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Who Would Think Of Buying Or Selling A Private Business Because Of Someone's Guess On The Stock Market? The Availability Of A Quotation For Your Business Interest (stock) Should Always Be An Asset To Be Utilized If Desired. If It Gets Silly Enough In Either Direction, You Take Advantage Of It. Its Availability Should Never Be Turned Into A Livability Whereby Its Periodic Aberrations In Turn Formulate Your Judgements.

-Warren Buffett

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Who Would Think Of

Warren Buffett

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Who Would Think Of Buying Or Selling A Private Business Because Of Someone's Guess On The Stock Market? The Availability Of A Quotation For Your Business Interest (stock) Should Always Be An Asset To Be Utilized If Desired. If It Gets Silly Enough In Either Direction, You Take Advantage Of It. Its Availability Should Never Be Turned Into A Livability Whereby Its Periodic Aberrations In Turn Formulate Your Judgements.

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

You’d Get Very Rich If You Thought Of Yourself As Having A Card With Only Twenty Punches In A Lifetime, And Every Financial Decision Used Up One Punch. You’d Resist The Temptation To Dabble. You’d Make More Good Decisions And You’d Make More Big Decisions.

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.

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.

I Think That Trying To Invest Through 535 People Is A Tough Job, You Know, And So I Would Give More Latitude.

Goldman Sachs Saying They Might Be Interested In Such An Investment. I'm Familiar With The Company. I've Known The Management, The Current Management, Jack Welch Before Jeff Immelt. I've Known Him For Decades.

I Bought A Company In The Mid-90s Called Dexter Shoe And Paid $400 Million For It. And It Went To Zero. And I Gave About $400 Million Worth Of Berkshire Stock, Which Is Probably Now Worth $400 Billion. But I've Made Lots Of Dumb Decisions. That's Part Of The Game.

Of One Thing Be Certain: If A Ceo Is Enthused About A Particularly Foolish Acquisition, Both His Internal Staff And His Outside Advisors Will Come Up With Whatever Projections Are Needed To Justify His Stance. Only In Fairy Tales Are Emperors Told That They Are Naked.

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

American Workers

Never Give Up Searching For The Job That You're Passionate About.

Doing What You Love

Today People Who Hold Cash Equivalents Feel Comfortable. They Shouldn't. They Have Opted For A Terrible Long-term Asset, One That Pays Virtually Nothing And Is Certain To Depreciate In Value.

Money Will Always Flow Toward Opportunity, And There Is An Abundance Of That In America.

We've Seen What Can Be Accomplished When We Use 50% Of Our Human Capacity. If You Visualize What 100% Can Do, You'll Join Me As An Unbridled Optimist About America's Future.

If You Own The Only Newspaper In Town, Up Until The Last Five Years Or So, You Have Pricing Power And You Didn't Have To Go To The Office.

People Will Always Try To Stop You From Doing The Right Thing If It Is Unconventional.

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.

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

Writing A Check Separates A Commitment From A Conversation.

Do Not Put All Your Eggs In One Basket.

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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.

One Observer Commenting On Security Analysts Over Forty Stated: "they Know Too Many Things That Are No Longer True." As Long As I Am "on Stage", Publishing A Regular Record And Assuming Responsibility For Management Of What Amounts To Virtually 100% Of The Net Worth Of Many Partners, I Will Never Be Able To Put Sustained Effort Into Any Non-bpl Activity. If I Am Going To Participate Publicly. I Can't Help Being Competitive. I Know I Don't Want To Be Totally Occupied With Out-pacing An Investment Rabbit All My Life. The Only Way To Slow Down Is To Stop.

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

Never Depend On Single Income. Make Investment To Create A Second Source.

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

Focus On Your Customers And Lead Your People As Though Their Lives Depend On Your Success.

Growth And Value Investing Are Joined At The Hip.

Economic Medicine That Was Previously Meted Out By The Cupful Has Recently Been Dispensed By The Barrel. These Once Unthinkable Dosages Will Almost Certainly Bring On Unwelcome After-effects. Their Precise Nature Is Anyone's Guess, Though One Likely Consequence Is An Onslaught Of Inflation.

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.

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

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

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

Inspirational Life

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.

I Was Lucky To Have The Right Heroes. Tell Me Who Your Heroes Are And I'll Tell You How You'll Turn Out To Be. The Qualities Of The One You Admire Are The Traits That You, With A Little Practice, Can Make Your Own, And That, If Practiced, Will Become Habit Forming.

If You Understood A Business Perfectly And The Future Of The Business, You Need Very Little In The Way Of A Margin Of Safety.

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

The Time To Buy Stocks Is Consistently Over Time. You Should Never Buy Your Investments With The Idea, 'i Have To Get A Certain Return.' You Should Look At The Best Return Possible And Learn To Live With That. But You Should Not Try To Make Your Investments Earn What You Feel You Need. It Doesn't Work That Way. The Stock Doesn't Know You Own 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?

The Best Investment You Can Make, Is An Investment In Yourself... The More You Learn, The More You'll Earn.

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

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

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

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

Well, It May Be All Right In Practice, But It Will Never Work In Theory

You Don't Ever Ask A Barber Whether You Need A Haircut.

The First Rule Is Not To Lose. The Second Rule Is Not To Forget The First Rule.

Americans Are In A Cycle Of Fear Which Leads To People Not Wanting To Spend And Not Wanting To Make Investments, And That Leads To More Fear. We'll Break Out Of It. It Takes Time.

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

Our Favorite Holding Period Is Forever.

Funny Inspirational

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

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.

Investors Should Be Skeptical Of History-based Models. Constructed By A Nerdy-sounding Priesthood Using Esoteric Terms Such As Beta, Gamma, Sigma And The Like, These Models Tend To Look Impressive. Too Often, Though, Investors Forget To Examine The Assumptions Behind The Models. Beware Of Geeks Bearing Formulas.

Is Management Rational?

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

My Favorite Time Frame For Holding A Stock Is Forever.

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.

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

Managers Thinking About Accounting Issues Should Never Forget One Of Abraham Lincoln's Favorite Riddles: How Many Legs Does A Dog Have, If You Call A Tail A Leg? The Answer: Four, Because Calling A Tail A Leg Doesn't Make It A Leg.

The Rich Are Always Going To Say That, You Know, Just Give Us More Money And We'll Go Out And Spend More And Then It Will All Trickle Down To The Rest Of You. But That Has Not Worked The Last 10 Years, And I Hope The American Public Is Catching On.

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

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

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

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

It's Never Paid To Bet Against America.

We Make Investment Decisions Based On Our Evaluation Of The Most Profitable Combination Of Probabilities.

The Future Is Never Clear; You Pay A Very High Price In The Stock Market For A Cheery Consensus. Uncertainty Actually Is The Friend Of The Buyer Of Long-term Values.

If You've Been Playing Poker For Half An Hour And You Still Don't Know Who The Patsy Is, You're The Patsy.

If You Buy Things You Do Not Need, Soon You Will Have To Sell Things You Need.

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

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

If You've Got A Good Enough Business, If You Have A Monopoly Newspaper, If You Have A Network Television Station - I'm Talking Of The Past - You Know, Your Idiot Nephew Could Run It. And If You've Got A Really Good Business, It Doesn't Make Any Difference.

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.

As Far As You Are Concerned, The Stock Market Does Not Exist. Ignore It.

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.

I've Learned Mainly By Reading Myself. So I Don't Think I Have Any Original Ideas. Certainly, I Talk About Reading Graham. I've Read Phil Fisher. So I've Gotten A Lot Of My Ideas From Reading. You Can Learn A Lot From Other People. In Fact, I Think If You Learn Basically From Other People, You Don't Have To Get Too Many New Ideas On Your Own. You Can Just Apply The Best Of What You See.

I Would Say It's More Important Who The Treasury Secretary Is Than Who The Vice President Is. If You Want To Have A Debate Here, I'd Like A Debate Between Potential Treasury Secretaries Than The Vice Presidential Debate.

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

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.

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.

If You Invested In A Very Low Cost Index Fund - Where You Don't Put The Money In At One Time, But Average In Over 10 Years -you'll Do Better Than 90% Of People Who Start Investing At The Same Time.

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.

If You Own A Wonderful Business...the Best Thing To Do Is Keep It. All You're Going To Do Is Trade Your Wonderful Business For A Whole Bunch Of Cash, Which Isn't As Good As The Business, And You Got The Problem Of Investing In Other Businesses, And You Probably Paid A Tax In Between. So My Advice To Anybody Who Owns A Wonderful Business Is Keep It.

While The Poor And Middle Class Fight For Us In Afghanistan, And While Most Americans Struggle To Make Ends Meet, We Mega-rich Continue To Get Our Extraordinary Tax Breaks.

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

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.

If You Want A Government That's Going To Do The Things We Ask Our Government To Do, You've Got To Get It From Somebody.

Turnarounds Seldom Turn.

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

Accounting Is The Language Of Business.

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

Mr. Market Is Kind Of A Drunken Psycho. Some Days He Gets Very Enthused, Some Days He Gets Very Depressed. And When He Get Really Enthused You Sell To Him, And If He Gets Depressed, You Buy From Him. There's No Moral Taint Attached To That.

It's Class Warfare, My Class Is Winning, But They Shouldn't Be.

Every Company That Has An Economist Working For Him Has One Employee Too Many.

[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.

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

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.

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.

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

Investing Money

I Make No Effort To Predict The Course Of General Business Or The Stock Market. Period. However, Currently There Are Practices Snowballing In The Security Markets And Business World Which, While Devoid Of Short Term Predictive Value, Bother Me As To Possible Long Term Consequences.

To Be Successful, You Should Concentrate On The World Of Companies, Not Arcane Accounting Mathematics.

If You Can Tell Me Who Your Heroes Are, I Can Tell You How You're Going To Turn Out In Life.

In My Opinion, The Entire Field Of Investment Management, Involving Hundreds Of Billions Of Dollars, Would Be More Satisfactorily Conducted If Everyone Had A Good Yardstick For Measurement Of Ability And Sensibly Applied It.

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

You Have To Turn Over A Lot Of Rocks To Find Those Little Anomalies. You Have To Find The Companies That Are Off The Map - Way Off The Map.

If You Can't Read The Scoreboard. You Don't Know The Score. If You Don't Know The Score, You Can't Tell The Winners From The Losers.

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.

The Best Thing I Did Was Choose The Right Heroes.

In Fact, In My Adult Lifetime, I Don't Think I've Ever Seen People As Fearful Economically As They Are Right Now.

The 19th Century Belonged To England, The 20th Century Belonged To The U.s., And The 21st Century Belongs To China. Invest Accordingly.

If Book Knowledge Made Great Investors, Than The Librarians Would All Be Rich.

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

I Don't Need 15 Houses. Owning Real Estate Doesn't Mean Much To Me. I Don't Like To Think About Things Like That. I Don't Need 12 Boats, Or Even The World's Largest Boat With A Crew Of 80. I'd Have To Take Care Of Them, To Worry About Them. I Get A Lot More Fun Out Of Life Without All The Bells And Whistles.

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

Franklin Delano Roosevelt

The Big Question About How People Behave Is Whether They've Got An Inner Scorecard Or An Outer Scorecard. It Helps If You Can Be Satisfied With An Inner Scorecard.

Nothing Sedates Rationality Like Large Doses Of Effortless Money.

Investing Money

There Is No Staff. I Make All The Investment Decisions And I Do All My Own Analysis.

Never Risk What You Have And Need For What We Don't Have And Don't Need.

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

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.

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.

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.

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

A Stock Doesn't Know That You Own It.

Our Marketable Equities Tell Us By Their Operating Results - Not By Their Daily, Or Even Yearly, Price Quotations - Whether Our Investments Are Successful. The Market May Ignore Business Success For A While, But Eventually Will Confirm It.

Business Success

First Come The Innovators, Then Come The Imitators, Then Come The Idiots.

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.

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.

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.

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

This Country Is Going - Be Living Better Ten Years From Now Than It Is Now. It Will Be Living Better In 20 Years From Now Than Ten Years From Now. The Ingredients That Made This Country, You Know, The Miracle Of The World - I Mean We Had A Seven For One Improvement In The Average American Standard Of Living In The 20th Century.

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.

A Hyperactive Stock Market Is The Pickpocket Of Enterprise.

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

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

I Knew A Lot About What I Did When I Was 20. I Had Read A Lot, And I Aspired To Learn Everything I Could About The Subject.

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.

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

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

Investing Money

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

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.

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.

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

There's Not Many Businesses Where Someone Can Come In And Offer To Cut The Price In Half And Somebody Doesn't Think About Shifting. But That's The Nature Of The Ratings Business.

We Don't Have To Be Smarter Than The Rest. We Have To Be More Disciplined Than The Rest.

Successful Investing

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

In The End, Alchemy, Whether It Is Metallurgical Or Financial, Fails. A Base Business Can Not Be Transformed Into A Golden Business By Tricks Of Accounting Or Capital Structure. The Man Claiming To Be A Financial Alchemist May Become Rich. But Gullible Investors Rather Than Business Achievements Will Usually Be The Source Of His Wealth.

The .350 Hitter Expects, And Also Deserves, A Big Payoff For His Performance - Even If He Plays For A Cellar-dwelling Team. And A .150 Hitter Should Get No Reward - Even If He Plays For A Pennant Winner.

I Spend Twelve Hours A Week - A Little Over 10% Of My Waking Hours - Playing The Game. Now I Am Trying To Figure Out How To Get By On Less Sleep In Order To Fit In A Few More Hands.

You Don't Need To Have Extraordinary Effort To Achieve Extraordinary Results. You Just Need To Do The Ordinary, Everyday Things Exceptionally Well.

Everyday Things

When Berkshire Hathaway Laid Out Three Billion Dollars For Ge Today, We Didn't Spend It, We Invested It. When The Federal Government Buys The Mortgages, They're Not Spending It, They're Investing It. Now, They're Investing It In Distress Type Assets But They're Buying Them At Distress Prices If They Buy Them At Market. It's The Kind Of Stuff I Love To Do. I Just Don't Have 700 Million. Maybe We Could Go In It Together.

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

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

We Don't Get Paid For Being Busy, We Get Paid For Being Right.

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

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

A Pin Lies In Wait For Every Bubble. And When The Two Eventually Meet, A New Wave Of Investors Learns Some Very Old Lessons: First, Many In Wall Street (a Community In Which Quality Control Is Not Prized) Will Sell Investors Anything They Will Buy. Second, Speculation Is Most Dangerous When It Looks Easiest.

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.

It's Going To Be Tough Because The Economy Is Going To Be Getting Worse For A While. And It Might Fall Off A Cliff If This Doesn't Pass. But Nobody Will Ever Know That If It Does.

We All Make Mistakes. If You Can't Make Mistakes, You Can't Make Decisions. I've Made A Lot Bigger Mistakes Myself.

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

Intrinsic Value

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.

There Is One Thing Of Which I Can Assure You. If Good Performance Of The Fund Is Even A Minor Objective, Any Portfolio Encompassing One Hundred Stocks (whether The Manager Is Handling One Thousand Dollars Or One Billion Dollars) Is Not Being Operated Logically. The Addition Of The One Hundredth Stock Simply Can't Reduce The Potential Variance In Portfolio Performance Sufficiently To Compensate For The Negative Effect Its Inclusion Has On The Overall Portfolio Expectation.

I'm Putting All My Money In The Chinese Toy Market.

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

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

Intensity Is The Price Of Excellence.

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

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.

When Berkshire Buys Common Stock, We Approach The Transaction As If We Were Buying Into A Private Business.

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

Like I Say, I Don't Think It'll Be Done Perfectly. Maybe We'll End Up With A Little Bit Better [economy] System.

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

Investors Have To Remember: Corporate Profits Are Going Up, But Stocks Are Going Up Faster. How Can That Continue Indefinitely? Investors Can Only Earn What Companies Themselves Can Earn; The Government Or The Markets Themselves Don't Kick Anything In. How Can You Get Anything More Out Of A Farm Than What It Grows?

There Are Three Important Principles To Graham's Approach. [the First Is To Look At Stocks As Fractional Shares Of A Business, Which] Gives You An Entirely Different View Than Most People Who Are In The Market. [the Second Principle Is The Margin-of-safety Concept, Which] Gives You The Competitive Advantage. [the Third Is Having A True Investor's Attitude Toward The Stock Market, Which] If You Have That Attitude, You Start Out Ahead Of 99 Percent Of All The People Who Are Operating In The Stock Market - It's An Enormous Advantage.

The Single Most Important Decision In Evaluating A Business Is Pricing Power.

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

I Have A Wonderful Family. I Have A Job That I Love And Wonderful People Who Help Me With It. It Can't Get Any Better Than That.

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.

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

You Have To Turn Over A Lot Of Rocks To Find Those Little Anomalies. You Have To Find The Companies That Are Off The Map - Way Off The Map. You May Find Local Companies That Have Nothing Wrong With Them At All. A Company That I Found, Western Insurance Securities, Was Trading For $3/share When It Was Earning $20/share!! I Tried To Buy Up As Much Of It As Possible. No One Will Tell You About These Businesses. You Have To Find Them.

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

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.

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

We Intend To Continue Our Practice Of Working Only With People Whom We Like And Admire. This Policy Not Only Maximizes Our Chances For Good Results, It Also Ensures Us An Extraordinarily Good Time.

Emotional Makeup Is More Important Than Technical Skill

It's Got To Be The Best Intellectual Exercise Out There. You're Seeing Through New Situations Every Ten Minutes. In The Stock Market You Don't Base Your Decisions On What The Market Is Doing, But On What You Think Is Rational. Bridge Is About Weighing Gain/loss Ratios. You're Doing Calculations All The Time.

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

The Secret To Happiness Is Having Low Expectations.

Good Profits Simply Are Not Inconsistent With Good Behavior.

Making Money Isn't The Backbone Of Our Guiding Purpose; It Is The By-product Of Our Guiding Purpose.

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

There Seems To Be Some Perverse Human Characteristic That Likes To Make Easy Things Difficult.

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

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

Focus On Return On Equity, Not Earnings Per Share.

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

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

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

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.

In Our View, Derivatives Are Financial Weapons Of Mass Destruction Carrying Dangers That, While Latent, Are Potentially Lethal.

Mass Destruction

If You Are A Professional And Have Confidence, Then I Would Advocate Lots Of Concentration.

Have Confidence

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Michael Schenker

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