Top 968 Quotes & Sayings by Warren Buffett - Page 8

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.

I’ve never believed in risking what my family and friends have and need in order to pursue what they don’t have and don’t need.

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.

So some guy may know how to make money in cocoa beans, but I don't so I just let him have that. But it's got to be something I understand. It's got to be a business with fundamentally good economics. It's got to be a management that I like and trust and admire. And it's got to be a price that makes sense.

Do not take yearly results too seriously. Instead, focus on four or five-year averages.

It's a lot easier to buy things than it is to sell them.

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.

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.

To win, the first thing you have to do is not lose.

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.

Inactivity strikes us as intelligent behavior.

Good profits simply are not inconsistent with good behavior.

The reaction of weak management to weak operations is often weak accounting.

One’s objective should be to get it right, get it quick, get it out and get it over. Your problem won’t improve with age.

He must never forget Charlie's plea: Tell me where I'm going to die, so I'll never go there.

Our policy is to concentrate holdings. We try to avoid buying a little of this or that when we are only lukewarm about the business or its price. When we are convinced as to attractiveness, we believe in buying worthwhile amounts.

I really like my life. I've arranged my life so that I can do what I want.

...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.

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.

There are certain things that cannot be adequately explained to a virgin either by words or pictures.

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.

We really can say no in 10 seconds or so to 90%+ of all the things that come along simply because we have these filters.

[W]e think 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).

You are lucky in life if you have the right heroes. I advise all of you, to the extent you can, to pick out a few heroes

If I subscribed to the efficient market theory I would still be delivering papers

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.

You shouldn't own common stocks if a 50 per cent decrease in their value in a short period of time would cause you acute distress.

So if you are evaluating others (or yourself!) in the investment field, think out some standards - apply them - interpret them.

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.

How do you beat Bobby Fischer? You play him at any game but chess. I try to stay in games where I have an edge.

You can lose leverage, and it's the only way a smart guy can go broke.

An ounce of prevention is worth a pound of cure understated.

It's nice to have a lot of money, but you know, you don't want to keep it around forever. I prefer buying things. Otherwise, it's a little like saving sex for your old age.

I have always cautioned partners that I considered three years a minimum in determining whether we were "performing".

It irritates the hell out of me but you can't buy love.

What's hot today isn't likely to be hot tomorrow. The stock market reverts to fundamental returns over the long run. Don't follow the herd.

Investment must be rational; if you can't understand it, don't do it.

If you don't make mistakes you can't make decisions.

Two rules: 1. Preserve the principal 2. When in doubt, see Rule #1.

A Company should be viewed as an unfolding movie, not as a still photograph

Buy into a company because you want to own it, not because you want the stock to go up.

The best way in my view is to just buy a low-cost index fund and keep buying it regularly over time, because you'll be buying into a wonderful industry, which in effect is all of American industry... People ought to sit back and relax and keep accumulating over time.

My wealth has come from a combination of living in America, some lucky genes, and compound interest.

If you have a harem of 40 women, you never get to know any of them very well.

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.

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.

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.

A market downturn, doesn't bother us. For us and our long term investors, it is an opportunity to increase our ownership of great companies with great management at good prices. Only for short term investors and market timers is a correction not an opportunity.

I like to buy things I can understand. I do a lot of research on things.

A contrarian approach is just as foolish as a follow-the-crowd strategy. What's required is thinking rather than polling.

All day you wait for the pitch you like; then when the fielders are asleep, you step up and hit it.

The fact that people will be full of greed, fear, or folly is predictable. The sequence is not predictable.

Take the job you would take if you were independently wealthy. You're going to do well at it.

Never invest in a business you don't understand.

With each investment you make, you should have the courage and the conviction to place at least ten per cent of your net worth in that stock

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.

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.

When we really sit back with a smile on our face is when we run into a situation we can understand, where the facts are ascertainable and clear, and the course of action obvious.

I'll tell you why I like the cigarette business. It cost a penny to make. Sell it for a dollar. It's addictive. And there's a fantastic brand loyalty.

We would do best in a market where everyone acted foolishly.