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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.
-Warren Buffett
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Long Ago, Sir Isaac

Warren Buffett
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.
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Stars
Business
Loss
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Calculate "owner Earnings" To Get A True Reflection Of Value.
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If You Are Not Willing To Own A Stock For 10 Years, Do Not Even Think About Owning It For 10 Minutes.
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Intelligent
Years
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Smart
Long
Style
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Giving
Soft Drinks
Done
I Have Never Been Able To Understand Why The Tax Comes As Such A Body Blow To Many People Since The Rate On Long-term Capital Gain Is Lower Than On Most Likes Of Endeavor (tax Policy Indicated Digging Ditches Is Regarded As Socially Less Desirable Than Shuffling Stock Certificates).
Blow
Long
People
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.
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Patient
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Long
Effort
The Stockmarket Is A Semi-psychotic Creature Given To Extremes Of Elation And Despair.
Despair
Elation
Psychotic
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Investing
Profit Margin
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Causes
Incredibles
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Economy
Stills
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Intelligent
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Missing
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.
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Swings
Order
We Look For Things I Can Understand. A Lot Of Businesses I Don't Understand.
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I Can
Investment Must Be Rational; If You Can't Understand It, Don't Do It.
Investment
Rational
Ifs
You Can Lose Leverage, And It's The Only Way A Smart Guy Can Go Broke.
Smart
Guy
Way
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.
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People
Portfolios
My Father Was The Best Person I've Ever Known.
Inspirational
Motivational
Father
Never Risk What You Have And Need For What We Don't Have And Don't Need.
Risk
Needs
Mr. Market Is Your Servant, Not Your Guide.
Guides
Servant
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
Every Day That Goes By, I Mean, If You Don't React To Pearl Harbor For A Week Or Two Weeks Or Three Weeks, You're Behind In The War That You Otherwise Would Have Fought.
War
Mean
Two
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.
Children
Believe
Long
Many Stock Options In The Corporate World Have Worked In Exactly That Fashion: They Have Gained In Value Simply Because Management Retained Earnings, Not Because It Did Well With The Capital In Its Hands.
Fashion
Hands
World
There Seems To Be Some Perverse Human Characteristic That Likes To Make Easy Things Difficult.
Life
Nature
War
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.
Average
Years
Numbers
The U.s. Treasury Has Got Borrowing Costs Like Nobody Else Has.
Cost
Treasury
Borrowing
Over The Years, A Number Of Very Smart People Have Learned The Hard Way That A Long String Of Impressive Numbers Multiplied By A Single Zero Always Equals Zero.
Zero
Smart
Years
You Pay A Very High Price In The Stock Market For A Cheery Consensus.
Pay
Consensus
High Prices
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
If Past History Was All There Was To The Game, The Richest People Would Be Librarians.
Life
Change
Wise
If You've Been Playing Poker For Half An Hour And You Still Don't Know Who The Patsy Is, You're The Patsy.
Half
Buffets
Hours
You Know ... You Keep Doing The Same Things And You Keep Getting The Same Result Over And Over Again.
Life
Investing
Investment
Like I Say, I Don't Think It'll Be Done Perfectly. Maybe We'll End Up With A Little Bit Better [economy] System.
Thinking
Done
Littles
You Don't Have To Be A Genius To Invest Well
Genius
Wells
You’ve Gotta Keep Control Of Your Time, And You Can’t Unless You Say No. You Can’t Let People Set Your Agenda In Life.
Life
People
Empowering
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.
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Leader
Peers
Can You Know You Can Have Institutions That Put Curbs On That In Various Ways, And Actually What The Banks, You Know, They Have Various Capital Ratios And That Sort Of Thing, But The Banks Got Around Them, I Mean, They Set Up Sieves And That Sort Of Thing Just To Get More Leverage. People Love Leverage When It's Working. I Mean, It's So Easy To Borrow Money From A Guy At X And Put It Out At X.
Mean
People
Guy
I Know The Country Works Extremely Well. You Know, But When It Isn't Clogged Up.
Country
Wells
Knows
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.
Country
Gum
Worried
Read Ben Graham And Phil Fisher Read Annual Reports, But Don't Do Equations With Greek Letters In Them.
Greek
Investing
Letters
If You Can Tell Me Who Your Heroes Are, I Can Tell You How You're Going To Turn Out In Life.
Life
Hero
Turns
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
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.
Gun
Years
Vices
It Takes 150 Years To Build An Investment Bank And Only Five Minutes To Convince You To Sell Me Preferred Stock In It At A 10% Interest Rate.
Years
Investment
Minutes
I've Made Money Over The Years By Buying Into Good Companies, Run By Good People, At Attractive Prices. And I Don't Try And Make It Out Of Buying Into The Market At One Point And Selling At Another Point.
Running
Years
People
My Idea Of A Group Decision Is To Look In The Mirror.
Mirrors
Ideas
Decision
I Get To Do What I Like To Do Every Single Day Of The Year.
Years
Investing
Buffets
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
People
Triumph
Continually Challenge And Be Willing To Amend Your Best Loved Ideas.
Best Love
Ideas
Challenges
It's A Big Mistake To Try And Mislead People. They Will Turn Around.
Mistake
People
Trying
The Fundamental Basis Of Above-average Performance In The Long Run Is Sustainable Competitive Advantage.
Running
Average
Long
Ignore The Stock Market, Ignore The Economy, And Buy A Business You Understand.
Economy
I Think People - What People Want To Do Is Make [economy] Get Worse.
Thinking
People
Want
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
As Of 1992, In Fact-though The Picture Would Have Improved Since Then-the Money That Had Been Made Since The Dawn Of Aviation By All Of This Country's Airline Companies Was Zero. Absolutely Zero.
Country
Zero
Airline Business
Inflation Could Be A Very - Is A Likely Consequence Out Of What's Going On Now.
Inflation
Consequence
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
Sound Investing Can Make You Very Wealthy If You're Not In Too Big A Hurry
Sound
Investing
Bigs
You Should Look At Stocks As Small Pieces Of Business.
Looks
Pieces
Should
The Capital Gains Tax Is 15 Percent Now. So I Sit There In My Office And I Make A Lot Of Money By Capital Gains, And I Pay 15 Percent, And I Pay No Payroll Tax On It.
Payroll Tax
Office
Gains
It Is More Important To Say "no" To An Opportunity, Than To Say "yes".
Opportunity
Important
Investing
If You Were At Lehman, The Same Thing Happened. If You Were At Aig, The Shareholders Are Getting Creamed On These Things. And Those Shareholders Are Not Just A Bunch Of Big Shots In Wall Street. Those Are Pension Funds, And Those Are Investors All Over The Country. I Wouldn't Worry Too Much About That. Justice Won't Be Perfect On It.
Country
Wall
Perfect
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.
Moving
Taken
Simple
Uncertainty Is The Friend Of The Buyer Of Long Term Values.
Long
Buyers
Term
For Some Reason People Take Their Cues From Price Action Rather Than From Values. Price Is What You Pay. Value Is What You Get.
People
Pay
Buffets
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.
Thinking
Years
Balance
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.
Love You
Successful
College
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
The Stock Market Is Designed To Transfer Money From The Active To The Patient.
Money
Investing
Patient
Buy Companies With Strong Histories Of Profitability And With A Dominant Business Franchise.
Strong
Investing
Company
It's Never Paid To Bet Against America.
America
Paid
Asset-heavy Businesses Generally Earn Low Rates Of Return - Rates That Often Barely Provide Enough Capital To Fund The Inflationary Needs Of The Existing Business, With Nothing Left Over For Real Growth, For Distribution To Owners, Or For Acquisition Of New Businesses
Real
Growth
Return
Money Will Not Change How Healthy You Are Or How Many People Love You.
Life
Love You
People
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.
Needs
Investing
May
I Think That Actually People In My Situation Should Be Paying More Tax.
Thinking
People
Should
The Thing To Do Is To Keep Your Mind When The World Around You Is Losing Theirs.
Mind
Relax
World
I Think The Fdic Was One Of The Great Inventions Of The American.
Thinking
Great Inventions
Invention
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.
Player
Bridges
Investing
I Wouldn’t Mind Going To Jail If I Had Three Cellmates Who Played Bridge
Bridges
Jail
Mind
Investment Philosophy Is The Clear Understanding That By Owning Shares Of Stocks He Owns Businesses, Not Pieces Of Paper.
Philosophy
Understanding
Pieces
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
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.
Stupid
Believe
Thinking
Charlie And I Decided Long Ago That In An Investment Lifetime, It's Too Hard To Make Hundreds Of Smart Decisions. That Judgment Became Ever More Compelling As Berkshire's Capital Mushroomed And The Universe Of Investments That Could Significantly Affect Our Results Shrank Dramatically. Therefore, We Adopted A Strategy That Required Our Being Smart And Not Too Smart At That, Only A Very Few Times. Indeed, We Now Settle For One Good Idea A Year.
Mistake
Smart
Long Ago
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
Focus Alone Is Not Enough; Putting In The Time To Commit Is Also Crucial To Achieve Success.
Focus
Enough
Achieve
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
In The World Of Business, The People Who Are Most Successful Are Those Who Are Doing What They Love.
Life
Successful
Investment Success
An Investor Needs To Do Very Few Things Right As Long As He Or She Avoids Big Mistakes.
Mistake
Long
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 Like To Buy Things I Can Understand. I Do A Lot Of Research On Things.
Research
I Can
Investment Students Need Only Two Well-taught Courses - How To Value A Business And How To Think About Market Prices
Thinking
Two
Needs
[the U.s. Treasury] Can Borrow Basically Unlimited Amounts. They Can Stay There For Years And Years. These Assets Will Be Worth More Money Over Time. So When Merrill Lynch Sells A Bunch Of Mortgage-related Assets At 22 Cents On The Dollar Like They Did A Month Or So Ago, The Buyer Goes - Is Going To Make Money, And He's Going To Make A Lot More Money If It Happens To Be An Institution Like The U.s. Government Which Has Very, Very Cheap Borrowing Costs.
Government
Years
Dollars
Emotional Makeup Is More Important Than Technical Skill
Makeup
Emotional
Skills
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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