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Suppose That An Investor You Admire And Trust Comes To You With An Investment Idea. This Is A Good One, He Says Enthusiastically. I'm In It, And I Think You Should Be, Too.

-Warren Buffett

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Suppose That An Investor

Warren Buffett

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Suppose That An Investor You Admire And Trust Comes To You With An Investment Idea. This Is A Good One, He Says Enthusiastically. I'm In It, And I Think You Should Be, Too.

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More From Warren Buffett

America Should Stand For More Than Just Wealth.

Mr. Market Is Your Servant, Not Your Guide.

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

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.

Let Only Individuals Contribute - With Sensible Limits Per Election. Otherwise, We Are Well On Our Way To Ensuring That A Government Of The Moneyed, By The Moneyed, And For The Moneyed Shall Not Perish From The Earth.

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

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.

Beware [of] The Investment Activity That Produces Applause; The Great Moves Are Usually Greeted By Yawns.

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

People Should Always Know Better.

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

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

Enjoy Your Work And Work For Whom You Admire.

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.

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

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.

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

My Favorite Time Frame For Holding A Stock Is Forever.

Someone's Sitting In The Shade Today Because Someone Planted A Tree A Long Time Ago. The Person Sitting In The Shade Now Should Be Grateful For The Person Who Planted And Tended That Tree. That Includes All Those Benefactors Of Humanity Throughout History That Created, Invented, Financed, Produced, Maintained And Improved All That We Enjoy Today.

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.

We Don't Read Other People's Opinions. We Want To Get The Facts, And Then Think.

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.

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

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.

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

The Most Important Investment You Can Make Is In Yourself. Very Few People Get Anything Like Their Potential Horsepower Translated Into The Actual Horsepower Of Their Output In Life. Potential Exceeds Realization For Many People...the Best Asset Is Your Own Self. You Can Become To An Enormous Degree The Person You Want To Be.

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

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.

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.

Well, One Time Some Attractive Woman Sat Next To Charlie And Asked Him What He Owed His Success To, And, Unfortunately, She Insisted On A One Word Answer. He Had A Speech Prepared That Would Have Gone On For Several Hours. But When Forced To Boil It Down To One Word, He Said That Was "rational". You Know, He Comes Equipped For Rationality, And He Applies It In Business. He Doesn't Always Apply It Elsewhere, But He Applies It In Business And That Has Made Him A Huge Business Success.

Business Success

I've Argued With The Senators And Congressmen I've Talked To. You Don't Want To Be Too Little Too Late. If You Buy Them At The Right Price, You May Be Buying Two Trillion Of Face Value.

It's Very Important That The Determination Of The Us Congress To Do What Is Is Needed Be Made Evident This Week And By The Actions Of Most Of The Members. I Mean, You're Not Going To Get Total Assent.

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

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.

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

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

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

I Won't Close Down A Business Of Subnormal Profitability Merely To Add A Fraction Of A Point To Our Corporate Returns. I Also Feel It Inappropriate For Even An Exceptionally Profitable Company To Fund An Operation Once It Appears To Have Unending Losses In Prospect. Adam Smith Would Disagree With My First Proposition And Karl Marx Would Disagree With My Second; The Middle Ground Is The Only Position That Leaves Me Comfortable.

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.

In A Bull Market, One Must Avoid The Error Of The Preening Duck That Quacks Boastfully After A Torrential Rainstorm, Thinking That Its Paddling Skills Have Caused It To Rise In The World. A Right-thinking Duck Would Instead Compare Its Position After The Downpour To That Of The Other Ducks On The Pond.

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

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.

We Only Want To Link Up With People Whom We Like, Admire, And Trust. ... We Do Not Wish To Join With Managers Who Lack Admirable Qualities, No Matter How Attractive The Prospects Of Their Business. We've Never Succeeded In Making A Good Deal With A Bad Person.

Never Give Up Searching For The Job That You’re Passionate About. Try To Find The Job You’d Have If You Were Independently Rich. Forget About The Pay. When You’re Associating With The People That You Love, Doing What You Love, It Doesn’t Get Any Better Than That.

Doing What You Love

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.

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

Look For Companies With High Profit Margins.

My Job Is Essentially Just Corralling More And More And More Facts And Information, And Occasionally Seeing Whether That Leads To Some Action.

Money Is Not Everything. Make Sure You Earn A Lot Before Speaking Such Nonsense.

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

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

Failure Comes From Ego, Greed, Envy, Fear, Imitation. I Have Success Not Because I Am Smart, But Because I Am Rational.

So Smile When You Read A Headline That Says "investors Lose As Market Falls." Edit It In Your Mind To "disinvestors Lose As Market Falls-but Investors Gain." Though Writers Often Forget This Truism, There Is A Buyer For Every Seller And What Hurts One Necessarily Helps The Other. (as They Say In Golf Matches: "every Putt Makes Someone Happy.")

Always Invest For The Long Term.

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

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

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

Emotional Makeup Is More Important Than Technical Skill

Traditional Wisdom Is Long On Tradition And Short On Wisdom.

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

When It's Raining Gold, Reach For A Bucket, Not A Thimble.

The Fed Is The Greatest Hedge Fund In History.

It Makes A Difference Who The Treasury Secretary Is.

Making A Difference

I Always Say That In Investing You Want To Buy Stock In A Company That Has A Business That's So Good That An Idiot Can Run It, Because Sooner Or Later One Will. We Have A Country Like That.

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.

When We Own Portions Of Outstanding Businesses With Outstanding Managements, Our Favorite Holding Period Is Forever.

Investing Money

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.

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.

Bad Terminology Is The Enemy Of Good Thinking.

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

It's Just That I Landed Up In A Terrific Capitalist System. One That Pays People Who Allocate Capital Extraordinarily Well. Intrinsically, I'm Not Worth As Much As Somebody Who Invents Something That Could Improves People's Life, Or Health Or Whatever.

A Stock Doesn't Know That You Own It.

If You're An Investor, You're Looking On What The Asset Is Going To Do, If You're A Speculator, You're Commonly Focusing On What The Price Of The Object Is Going To Do, And That's Not Our Game.

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

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

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.

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

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.

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

Never Invest In A Business You Can't Understand

We Can Afford To Lose Money - Even A Lot Of Money. But We Can't Afford To Lose Reputation - Even A Shred Of Reputation.

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

Confidence Is Key. You're Not Going To Put Your Money - You're Not Going To Leave Your Money With Me Unless You're Confident I'm Going To Give It Back To You.

Confidence Is Key

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

[people] Have Seen The Credit Market Seize Up. They're Worried About Money Market Funds, Although The Latest Proposition From Government Should Take Care Of That. They've Seen Eight Percent Of The Bank Deposits In The United States Get Moved Very Skillfully, I Might Say, Within The Last Couple Of Weeks From Institutions That They Thought Were Fine A Few Months Ago To Other Institutions. They Are Not Wrong To Be Worried.

We Are Trading Away A Little Bit Of Our Country All The Time For This Access Consumption That We Have Over What We've Produced. That Is Not Good. I Think It's Terrible Over Time. But Our Country's Productive Grows Enough So We Actually Can Do That, And We'll Still Be Better Off. We Just Don't Be As Well Off As If We Hadn't Done It.

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.

Enormous Quantities

The Best Investment You Can Make Is In Yourself.

Investment Success

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

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

I Don't Want To Hold Out False Hopes That The - By Some Magic Moment, That Things Will Turn Around In A Couple Months Because They Wouldn't, Charlie. I Mean, And It's A Big Mistake To Try And Mislead People.

The Thing To Do Is To Keep Your Mind When The World Around You Is Losing Theirs.

I Never Buy Anything Unless I Can Fill Out On A Piece Of Paper My Reasons. I May Be Wrong, But I Would Know The Answer To That ...i'm Paying $32 Billion Today For The Coca Cola Company Because... If You Can't Answer That Question, You Shouldn't Buy It. If You Can Answer That Question, And You Do It A Few Times, You'll Make A Lot Of Money.

Investing Your Time

It Isn't Given To Man To Be Able To Run A Financial Institution Where Different Interest-rate Scenarios Will Prevail On All Of That So As To Produce Kind Of Smooth, Regular Earnings From A Very Large Base To Start With.

Risk Comes From Not Knowing What You're Doing.

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.

The Stock Market Is A No-called-strike Game. You Don’t Have To Swing At Everything – You Can Wait For Your Pitch.

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

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.

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.

The Good Thing Is, We Have Household Formation In This Country.

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

Successful Investing Takes Time, Discipline And Patience. No Matter How Great The Talent Or Effort, Some Things Just Take Time: You Can't Produce A Baby In One Month By Getting Nine Women Pregnant.

Investing Money

If I Subscribed To The Efficient Market Theory I Would Still Be Delivering Papers

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

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

Investing Money

Larger Sums May Be An Advantage At Some Cases And A Disadvantage At Others.

Very Successful People Say No To Almost Everything.

Investment Success

I Just Think That - When A Country Needs More Income And We Do, We're Only Taking In 15 Percent Of Gdp, I Mean, That - That - When A Country Needs More Income, They Should Get It From The People That Have It.

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

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

Exercise Humility And Restraint.

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

Investing Money

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

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.

[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.

What An Investor Needs Is The Ability To Correctly Evaluate Selected Businesses. Note That Word “selected”: You Don't Have To Be An Expert On Every Company, Or Even Many. You Only Have To Be Able To Evaluate Companies Within Your Circle Of Competence. The Size Of That Circle Is Not Very Important; Knowing Its Boundaries, However, Is Vital.

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

It Is Obvious That The Performance Of A Stock Last Year Or Last Month Is No Reason, Per Se, To Either Own It Or To Not Own It Now. It Is Obvious That An Inability To "get Even" In A Security That Has Declined Is Of No Importance. It Is Obvious That The Inner Warm Glow That Results From Having Held A Winner Last Year Is Of No Importance In Making A Decision As To Whether It Belongs In An Optimum Portfolio This Year.

An Investor Will Succeed By Coupling Good Business Judgment With An Ability To Insulate His Thoughts And Behavior From The Super-contagious Emotions That Swirl About The Marketplace.

If We Have A Strength, It Is In Recognizing When We Are Operating Well Within Our Circle Of Competence And When We Are Approaching The Perimeter.

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

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.

If You Understood A Business Perfectly And The Future Of The Business, You Would Need Very Little In The Way Of A Margin Of Safety. So, The More Vulnerable The Business Is, Assuming You Still Want To Invest In It, The Larger Margin Of Safety You'd Need. If You're Driving A Truck Across A Bridge That Says It Holds 10,000 Pounds And You've Got A 9,800 Pound Vehicle, If The Bridge Is 6 Inches Above The Crevice It Covers, You May Feel Okay, But If It's Over The Grand Canyon, You May Feel You Want A Little Larger Margin Of Safety.

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

The American Worker Is More Productive Than He's Ever Been.

American Workers

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.

The Worst Sort Of Business Is One That Grows Rapidly, Requires Significant Capital To Engender The Growth, And Then Earns Little Or No Money. Think Airlines. Here A Durable Competitive Advantage Has Proven Elusive Ever Since The Days Of The Wright Brothers. Indeed, If A Farsighted Capitalist Had Been Present At Kitty Hawk, He Would Have Done His Successors A Huge Favor By Shooting Orville Down.

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

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

Investing Money

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

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.

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

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.

The Best Thing That Happens To Us Is When A Great Company Gets Into Temporary Trouble...we Want To Buy Them When They're On The Operating Table.

Investing Money

First, Many In Wall Street - A Community In Which Quality Control Is Not Prized - Will Sell Investors Anything They Will Buy.

A Ceo's Behavior Has A Huge Impact On Managers Down The Line.

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.

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.

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

Charlie [munger] And I Are Not Big Fans Of Resumes. Instead, We Focus On Brains, Passion And Integrity.

A Contrarian Approach Is Just As Foolish As A Follow-the-crowd Strategy. What's Required Is Thinking Rather Than Polling.

I Mean, You Know, You're Not Going To Change The Human Animal. And The Human Animal Really Doesn't Get A Lot Smarter.

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

We Need A Tax System That Essentially Takes Very Good Care Of The People Who Just Really Aren't As Well Adapted To The Market System But Are Nevertheless Doing Useful Things In The Society.

In Other Words, The Percentage Change In Book Value In Any Given Year Is Likely To Be Reasonably Close To That Year's Change In Intrinsic Value.

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

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

My Net Worth Is The Market Value Of Holdings Less The Tax Payable Upon Sale. The Liability Is Just As Real As The Asset Unless The Value Of The Asset Declines (ouch), The Asset Is Given Away (no Comment), Or I Die With It. The Latter Course Of Action Would Appear To At Least Border On A Pyrrhic Victory.

We've Been In A Recession, By Any Common Sense Definition, Because If You Look At The American Public, They've Got 20 Billion - 20 Trillion, I Should Say, Worth Of Residential Homes.

If You’re In The Luckiest One Per Cent Of Humanity, You Owe It To The Rest Of Humanity To Think About The Other 99 Per Cent.

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

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

The Same Things Happen To Quite An Extent Around The Globe. I Mean, The European Banks Were Doing What The American Banks Were.

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.

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

I Would Say The Most Satisfying Thing Actually Is Watching My Three Children Each Pick Up On Their Own Interests And Work Many More Hours Per Week Than Most People That Have Jobs At Trying To Intelligently Give Away That Money In Fields That They Particularly Care About.

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

I Mean, You May Be Very Mad At Some Guy That Walked Away With A Huge Golden Parachute, But That Really Isn't The Important Thing.

...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.

I've Never Been Very Fully Employed Either.

We Believe That According The Name 'investors' To Institutions That Trade Actively Is Like Calling Someone Who Repeatedly Engages In One-night Stands A 'romantic.'

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.

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

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

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

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

I Think The Oversight Is Great, And I Think That Oversight Ought To Be Devoted Almost Entirely To The Question Is This Being Done At Market You Know. In Other Words, You Want To Make Sure That The Government Isn't Investing Foolishly. But You Don't Want To Care About Which Congressional Districts It Goes To Or Whether Banks Get Favored Over.

If You Want To Shoot Rare, Fast-moving Elephants, You Should Always Carry A Loaded Gun.

The Banking Business Is No Favorite Of Ours. When Assets Are Twenty Times Equity - A Common Ratio In This Industry - Mistakes That Involve Only A Small Portion Of Assets Can Destroy A Major Portion Of Equity. And Mistakes Have Been The Rule Rather Than The Exception At Many Major Banks.

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.

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

An Investor Needs To Do Very Few Things Right As Long As He Or She Avoids Big Mistakes.

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

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

When You Get To My Age, You’ll Measure Your Success In Life By How Many Of The People You Want To Have Love You Actually Do Love You. That’s The Ultimate Test Of How You’ve Lived Your Life.

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.

Growth And Value Investing Are Joined At The Hip.

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.

Airline Business

In Our View, Though, Investment Students Need Only Two Well-taught Courses-how To Value A Business, And How To Think About Market Prices. Your Goal As An Investor Should Simply Be To Purchase, At A Rational Price, A Part Interest In An Easily-understandable Business Who's Earnings Are Virtually Certain To Be Materially Higher Five, Ten And Twenty Years From Now.

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.

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

I Am Not In The Business Of Predicting General Stock Market Of Business Fluctuations. If You Think I Can Do This, Or Think It Is Essential To An Investment Program, You Should Not Be In The Partnership.

You Should Look At Stocks As Small Pieces Of Business.

When You're Associating With The People That You Love, Doing What You Love, It Doesn't Get Any Better Than That.

Doing What You Love

Inflation Could Be A Very - Is A Likely Consequence Out Of What's Going On Now.

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.

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

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.

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.

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

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.

I Never Invest In Anything That I Don't Understand.

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.

Intensity Is The Price Of Excellence.

You Don't Need To Be A Rocket Scientist. Investing Is Not A Game Where The Guy With The 160 Iq Beats The Guy With 130 Iq.

Investment Success

We've Actually Been Pretty Good On Exports. I Mean We Are Exporting 12% Of Our Gdp Now Roughly.

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

You Could Take All The Gold That's Ever Been Mined, And It Would Fill A Cube 67 Feet In Each Direction. For What That's Worth At Current Gold Prices, You Could Buy All -- Not Some -- All Of The Farmland In The United States. Plus, You Could Buy 10 Exxon Mobils, Plus Have $1 Trillion Of Walking-around Money. Or You Could Have A Big Cube Of Metal. Which Would You Take? Which Is Going To Produce More Value?

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.

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