Warren Buffett Quotes
You want to learn from experience, but you want to learn from other people's experience when you can.
Investing is putting out money to be sure of getting more money back later at an appropriate rate.
Time is the friend of the wonderful business. It's the enemy of the lousy business. If you're in a lousy business for a long time, you're going to get a lousy result, even if you buy it cheap. If you're in a wonderful business for a long time, even if you pay a little too much going in, you're going to get a wonderful result if you stay in a long time.
This is the source.
History does not tell you the probability of future financial things happening.
This is the source.
I think you're out of your mind if you keep taking jobs that you don't like because you think it will look good on your resume.
This is the source.
I don't want to buy any stock where if they close the New York Stock Exchange tomorrow for five years I won't be happy owning it. I buy a farm and I don't get a quote on it for five years and I'm happy if the farm does ok. I buy an apartment house, don't get a quote on it for five years - I'm happy if the apartment house produces the returns that I expect. But people buy a stock and they look at the price the next morning and they decide if they're doing well or not doing well. It's crazy because they're buying a piece of a business.
This is the source.
The value of a business is the cash it's going to produce in the future.
This is the source.
When a management team with a reputation for brilliance joins a business with poor fundamental economics, it is the reputation of the business that remains intact.
Never ask a barber if you need a haircut.
I am a better investor because I am a businessman and a better businessman because I am an investor.
You can do pretty dumb things when you've got a big checkbook.
You try to be greedy when others are fearful and you try to be very fearful when others are greedy.
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.
Rule number one: never lose money. Rule number two: never forget rule number one.
The very term "value investing" is redundant. What is investing if it is not the act of seeking value at least sufficient to justify the amount paid? Consciously paying more for a stock than its calculated value - in the hope that it can soon be sold for a still-higher price - should be labeled speculation (which is neither illegal, immoral nor -- in our view -- financially fattening).
We select our marketable equity securities in much the way we would evaluate a business for acquisition in its entirety. We want businesses to be one (a) that we can understand; (b) with favorable long-term prospects; (c) operated by honest and competent people; and (d) available at a very attractive price.
Everybody's got a different circle of competence. The important thing is not how big the circle is. The important thing is staying inside the circle.
This is the context.
It's your responsibility if you're buying it. And there's got to be a reason. And if you can't state the reason, you shouldn't buy it.
What you really want to do in investments is figure out what's important and knowable. If it's unimportant or unknowable you forget about it.
The disadvantage of being in any kind of a market type environment - and Wall Street would be the extreme - is that you get over stimulated. You think you have to do something every day.
What you're looking for is some way to get one good idea a year, and then ride it to its full potential. And that's very hard to do in an environment where people are shouting prices back and forth every five minutes.
What we really want to do is buy businesses that we would be happy to own forever.
We never buy something with a price target in mind.
The way to look at a business is, "Is this going to keep producing more, and more, and more money over time?" And if the answer to that is yes, you don't need to ask any more questions.
Money, to some extent, sometimes lets you be in more interesting environments. But it can't change how many people love you or how healthy you are.
Book value is an accounting concept, recording the accumulated financial input from both contributed capital and retained earnings. Intrinsic business value is an economic concept, estimating future cash output discounted to present value. Book value tells you what has been put in; intrinsic business value estimates what can be taken out.
The primary test of managerial economic performance is the achievement of a high earnings rate on equity capital employed (without undue leverage, accounting gimmickry, etc.) and not the achievement of consistent gains in earnings per share.
We do not view the company itself as the ultimate owner of our business assets but instead view the company as a conduit through which our shareholders own the assets.
To invest successfully over a lifetime does not require a stratospheric IQ, unusual business insights, or inside information. What's needed is a sound intellectual framework for making decisions and the ability to keep emotions from corroding that framework.
The sillier the market's behavior, the greater the opportunity for the business-like investor.
The market, like the Lord, helps those who help themselves. But unlike the Lord, the market does not forgive those who know not what they do.
Beware the investment activity that produces applause; the great moves are usually greeted by yawns.
What you're doing when you invest is deferring consumption and laying money out now to get more money back at a later time. And there are really only two questions. One is how much you're going to get back, and the other is when.
Wall Street is the only place people ride to in a Rolls-Royce to get advice from people who ride the subway.
If someone goes through life and measures themselves solely by how much money they have, or how much money they earned last year, sooner or later they're going to end up in trouble.
I want employees to ask themselves whether they are willing to have any contemplated act appear the next day on the front page of their local paper, to be read by their spouses, children, and friends, with the reporting done by an informed and critical reporter.
The ideal business is one that earns very high returns on capital and that keeps using lots of capital at those high returns. That becomes a compounding machine.
When you get to my age, you'll really measure your success in life by how many of the people you want to have love you actually do love you.
I know people who have a lot of money, and they get testimonial dinners and they get hospital wings named after them. But the truth is that nobody in the world loves them. If you get to my age in life and nobody thinks well of you, I don't care how big your bank account is, your life is a disaster.
That's the ultimate test of how you have lived your life. The trouble with love is that you can't buy it. You can buy sex. You can buy testimonial dinners. You can buy pamphlets that say how wonderful you are. But the only way to get love is to be lovable. It's very irritating if you have a lot of money. You'd like to think you could write a check: I'll buy a million dollars' worth of love. But it doesn't work that way. The more you give love away, the more you get.
Life is like a snowball. The important thing is finding wet snow and a really long hill.
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.
If principles can become dated, they're not principles.
The arithmetic makes it plain that inflation is a far more devastating tax than anything that has been enacted by our legislature. The inflation tax has a fantastic ability to simply consume capital. It makes no difference to a widow with her savings in a 5 percent passbook account whether she pays 100 percent income tax on her interest income during a period of zero inflation or pays no income taxes during years of 5 percent inflation. Either way, she is 'taxed' in a manner that leaves her no real income whatsoever. Any money she spends comes right out of capital. She would find outrageous a 120 percent income tax but doesn't seem to notice that 5 percent inflation is the economic equivalent.
Investing in a market where people believe in efficiency is like playing bridge with someone who has been told it doesn't do any good to look at the cards.
In the short run, the market is a voting machine; in the long run, it's a weighing machine.
The dumbest reason in the world to buy a stock is because it's going up.
Most people get interested in stocks when everyone else is. The time to get interested is when no one else is.
Great investment opportunities come around when excellent companies are surrounded by unusual circumstances that cause the stock to be mis-appraised.
In investments, there's no such thing as a called strike. You can stand there at the plate and the pitcher can throw a ball right down the middle; and if it's General Motors at 47 and you don't know enough to decide on General Motors at 47, you let it go right on by and no one's going to call a strike. The only way you can have a strike is to swing and miss.
When managers want to get across the facts of the business to you, it can be done within the rules of accounting. Unfortunately, when they want to play games, at least in some industries, it can also be done within the rules of accounting. If you can't recognize the differences, you shouldn't be in the equity-picking business.
It's not impossible to write [an accounting] footnote explaining deferred acquisition costs in life insurance or whatever you want to do. You can write it so you can understand it. If it's written so you can't understand it, I'm very suspicious. I won't invest in a company if I can't understand the footnote because I know they don't want me to understand it.
Whenever I read about some company undertaking a cost-cutting program, I know it's not a company that really knows what costs are all about. Spurts don't work in this area. The really good manager does not wake up in the morning and say, "This is the day I'm going to cut costs," any more than he wakes up and decides to practice breathing.
You should invest in a business that even a fool can run, because someday a fool will.
I like a business that, when it's not managed at all, still makes a lot of money. That's my kind of business.
Diversification is a protection against ignorance. It makes very little sense for those who know what they're doing.
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.
My favorite time frame for holding a stock is forever.
Stocks are simple. All you do is buy shares in a great business for less than the business is intrinsically worth, with managers of the highest integrity and ability. Then you own those shares forever.
I have an ideal life. I get to do what I want to do everyday. And money can't buy any more than that.
In investing, just as in baseball, to put runs on the scoreboard, one must watch the playing field, not the scoreboard.
You can change behavior by incentives, but you can't usually change behavior by sermons, although people try every Sunday.
If you want to know one question to ask in terms of determining whether somebody's got a good business or not, just ask them whether they can raise prices tomorrow.
Too often, a vast collection of possessions ends up possessing its owner. The asset I most value, aside from health, is interesting, diverse, and long-standing friends.
Once you can take care of yourself and your family and everything you need, beyond that it's [wealth] a bunch of claim checks. If you think about money, it's a claim check on other people's products and services. When you've got enough to take care of yourself, more claim checks don't do you any good. But they can do a lot of good for all kinds of other people.
Fear spreads fast, it is contagious. Doesn't have anything to do with IQ. Confidence only comes back one at a time, not en masse. There are periods when fear paralyzes the investment world. You don't want to owe money at that time, and if you have money then you want to buy at those times.
Stock prices will always be far more volatile than cash-equivalent holdings. Over the long term, however, currency-denominated instruments are riskier investments – far riskier investments – than widely-diversified stock portfolios that are bought over time and that are owned in a manner invoking only token fees and commissions. That lesson has not customarily been taught in business schools, where volatility is almost universally used as a proxy for risk. Though this pedagogic assumption makes for easy teaching, it is dead wrong: Volatility is far from synonymous with risk. Popular formulas that equate the two terms lead students, investors and CEOs astray.
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