Just Look At That Forbes 400. Takes A Billion Three To Get On The Forbes 400 This Year. And The Aggregate Wealth Is Just Staggering. And Those People Are Paying Less Percentage Of Their Total Income To The Federal Government Than Their Receptionists Are. [...] I'll Bet A Million Dollars Against Any Member Of The Forbes 400 Who Challenges - Me That The Average For The Forbes 400 Will Be Less Than The Average Of Their Receptionists.

-Warren Buffett

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Warren Buffett

Topic

Government

Average

Years

More From Warren Buffett

As An Investor With Small Capital, One Should Prefer Businesses That Have High Returns On Capital And That Require Little Incremental Investment To Grow.

Littles

Return

Investment

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

Long

Important

Friendly

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.

Goal

Priorities

Age

Writing A Check Separates A Commitment From A Conversation.

Writing

Commitment

Checks

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

Emotional

Discipline

Sound

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.

Events

Made

Macro

We Will Reject Interesting Opportunities Rather Than Over-leverage Our Balance Sheet.

Opportunity

Interesting

Balance

My Father Was The Best Person I've Ever Known.

Inspirational

Motivational

Father

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.

Goal

Ignored

Volume

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

Expectations

Results

Term

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.

Light

Kitchen

Cockroaches

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.

Zero

Smart

People

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.

Integrity

Two

Energy

Investing Is Simple, But Not Easy.

Money

Simple

Investing

I Find That The Standard Of Living Does Not Go Up In Proportion With The Cost Of Living. The Trick In Life Is To Do Things That Are Fun All The Time.

Fun

Cost Of Living

Doe

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

Mean

Years

Worry

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

Learning

People

History

You Do Not Adequately Protect Yourself By Being Half Awake When Other Are Sleeping.

Sleep

Investing

Half

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

Life

Sleep

Night

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.

Want

Looks

Annual Reports

I Like To Go For Cinches. I Like To Shoot Fish In A Barrel. But I Like To Do It After The Water Has Run Out.

Running

Business

Water

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

One Line

One Liner

Certain

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

Mean

College

Investing

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%.

War

Yield

Years

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

Numbers

Trouble

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.

Bridges

Dollars

Would Be

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.

Lying

Giving

House

What's Going To Happen - Things We're Doing Are Going To Have Some Inflationary Consequences.

Happens

Consequence

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

Pieces

Paper

Great Business

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

Wall

Fear

War

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

Enemy

Investing

Emotion

It Makes A Difference Who The Treasury Secretary Is.

Differences

Making A Difference

Treasury

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.

Country

Thinking

Littles

The Secret To Happiness Is Having Low Expectations.

Expectations

Secret

Lows

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

Investing Money

Want

Buffets

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.

Pieces

World

Paper

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

Insightful

Investing

Want

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

Loss

Trying

Gains

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.

Business

Insightful

Causes

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

Money

Assets

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

Past

Blood

Company

There's Always A Mismatch. I Mean, You Know, As The Economy Evolves, It Reallocates Resources. Now, The Real Problem, In My View, Is - This Has Been - The Prosperity Has Been Unbelievable For The Extremely Rich People. If You Go To 1982, When Forbes Put On Their First 400 List, Those People Had $93 Billion. They Now They Have $2.4 Trillion, 25 For One. That Is - This Has Been A Prosperity That's Been Disproportionately Rewarding To The People On Top.

Real

Mean

People

An Ipo Is Like A Negotiated Transaction - The Seller Chooses When To Come Public - And It's Unlikely To Be A Time That's Favourable To You.

Unlikely

Transactions

Sellers

Investors Should Remember That Excitement And Expenses Are Their Enemies. And If They Insist On Trying To Time Their Participation In Equities, They Should Try To Be Fearful When Others Are Greedy And Greedy Only When Others Are Fearful.

Business

Investing Money

Enemy

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.

Memories

Home

People

I Happen To Have A Talent For Allocating Capital. But My Ability To Use That Talent Is Completely Dependent On The Society I Was Born Into. If I'd Been Born Into A Tribe Of Hunters, This Talent Of Mine Would Be Pretty Worthless. I Can't Run Very Fast. I'm Not Particularly Strong. I'd Probably End Up As Some Wild Animal's Dinner.

Running

Strong

Animal

In Investing, Just As In Baseball, To Put Runs On The Scoreboard, One Must Watch The Playing Field, Not The Scoreboard.

Baseball

Running

Watches

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.

Blessing

Past

Thinking

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

Research

I Can

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

Feelings

Today

Furniture

I Insist On A Lot Of Time Being Spent, Almost Every Day, To Just Sit And Think. That Is Very Uncommon In American Business.

Life

Thinking

Generosity

We Enjoy The Process Far More Than The Proceeds.

Business

War

Investing

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.

Party

Past

Rising Prices

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.

Years

Investing

Today

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

World

Stuff

Likes

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.

Running

Country

Nice

Taking Jobs To Build Up Your Resume Is The Same As Saving Up Sex For Old Age.

Jobs

Sex

Saving Up

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.

Crazy

Feet

Moats

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.

Games

Long

Guy

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.

Stupid

Mean

Ideas

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.

Golf

Skills

People

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

Money

Investing

Advantage

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

Ideas

Investment

Exciting

Either They're Trying To Con You Or They're Trying To Con Themselves.

Trying

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

Investing

Sells

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.

Mean

Thinking

People

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.

Jobs

Heart

Mean

We Will Only Do With Your Money What We Would Do With Our Own.

Investing

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

Nostalgia

Used

Older Friends

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.

Pockets

Burning

Investing

If You Lose Money For The Firm, I Will Be Forgiving. If You Lose Reputation, I Will Be Ruthless.

Forgiving

Reputation

Ruthless

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

One Line

Never Forget

Charlie

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

Typical

Looks

Dobermans

Writing Checks To The Irs That Include Strings Of Zeros Does Not Bother Me ... Overall, We Feel Extraordinarily Lucky To Have Been Dealt A Hand In Life That Enables Us To Write Large Checks To The Government Rather Than One Requiring The Government To Regularly Write Checks To Us-say, Because We Are Disabled Or Unemployed.

Business

Writing

Government

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

Love You

Distraction

Dangerous

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.

Crazy

Sea

People

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

Country

Party

Class

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

Smart

Would Be

Needs

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

Payroll Tax

Office

Looks

You Are Neither Right Nor Wrong Because The Crowd Disagrees With You.

Life

Generosity

Crowds

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

Successful

Lucky

Should

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.

Law

Leader

Peers

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

Three

Boxes

Desks

There's Nothing Inappropriate About Having Debt In America. It's What Helped Us Grow Over Time. And It's When Debt Gets Out Of Control That You Worry.

America

Worry

Debt

Investment Decision Should Be Made On The Basis Of The Most Probable Compounding Of After-tax Net Worth With Minimum Risk.

Decision

Risk

Investment

The Three Most Important Words In Investing...margin Of Safety.

Safety

Important

Three

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.

Baseball

Book

Mean

Honesty Is A Very Expensive Gift, Don't Expect It From Cheap People.

Inspirational

Life

Honesty

Does The Business Have Favourable Long Term Prospects?

Long

Doe

Investing

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

Cost

Treasury

Borrowing

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

Thinking

Play

People

The (stock) Market Is There Only As A Reference Point To See If Anybody Is Offering To Do Anything Foolish. When We Invest In Stocks, We Invest In Businesses.

Offering

Foolish

Ifs

The Key To Life Is To Figure Out Who To Be The Batboy For.

Keys

Life Is

Figures

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

Opportunity

Errors

Technique

When We Went Crazy, And We Did Go Crazy On Residential Real Estate, It Set Things In Motion That Just - The Dominoes Started Toppling.

Crazy

Real

Estates

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

Kings

People

Doe

With Enough Insider Information And A Million Dollars, You Can Go Broke In A Year.

Years

Dollars

Investing

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

Investing

Buffets

Investment

You Have Hedge Funds And People Like That Buying These Assets To Yield 15 Or 20 Percent, I Mean, That's The Buyer For These People That Are Trying To Unload Them.

Mean

Yield

People

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

People

Kind

Institutions

Wild Swings In Share Prices Have More To Do With The "lemming- Like" Behaviour Of Institutional Investors Than With The Aggregate Returns Of The Company They Own.

Swings

Lemmings

Return

Problems In A Company Are Like Cockroaches In The Kitchen. You Will Never Find Just One

Kitchen

Cockroaches

Problem

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

Long

Investing

Good Times

[gold] Gets Dug Out Of The Ground In Africa, Or Someplace. Then We Melt It Down, Dig Another Hole, Bury It Again And Pay People To Stand Around Guarding It. It Has No Utility. Anyone Watching From Mars Would Be Scratching Their Head.

People

Gold

Would Be

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.

Business

Imagination

Earning

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

Summer

War

Losing

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

Mean

Lows

Volatility

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

Smart

Guy

Way

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

Night

Differences

Emts

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.

Views

Investing

Owners

Too Often, A Vast Collection Of Possessions Ends Up Possessing Its Owner. The Asset I Most Value, Aside From Health, Is Interesting, Diverse, And Long-standing Friends.

Life

Long

Generosity

Possessing A Powerful Worldwide Brand Is Essential For Sustained Success.

Powerful

Essentials

Brands

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

Smart

Investing Money

Effort

I Have No Idea On Timing. It’s Easier To Tell What Will Happen Than When It Will Happen. I Would Say That What Is Going On In Terms Of Trade Policy Is Going To Have Very Important Consequences.

Ideas

Important

Investing

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.

Numbers

People

Important

In That, We Agreed With Andrew Carnegie, Who Said That Huge Fortunes That Flow In Large Part From Society Should In Large Part Be Returned To Society. In My Case, The Ability To Allocate Capital Would Have Had Little Utility Unless I Lived In A Rich, Populous Country In Which Enormous Quantities Of Marketable Securities Were Traded And Were Sometimes Ridiculously Mispriced. And Fortunately For Me, That Describes The U.s. In The Second Half Of The Last Century.

Country

Enormous Quantities

Society

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

Photograph

Should

Unfolding

The Fed Is The Greatest Hedge Fund In History.

Feds

Fund

Hedge Fund

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.

Mean

Years

United States

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

Taken

Years

Should

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

Inspirational

Life

Motivational

Well, I Think The Biggest Mistake Is Not Learning The Habits Of Saving Properly Early. Because Saving Is A Habit. And Then, Trying To Get Rich Quick. It's Pretty Easy To Get Well-to-do Slowly. But It's Not Easy To Get Rich Quick.

Get Well

Mistake

Thinking

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.

Trying

Littles

Here And There

Investing Requires Qualities Of Temperament Way More Than It Requires Qualities Of Intellect.

Quality

Investing

Way

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.

Business

Mean

Night

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.

Mean

Thinking

Dollars

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

Greedy

Fearful

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

Investing

More Money

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

Thinking

Treasury

Secretary

Our Future Rates Of Gain Will Fall Far Short Of Those Achieved In The Past. Berkshire's Capital Base Is Now Simply Too Large To Allow Us To Earn Truly Outsized Returns. If You Believe Otherwise, You Should Consider A Career In Sales But Avoid One In Mathematics.

Believe

Fall

Past

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.

Country

Real

People

The Range Of Derivatives Contracts Is Limited Only By The Imagination Of Man (or Sometimes, So It Seems, Madmen). Say You Want To Write A Contract Speculating On The Number Of Twins To Be Born In Nebraska In 2020. No Problem-at A Price, You Will Easily Find An Obliging Counterparty.

Business

Writing

Men

I Do Not Like Debt And Do Not Like To Invest In Companies That Have Too Much Debt, Particularly Long-term Debt. With Long-term Debt, Increases In Interest Rates Can Drastically Affect Company Profits And Make Future Cash Flows Less Predictable.

Cash Flow

Long

Too Much

What Motivates Most Gold Purchasers Is Their Belief That The Ranks Of The Fearful Will Grow ... As 'bandwagon' Investors Join Any Party, They Create Their Own Truth - For A While.

Party

Gold

Belief

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.

Yesterday

News

Goes On

I Know That Congress Will Do The Right Thing.

Congress

Knows

Right Thing

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.

Thinking

Years

Oxygen

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.

Zero

Real

Years

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

America

Smooth

Paid

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.

Loyalty

Smoking

Dollars

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

Mistake

Decision

Ifs

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

Writing

Love Is

Thinking

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

Business

Nice

Swings

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.

Children

Giving

Rich

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

Moving

Kids

People

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.

Keys

Degrees

Alternatives

The Only Time To Buy These Is On A Day With No 'y' In It.

Funny

Life

Money

... 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.

Should Have

Decision

Important

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

Luxury

I Can

I Would Say That Life At 84, I Am Having As Much Fun As I've Ever Had In My Life. I Mean I Get To Do What I Love Every Day With The People I Love-and It Just Doesn't Get Any Better Than That.

Fun

Mean

People

Never Depend On A Single Source Of Income.

Income

Source

Depends

In The 20th Century, The United States Endured Two World Wars And Other Traumatic And Expensive Military Conflicts; The Depression; A Dozen Or So Recessions And Financial Panics; Oil Shocks; A Flu Epidemic; And The Resignation Of A Disgraced President. Yet The Dow Rose From 66 To 11,497.

Business

Military

War

If I Knew Where I Was Going To Want To Live The Next Five Or 10 Years I Would Buy A Home And I'd Finance It With A 30-year Mortgage... It's A Terrific Deal.

Home

Years

Want

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.

Important

Quality

Needs

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

Country

Years

Form

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.

Trying

Election

Consistently

You Do Things When The Opportunities Come Along. I've Had Periods In My Life When I've Had A Bundle Of Ideas Come Along, And I've Had Long Dry Spells. If I Get An Idea Next Week, I'll Do Something. If Not, I Won't Do A Damn Thing.

War

Opportunity

Investing Money

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.

Moving

Earning

Needs

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.

Mistake

Games

Overcoming

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.

Years

Games

Two

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.

Keys

People

Important

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.

Money

Business

Dollars

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

Easier

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.

Teacher

People

Degrees

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

Emotion

Ifs

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

Littles

Too Much

Buying

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.

Sloth

Style

Boards

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

Journalist

Smarter

Better Off

I Believe The Chance Of Any Event Causing Berkshire To Experience Financial Problems Is Essentially Zero. We Will Always Be Prepared For The Thousand-year Flood; In Fact, If It Occurswe Will Be Selling Life Jackets To The Unprepared.

Zero

Believe

Years

Only Those Who Will Be Sellers Of Equities In The Near Future Should Be Happy At Seeing Stocks Rise. Prospective Purchasers Should Much Prefer Sinking Prices.

Investing

Should

Sinking

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.

Mean

People

Uncertain Times

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

Bigs

Payoff

Certain

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.

Country

Boards

Double Standard

The Investor Of Today Does Not Profit From Yesterday's Growth.

War

Past

Investing Money

Never Test The Depth Of River With Both The Feet.

Inspirational

Rivers

Feet

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

Life

Change

Wise

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

Wells

Harem

Knows

The Market System Rewards Me Outlandishly For What I Do, But That Doesn't Mean I'm Any More Deserving Of A Good Life Than A Teacher Or A Doctor Or Someone Who Fights In Afghanistan.

Teacher

Good Life

Mean

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

Fun

Want

Making Money

I Was Lucky Enough To Be Born In A Time And Place Where Society Values My Talent, And Gave Me A Good Education To Develop That Talent, And Set Up The Laws And The Finanical System To Let Me Do What I Love Doing-and Make A Lot Of Money Doing It. The Least I Can Do Is Help Pay For All That.

Law

Pay

Lucky

...i Will Give You Two Pieces Of Advice. Invest As Much In Yourself As You Can; You Are Your Own Best Asset By Far. Then Follow Your Passion; You Want To Be Really Excited To Get Out Of Bed Every Morning.

Morning

Passion

Two

Always Invest For The Long Term.

Long

Investing

Term

If I Were The Treasury Secretary Or Head Of The Fed, You Know, I Would Try To Scare The Hell The Out Of The Private Sector And Say, You Better Save This Because You're Going Down With The Ship.

Trying

Scare

Ships

I Wouldn't Want To Manufacture Cigarettes. But If I Owned - We Do Own Costco. Do They Sell Them? Yes. So I Don't Have A Problem Owning Stock In That. But I Just Wouldn't Want To - I Wouldn't Want To Do It Myself. I Basically Think, If Anything Is Sufficiently Antisocial, Society Should Do Something About It. But That's A Separate Question. But - And I Don't Think There's Any Company That I Have Seen That's 100 Percent Pure.

Thinking

Problem

Antisocial

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.

Business

School

Thinking

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

Business

Love You

Purpose

We've Got All The Ingredients For A Sensational Future.

Ingredients

Sensational

A Hyperactive Stock Market Is The Pickpocket Of Enterprise.

Investing

Enterprise

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

Truth Is

Concerned

We Still Find Very Few [stocks] That Even Mildly Interest Us. That Dismal Fact Is Testimony To The Insanity Of Valuations Reached During The Great Bubble. Unfortunately, The Hangover May Prove To Be Proportional To The Binge.

Hangover

May

Prove

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.

Mean

Loss

Games

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.

Years

Two

Long

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

Credit

Economy

Wells

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

Buffets

Ends

Owners

Enjoy Your Work And Work For Whom You Admire.

Investing

Admire

Enjoy

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

Running

What Matters

Use

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

Opportunity

Important

Investing

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.

Add

Investing

Way

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

Business Success

Might

Study

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

Wise

Fool

Investment

Understanding Quotes: Their Essence and Application

Quotes, or quotations, are powerful tools in communication, encapsulating ideas, emotions, and wisdom in concise expressions. They serve various purposes across different contexts, from academic writing to everyday conversation.

1. Defining Quotes

A quote is a repetition of someone else's statement or thoughts. It can be a direct replication of words spoken or written by another individual, often used to support arguments, provide evidence, or convey profound insights.

2. The Importance of Quotes

2.1. Enhancing Credibility

Incorporating quotes from authoritative sources can bolster the credibility of your work. By referencing experts or primary sources, you demonstrate thorough research and a solid foundation for your arguments.

2.2. Providing Evidence

Quotes serve as concrete evidence to support claims. In academic and professional writing, they validate points made, offering readers a basis to trust the information presented.

2.3. Conveying Emotions and Perspectives

Quotes can encapsulate emotions and perspectives succinctly. They allow writers to express complex feelings or viewpoints through the words of others, often more eloquently than paraphrasing.

3. Types of Quotes

3.1. Direct Quotes

Direct quotes involve copying the exact words from a source, enclosed in quotation marks. They are used when the original wording is significant or particularly well-expressed.

3.2. Indirect Quotes (Paraphrasing)

Indirect quotes restate the original message in your own words. While not enclosed in quotation marks, they still require proper attribution to the original source.

3.3. Block Quotes

Block quotes are lengthy direct quotations, formatted as a separate block of text. They are typically used for quotes exceeding a certain length, varying by citation style. For instance, in APA style, quotes longer than 40 words are formatted as block quotes.

4. Proper Usage of Quotes

4.1. Contextual Relevance

Ensure that the quote you choose is relevant to the topic and adds value to your content. Avoid inserting quotes solely for decorative purposes.

4.2. Integration into Your Writing

Seamlessly integrate quotes into your writing. Introduce them appropriately and follow up with analysis or commentary to connect them to your main points.

4.3. Attribution and Citation

Always attribute quotes to their original authors and provide proper citations according to the required style guide (APA, MLA, Chicago, etc.).

5. Common Mistakes to Avoid

5.1. Overusing Quotes

Relying too heavily on quotes can overshadow your voice. Use them sparingly to support your arguments, not replace them.

5.2. Lack of Analysis

Presenting a quote without analysis or explanation can leave readers questioning its relevance. Always follow up with your interpretation or discussion.

5.3. Misquoting or Taking Out of Context

Ensure that quotes are accurate and not taken out of context, as this can mislead readers and undermine your credibility.

6. Quotes in Different Contexts

6.1. Academic Writing

In academic writing, quotes are used to support arguments, provide evidence, and engage with existing literature. Proper citation is crucial to avoid plagiarism.

6.2. Journalism

Journalists use quotes to provide firsthand accounts, add authenticity, and present multiple perspectives within a story.

6.3. Literature and Creative Writing

In literature, quotes can be used to convey character voices, themes, and stylistic elements. They enrich narratives and provide depth to storytelling.

7. Punctuation and Formatting

Understanding the correct punctuation and formatting of quotes is essential:

Quotation Marks: Always enclose direct quotes within quotation marks.

Punctuation Placement: In American English, periods and commas are placed inside quotation marks, while colons and semicolons are placed outside.

Block Quotes: For longer quotes, format them as block quotes without quotation marks, and indent the entire block.

8. Ethical Considerations

Ethical use of quotes involves accurate representation, proper attribution, and respect for intellectual property. Misuse can lead to plagiarism, which carries serious academic and professional consequences.

9. Tools for Managing Quotes

Utilize tools like citation generators and plagiarism checkers to manage quotes effectively. These tools help ensure proper formatting and originality in your writing.

Conclusion

Quotes are invaluable in enriching content, providing evidence, and conveying complex ideas succinctly. When used appropriately, they enhance the quality and credibility of your writing. Always ensure relevance, proper integration, and ethical usage to maximize their impact.

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