money, You Can't Pay Them Out. You Just Pay For Everything, You Do Smart Things, You Eventually Get Very Rich.

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

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.

Accounting Is The Language Of Business.

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.

The Plan Itself Is Opportunism. There Is No Plan Before That.

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.

I Think It Will Get Moving Faster. I Mean Once You Get It Off The - Once Credit Flows - Now The Recession Is Going To Get Worse.

Never Invest In A Business You Can't Understand

I Don't Know That I Could Draw One That's Perfect. But I'd Rather By Approximately Right Than Precisely Wrong, And It Would Be Precisely Wrong To Turn It Down.

The Wise Man Once Said Invest Young

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

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

Look For Companies With High Profit Margins.

Never Depend On A Single Source Of Income.

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.

My Favorite Time Frame For Holding A Stock Is Forever.

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

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

Does The Business Have Favourable Long Term Prospects?

Buy A Business, Don't Rent Stocks.

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

Investors Making Purchases In An Overheated Market Need To Recognize That It May Often Take An Extended Period For The Value Of Even An Outstanding Company To Catch Up With The Price They Paid.

Is Management Rational?

If Some Institution Wants To Sell You A Billion Dollars Worth Of Mortgages, They Might Have To Sell 100 Million In The Market, And Then You'll Buy The Other 900 Million On The Same Terms. Now, The Very Fact That This Has Been Authorized Or Will Be Authorized, I Hope, Will Firm Up The Market To Some Degree. And That's Fine. But You Don't Want To Have Artificial Prices Being Paid.

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

The Happiest People Do Not Necessarily Have The Best Things. They Simply Appreciate The Things They Have.

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.

On His Giving Pledge Philanthropy: The Way I Got The Message Out Was To Get A Copy Of Forbes, Look Down That 400 List And Start Making Phone Calls! Bill And Melinda [gates] Did The Same Thing. So Keep Publishing The List So I Can Milk It.

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

Businesses Always Have Opportunities To Improve Service, Product Lines, Manufacturing Techniques, And The Like, And Obviously These Opportunities Should Be Seized. But A Business That Constantly Encounters Major Change Also Encounters Many Chances For Major Error

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.

There Is No Question That An Important Service Is Provided To Investors By Investment Companies, Investment Advisors, Trust Departments, Etc. This Service Revolves Around The Attainment Of Adequate Diversification, The Preservation Of A Long-term Outlook, The Ease Of Handling Investment Decisions And Mechanics, And Most Importantly, The Avoidance Of The Patently Inferior Investment Techniques Which Seem To Entice Some Individuals.

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

I Have Pledged - To You, The Rating Agencies And Myself - To Always Run Berkshire With More Than Ample Cash. We Never Want To Count On The Kindness Of Strangers In Order To Meet Tomorrow's Obligations. When Forced To Choose, I Will Not Trade Even A Night's Sleep For The Chance Of Extra Profits.

It Is Not Necessary To Do Extraordinary Things To Get Extraordinary Results.

People Should Always Know Better.

Whether We’re Talking About Socks Or Stocks, I Like Buying Quality Merchandise When It Is Marked Down.

Investing Money

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

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

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

Business Success

Energy Deregulation Will Be The Largest Transfer Of Wealth In History.

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.

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

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.

None Of This Means, However, That A Business Or Stock Is An Intelligent Purchase Simply Because It Is Unpopular; A Contrarian Approach Is Just As Foolish As A Follow-the-crowd Strategy. What's Required Is Thinking Rather Than Polling. Unfortunately, Bertrand Russell's Observation About Life In General Applies With Unusual Force In The Financial World: "most Men Would Rather Die Than Think. Many Do."

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.

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

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

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've Seen More People Fail Because Of Liquor And Leverage -- Leverage Being Borrowed Money. You Really Don't Need Leverage In This World Much. If You're Smart, You're Going To Make A Lot Of Money Without Borrowing.

Investing Money

Remember That The Stock Market Is Manic-depressive.

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

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

... 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.

We Try To Exert A Ted Williams Kind Of Discipline. In His Book The Science Of Hitting, Ted Explains That He Carved The Strike Zone Into 77 Cells, Each The Size Of A Baseball. Swinging Only At Balls In His "best" Cell, He Knew, Would Allow Him To Bat .400; Reaching For Balls In His "worst" Spot, The Low Outside Corner Of The Strike Zone, Would Reduce Him To .230. In Other Words, Waiting For The Fat Pitch Would Mean A Trip To The Hall Of Fame; Swinging Indiscriminately Would Mean A Ticket To The Minors.

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.

You Should Be Unconcerned About Short-term Price Action When You Own The Securities Directly, Just As You Were Unconcerned When You Owned Them Indirectly Through Bpl. I Think About Them As Businesses, Not "stocks", And If The Business Does All Right Over The Long Term, So Will The Stock.

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

There Is Seldom Just One Cockroach In The Kitchen. You Know, You Turn On The Light And, All Of Sudden, They All Start Scurrying Around.

One Of The Ironies Of The Stock Market Is The Emphasis On Activity. Brokers, Using Terms Such As 'marketability' And 'liquidity,' Sing The Praises Of Companies With High Share Turnover... But Investors Should Understand That What Is Good For The Croupier Is Not Good For The Customer. A Hyperactive Stock Market Is The Pick Pocket Of Enterprise.

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

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

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