Sunday, May 19, 2013

Warren Buffett Quotes

Warren Buffett Quotes:

Money will not change how healthy you are or how many people love you.
Warren Buffett

Don’t gamble, but watch for unusual circumstances. Excellent investment opportunities come about when superior businesses experience a one time event that depresses the stock price in relation to it’s intrinsic value.
Warren Buffett

The future is never clear. You pay a very high price in the stock market for a cheery consensus. Uncertainty is the friend of the buyer of long-term values.
Warren Buffett

Price is what you pay, value is what you get.
Warren Buffett

We don’t get paid for activity, we get paid for being right.
Warren Buffett

I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years. As far as you are concerned, the stock market does not exist. Ignore it. Much success can be attributed to inactivity. Most investors cannot resist the temptation to constantly buy and sell.
Warren Buffett

Buy so well, you don’t have to sell. Don’t buy for 10 minutes.
Warren Buffett

We like to buy businesses; we don’t like to sell them.
Warren Buffett

We think diversification, as practiced generally, makes very little sense for anyone who knows what they are doing. Diversification serves as protection against ignorance.
Warren Buffett

We don’t get into things we don’t understand. We buy very few things, but we buy very big positions. Know what you own, own a few and buy a lot.
Warren Buffett



It is not necessary to do extraordinary things to get extraordinary results.
Warren Buffett

[Over] time, you will find only a few companies that meet these standards. So when you see one that qualifies, you should buy a meaningful amount of stock. You must also resist the temptation to stray from your guidelines. If you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes.
Warren Buffett

[Boat with a leak] Instead of great managers trying to fix the leak and spending all of their time bailing water, they may be better advised to find another boat.
Warren Buffett

I don’t try to jump over seven-foot bars; I just look around for one-foot bars that I can step over.
Warren Buffett

The dumbest reason in the world to buy a stock is because it is going up.
Warren Buffett

Managers of the Berkshire subsidiaries are worth, on average $100 million. They all love what they are doing. Otherwise, they would retire, since they are no longer working for money.
Warren Buffett

Someone is sitting in the shade today because someone planted a tree a long time ago.
Warren Buffett

The way to wealth is as plain as the road to the supermarket. It depends on two words, industry and frugality.
Warren Buffett

In the short run, the market is a voting machine. In the long run, it’s a weighing machine.
Warren Buffett

Praise by name, criticise by category.
Warren Buffett


Speculation is most dangerous when it looks easiest.
Warren Buffett

Everyone who exalts themselves will be humbled and he who humbles himself will be exalted.
Warren Buffett

Cash combined with courage in a crisis is priceless.
Warren Buffett

Basically, 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 loveable. 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 of love. But it doesn’t work that way. The more you give love away, the more you get.
Warren Buffett

[In 2004] Our capital is underutilised now. It’s a painful condition to be in, but not as painful as doing something stupid.
Warren Buffett

A man who tries to carry a cat home by it’s tail will learn a lesson that can be learned in no other way.
Warren Buffett

[On risk management] The time to have considered – and improved – the reliability of New Orleans’s levees was before [Hurricane] Katrina.
Warren Buffett

[Investing in Korea when USD overvalued and Korean companies cheap] They make basic products like steel, cement, flour and electricity. Which people will be buying in 10 years. They have a big market share in Korea which isn’t going to change… This flour company has more than it’s market value in cash, and sells at three times earnings.
Warren Buffett

When you invest, you have to take some risk. The future is always uncertain. I think a group of these stocks will do very well for several years. Some of them may not do well, but as a group they should do well. I could end up owning them for several years.
Warren Buffett

Philanthropy is harder than business. You are tackling important problems that people with intellect and money have tackled in the past and had a tough time solving. So the search for talent in philanthropy should be even more important than the search for talent in investments, where the game is not as tough.
Warren Buffett



You have to think about things that have never happened before. You always want to have plenty of money around.
Warren Buffett

There are always people who say that the rules have changed. But it only looks that way, if the time horizon is too short.
Warren Buffett

The purpose of life is to be loved by as many people as possible among those you want to have love you.
Warren Buffett

The snowball just happens if you’re in the right kind of snow, and that’s what happened with me. I don’t just mean compounding money either. It’s in terms of understanding the world and what kind of friends you accumulate. You get to select over time , and you’ve got to be the kind of person that the snow wants to attach itself to. You’ve go to be your own wet snow, in effect. You’d better be picking up snow as you go along, because you’re not going to be getting back up to the top of the hill again. That’s the way life works.
Warren Buffett

Diversification is a protection against ignorance. It makes very little sense for those who know what they are doing.
Warren Buffett

Doing very little is more profitable.
Warren Buffett

Happiness comes from small improvements, not by getting somewhere once and for all. Being able to add on one room to your house is what makes you happy, not living in a palace.
Warren Buffett

My job is to keep a group of 15-20 managers enthused about what they are doing, because most of them are already wealthy beyond their belief.
Warren Buffett

The inescapable fact is that the value of an asset, whatever it’s character, cannot over the long term grow faster than its earnings.
Warren Buffett

Buffett once was seen picking up a 1 cent piece on an elevator on his way to the office and remarked to the stunned witnesses ‘The beginning of the next billion.’.
Warren Buffett



Charlie and I have not learned how to solve difficult business problems. What we have learned is to avoid them.
Warren Buffett

It’s not that I want money. It’s the fun of making money and watching it grow.
Warren Buffett

The 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. Warren Buffett

Investment is an activity of forecasting the yield on assets over the life of the asset. Speculation is the activity of forecasting the psychology of the market. Warren Buffett

There is also another alternative: Don’t do anything. More fortunes are made by sitting on good securities for years at a time than by active trading. Warren Buffett

The stock market is a no called strike game. You don’t have to swing at everything – you can wait for your pitch. The problem when you’re a money manager is that your fans keep yelling, ‘Swing you bum’. Warren Buffett

We don’t get paid for activity, just for being right. As to how long we’ll wait, we’ll wait indefinitely. Warren Buffett

The most common cause of low prices is pessimism – sometimes 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. Warren Buffett

Price fluctuations are there to provide opportunity to buy wisely when prices fall sharply, other times you would do better to forget the market and pay attention to the operating results of companies. Warren Buffett

In my opinion, investment success will not be produced by arcane formulae, computer programs or signals flashed by the price behaviour of stocks and markets. Rather an investor will succeed by coupling good business judgement with an ability to insulate his thoughts and behaviour from the super-contagious emotions that swirl about the marketplace. In my own efforts to stay insulated, I have found it highly useful to keep Ben’s Mr Market concept firmly in mind. Warren Buffett



If a company’s future cannot be predicted, it cannot be valued. Warren Buffett

I never talk to brokers or analysts. Wall Street is the only place that people who ride to work in a Rolls Royce get advice from those who take the subway. Warren Buffett

Don’t own a stock for 10 minutes if you don’t plan to own it for 10 years. Warren Buffett

Investing is about the study of human nature. Warren Buffett

As one of the Indianapolis ‘500’ winners said: ‘To finish first you must first finish’. Warren Buffett

Investing is not a game where the guy with the 160 IQ beats the guy with the 130 IQ. Warren Buffett

If you believe your gain, weighted for probabilities, considerably exceeds your loss, comparably weighted, you may consciously purchase a risky investment. Warren Buffett

A parent company that owns a subsidiary with superb long-term economics will not sell the company’s ‘crown jewel’. Yet this same CEO will impulsively sell stocks in his personal portfolio with little more logic than ‘You can’t go broke taking a profit’. In our view what makes sense in business also makes sense in stocks. 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. Warren Buffett

Forecasts may tell you a great deal about the forecaster; they tell you nothing about the future. Warren Buffett

Investing Rule Number 1: Never lose money. Investing Rule Number 2: Never forget Rule Number 1. Warren Buffett 
It’s much easier to stay out of trouble now than to get out of trouble later. 
Warren Buffett 

 Risk comes from not knowing what you are doing. 
Warren Buffett 

 I’d be a bum on the street with a tin cup if the markets were always efficient. 
Warren Buffett 

 Mr Market is there to serve you, not to guide you … It will be disastrous if you fall under his influence. 
Warren Buffett 

 Indeed, if you aren’t certain that you understand and can value your business far better than Mr Market, you don’t belong in the game. 
Warren Buffett 

 Price is what you pay, value is what you get. 
Warren Buffett 

 We want managers who tell the truth, and tell themselves the truth – which is more important. 
Warren Buffett 

 In a business selling a commodity type product it’s impossible to be a lot smarter than your dumbest competitor. 
Warren Buffett 

 I would rather have a $10 million business making 15% than a $100 million business making 5%. 
Warren Buffett 

 The trick is, when there is nothing to do, do nothing. 
Warren Buffett 

You don’t get paid for activity. You only get paid for being right. 
Warren Buffett 

 Money, to some extent, sometimes let you be in more interesting environments. But it can’t change how many people love you or how healthy you are. 
Warren Buffett 

 Money is a by-product of doing something I like doing extremely well. 
Warren Buffett 

 What we do is not beyond anybody else’s competence. It is just not necessary to do extraordinary things to get extraordinary results. 
Warren Buffett 

 If principles can become dated, they’re not principles. 
Warren Buffett 

 It has been helpful to me to have tens of thousands (of students) turned out of business schools taught that it didn’t do any good to think. 
Warren Buffett 

 I feel like an oversexed guy in a harem. This is the time to start investing. 
Warren Buffett 

 Valuing a business is part art and part science. 
Warren Buffett 

 Berkshire buys when the lemmings are heading the other way. 
Warren Buffett 

 People would rather be promised a (presumably) winning lottery ticket next week than an opportunity to get rich slowly. 
Warren Buffett 

It’s only when the tide goes out that you learn who’s been swimming naked. 
Warren Buffett 

 You do things when the opportunities come along. I’ve had periods in my life when I’ve had a bundle of ideas come along, and I’ve had long dry spells. If I get an idea next week, I’ll do something. If not, I won’t do a damn thing. 
Warren Buffett 

 You have to think for yourself. It always amazes me how high IQ people mindlessly imitate. I never get good ideas talking to other people. 
Warren Buffett 

 I read annual reports of the company I’m looking at and I read the annual reports of the competitors – that is the main source of material. 
Warren Buffett 

 A stock doesn’t know you own it. 
Warren Buffett 

 Frankly, no airline is going to be a wonderful business. 
Warren Buffett 

 If you gave me $100 million and said take away the soft drink leadership of Coca-Cola in the world, I’d give it back to you and say it can’t be done. 
Warren Buffett 

 No thanks, I’ll take cash. 
Warren Buffett 

 Any young person who doesn’t take up bridge is making a big mistake. 
Warren Buffett 

 [On being asked what his next goal is after he became the richest person in America] That’s easy, to be the oldest man in America. 
Warren Buffett 

Size is the anchor of performance. 
Warren Buffett 

 [Charlie Munger] His portfolio was concentrated in a very few securities and therefore his record was much more volatile but it was based on the same discount-from-value approach. He was willing to accept greater peaks and valleys of performance, and he happens to be a fellow whose whole psyche goes toward concentration…. 
Warren Buffett 

 If it doesn’t grab a person right away, I find that you can talk to him for years and show him records, and it doesn’t make any difference. They just don’t seem able to grasp the concept, simple as it is. 
Warren Buffett 

 I’ve never seen any one who became a gradual convert over a ten-year period to this approach. It doesn’t seem to be a matter of IQ or academic training. It’s instant recognition, or it is nothing. 
Warren Buffett 

 But every time Perlmeter buys a stock it’s because he’s getting more for his money than he’s paying. That’s the only thing he’s thinking about. He’s not looking at quarterly earnings projections, he’s not looking at next year’s earnings, he’s not thinking about what day of the week it is, he doesn’t care what investment research from any place says, he’s not interested in price momentum, volume or anything. He’s simply asking what is the business worth? 
Warren Buffett 

 [Value investors]…these investors are, mentally always buying the business, not buying the stock. But all exploit the difference between the market price of a business and it’s intrinsic value. 
Warren Buffett 

 I’m convinced that there is much inefficiency in the market. These Graham-and-Doddsville investors have successfully exploited gaps between price and value. 
Warren Buffett 

 Those who read their Graham and Dodd will continue to prosper. 
Warren Buffett 

 Walter Lippmann spoke of men who plant trees that other men will sit under. Ben Graham was such a man. 
Warren Buffett 

 Several years ago Ben Graham, then almost eighty, expressed to a friend the thought that he hoped every day to do ‘something foolish [whimsical], something creative and something generous. 
Warren Buffett 
The predicament of most professional money managers is the ‘Swing you bum!’ syndrome. The experienced and patient individual investor can take his time ad infinitum waiting for the sweetheart pitch. If the whole market is high, or there’s so much optimism it makes you nervous, you can just go to Europe or to Mexico for a while until things come back into range. The hotshot go-go portfolio manager, on the other hand from whom continuous activity is expected, is in the predicament of a dangerous hitter going to the plate and finding that the pitcher has decided to walk him. All the pitches are out of reach, or nearly so. The batter knows that his best tactic is to accept the walk, but thousands of fans, who want to see some action, are shouting ‘Swing you bum!’. Not to disappoint them, the batter feels he has to take a cut, and so risks an unnecessary put out. 
We’re not in the steel business per se. We’re not in the shoe business, per se. We’re not in any business per se. We’re big in insurance, but we’re not committed to it. We don’t have a mind-set that says you have to go down this road. So we can take capital and move it into businesses that make sense. 
Warren Buffett 

I am a better investor because I am a businessman, and a better businessman because I am an investor. 
Warren Buffett 

It baffles us how many people know of Ben Graham, but so few follow. We tell our principles freely and write about them extensively in our annual reports. They are easy to learn. They should be easy to follow. But the only thing anyone wants to know is, ‘what we are buying today?’. Like Graham, we are widely recognised but least followed. 
Warren Buffett 

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

Never ask a barber if you need a haircut. 
Warren Buffett 

If Fed Chairman Alan Greenspan were to whisper to me what his monetary policy was going to be over the next two years, it wouldn’t change one thing I do. 
Warren Buffett 

Investment must be rational, if you can’t understand it don’t do it. 
Warren Buffett 

The first step to recovery is to stop doing the wrong thing. 
Warren Buffett 

You should invest in a business that even a fool can run, because someday a fool will. 
Warren Buffett 

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. 
Warren Buffett 



If a graduating MBA were to ask me, ‘How do I get rich in a hurry?’ I would not respond with quotations from Ben Franklin or Horatio Alger, but would, instead, hold my nose with one hand and point with the other toward Wall Street. 
Warren Buffett 

All there is to investing is picking good stocks at good times and staying with them as long as they remain good companies. 
Warren Buffett 

I have seen no trend towards value investing in the 35 years I have practised it. There seems to be some perverse human characteristic that likes to make easy things difficult. 
Warren Buffett 

A great business at a fair price is superior to a fair business at a great price. Great investment opportunities come around when excellent companies are surrounded by unusual circumstances that cause the stock to be misappraised. 
Warren Buffett 

It is far better to buy a wonderful company at a fair price than a fair company at a wonderful price. I would rather be certain of a good result than hopeful of a great one. 
Warren Buffett 

We rarely use much debt and when we do, we attempt to structure it on a long-term fixed rate basis. We will reject interesting opportunities rather than over-leverage our balance sheet. 
Warren Buffett 

What could be more exhilarating than to participate in a bull market in which the ‘rewards to the owners of the business become gloriously uncoupled from the plodding performance of the businesses themselves’. Unfortunately however, stocks can’t outperform businesses indefinitely. 
Warren Buffett 

The ability to raise prices – the ability to differentiate yourself in a real way, and a real way means you can charge a different price – makes a great business. 
Warren Buffett 

There are certain kinds of businesses where you have to be smart once and the kind where you have to stay smart every day to defend it. Retailing is one of them. If you find a retailing concept that catches on, you have to defend it everyday. 
Warren Buffett 

Businesses with soft underbellies do not make good investments. 
Warren Buffett 



The smartest side to take in a bidding war is the losing side. 
Warren Buffett 

When a management with a reputation for brilliance tackles a business with a reputation for poor fundamental economics, it is the reputation of the business that remains intact. 
Warren Buffett 

Nothing has since changed my point of view on that matter. Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks. 
Warren Buffett 

What counts for most people investing is not how much they know, but rather how realistically they define what they don’t know. Paradoxically when dumb money acknowledges it’s limitations, it ceases to be dumb. 
Warren Buffett 

Our favourite holding period is forever. 
Warren Buffett 

[On arbitrage] Deciding whether to employ cash this way requires evaluating four common-sense questions based on information rather than rumour. The probability of the event occurring, the time the funds will be tied up, the opportunity cost and the downside if the event does not occur. 
Warren Buffett 

Charlie and I pay a great deal of attention to how well our businesses are doing, and we also work to understand the environment in which each business is operating. For example, is one of our businesses enjoying an industry tailwind or is it facing a headwind? Charlie and I need to know exactly which situation prevails and to adjust our expectations accordingly. 
Warren Buffett 

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 family and friends have and need in order to pursue what they don’t have and don’t need. 
Warren Buffett 

Berkshire has access to two low-cost, non-perilous sources of leverage that allow us to safely own far more assets than our equity capital alone would permit: deferred taxes and ‘float’, the funds of others that our insurance business holds because it receives premiums before needing to pay out losses. Both of these funding sources have grown rapidly and now total about $12 billion. Better yet, this funding to date has been cost-free. Deferred tax liabilities bear no interest. And as long as we can break even in our insurance underwriting – which we have done on average, during our 29 years in the business – the cost of the float developed from that operation is zero. Neither item it should be understood is equity; these are real liabilities. But they are liabilities without covenants or due dates attached to them. In effect, they give us the benefit of debt – an ability to have more assets working for us – but saddle us with none of it’s drawbacks. 
Warren Buffett 

Good investment ideas are rare, valuable and subject to competitive appropriation just as good product or business acquisition ideas are. Therefore we normally will not talk about our investment ideas. Though we continue to be unwilling to talk about specific stocks, we freely discuss our business and investment philosophy. 
Warren Buffett 



Charlie Munger, our Vice Chairman, and I really have only two jobs. One is to attract and keep outstanding managers to run our various operations. [Other one is capital allocation] This hasn’t been all that difficult. Usually the managers came with the companies we bought, having demonstrated their talents throughout careers that spanned a wide variety of business circumstances. They were managerial stars long before they knew us, and our main contribution has been to not get in their way. This approach seems elementary: if my job were to manage a golf team – and if Jack Nicklaus or Arnold Palmer were willing to play for me – neither would get a lot of directives from me about how to swing. 
Warren Buffett 

Some of our key managers are independently wealthy (we hope they all become so), but that poses no threat to their continued interest: they work because they love what they do and relish the thrill of outstanding performance. They unfailing think like owners (the highest compliment we can pay a manager) and find all aspects of their business absorbing. 
Warren Buffett 

Charlie and I know that the right players will make almost any team manager look good. We subscribe to the philosophy of Ogilvy and Mather’s founding genius, David Ogilvy: ‘If each of us hires people who are smaller than we are, we shall become a company of dwarfs. But, if each of us hires people who are bigger than we are, we shall become a company of giants. 
Warren Buffett 

A by-product of our managerial style is the ability it gives us to easily expand Berkshire’s activities. We’ve read management treatises that specify exactly how many people should report to any one executive, but they make little sense to us. When you have able managers of high character running businesses about which they are passionate, you can have a dozen or more reporting to you and still have time for an afternoon nap. Conversely, if you have even one person reporting to you who is deceitful, inept or uninterested, you will find yourself with more than you can handle. Charlie and I could work with double the number of managers we have now, so long as they had the rare qualities of the present ones. 
Warren Buffett 

We intend to continue our practice of working only with people whom we like and admire. This policy not only maximises our chances for good results, it also ensures us an extraordinarily good time. On the other hand, working with people who cause your stomach to churn seems much like marrying for money – probably a bad idea under any circumstances, but absolute madness if you are already rich. 
Warren Buffett 

My conclusion from my own experiences and from much observation of other businesses is that a good managerial record (measured by economic returns) is far more a function of what business boat you get into than it is of how effectively you row (though intelligence and effort help considerably, of course in any business good or bad). Some years ago I wrote: ‘When a management with a reputation for brilliance tackles a business with a reputation for poor fundamental economics, it is the reputation of the business that remains intact.’ Nothing has since changed my point of view on the matter. Should you find yourself in a chronically leaking boat energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks. 
Warren Buffett 

I’ll be happy to accept a lottery ticket as a gift – but I’ll never buy one. 
Warren Buffett 

We have carefully designed both the company and our jobs so that we do things we enjoy with people we like. Equally important, we are forced to do very few boring or unpleasant tasks. 
Warren Buffett 

To some, our stand may seem highly eccentric. Charlie and I have long followed David Ogilvy’s advice: ‘Develop your eccentricities while you are young. That way, when you get old, people won’t think you’re going ga-ga’. 
Warren Buffett 

What’s the sense in getting rich just to stare at the ticker tape all day? 
Warren Buffett 

We do not have, never have had, and never will have an opinion about where the stockmarket, interest rates, or business activity will be a year from now. 
Warren Buffett 

The stock market serves as a relocation centre at which money is moved from the active to the patient. 
Warren Buffett 

Our goal is to find an outstanding business at a sensible price, not a mediocre business at a bargain price. 
Warren Buffett 

We select our marketable equity securities in much the same way we would evaluate a business for acquisition in it’s entirety. We want the business to be one a) that we understand b) with favourable long-term prosects c) operated by honest and competent people and d) available at a very attractive price. 
Warren Buffett 

An investor needs to do very few things right as long as he or she avoids big mistakes. 
Warren Buffett 

Would you believe that a few decades back they were growing shrimp at Coke and exploring for oil at Gillette? Loss of focus is what most worries Charlie and me when we contemplate investing in businesses that in general look outstanding. 
Warren Buffett 

First each pair is stronger than the sum of it’s parts because each partner understands, trusts and admires the other. Second, both managerial teams pay able people well, but abhor having a bigger head count than is needed. Third, both attack costs as vigorously when profits are at record levels as when they are under pressure. Finally both stick with what they understand and let their abilities, not their egos, determine what they attempt. Thomas J Watson Sr of IBM followed the same rule: ‘I’m no genius’ he said. ‘I’m smart in spots – but I stay around those spots’”. 
Warren Buffett 

But as happens in Wall Street all too often, what the wise do in the beginning, fools do in the end. 
Warren Buffett 

Be fearful when others are greedy and to be greedy only when others are fearful. 
Warren Buffett 

We want those who think of themselves as business owners and invest in companies with the intention of staying a long time. And we want those who keep their eyes focussed on business results, not market prices. 
Warren Buffett 



People who buy for non-value reasons are likely to sell for non-value reasons. Their presence in the picture will accentuate erratic price swings unrelated to business developments. 
Warren Buffett 

And there after I revised my strategy and tried to buy good businesses at fair prices rather than fair businesses at good prices. 
Warren Buffett 

We continually look for ways to employ large sums in each area. But we try to avoid small commitments. If something’s not worth doing at all, it’s not worth doing well. 
Warren Buffett 

At Berkshire, we have rejected many merger and purchase opportunities that would have boosted current and near-term earnings but that would have reduced per-share intrinsic value. Our approach, rather has been to follow Wayne Gretzky’s advice: ‘Go to where the puck is going to be, not to where it is.’ As a result, our shareholders are now many billions of dollars richer than they would have been if we had used the standard catechism. 
Warren Buffett 

Most business owners spend the better part of their lifetimes building their businesses. By experience built upon endless repetition, they sharpen their skills in merchandising, purchasing, personnel etc. It’s a learning process and mistakes made in one year often contribute to competence and success in succeeding years. 
Warren Buffett 

Managers and investors alike must understand that accounting numbers are the beginning, not the end, of business valuation. 
Warren Buffett 

You can have a full and rewarding life without ever thinking about goodwill and it’s amortisation. But students of investment and management should understand the nuances of the subject. My own thinking has changed drastically from 35 years ago when I was taught to favour tangible assets and to shun businesses whose value depended largely upon economic goodwill. This bias caused me to make many important business mistakes of omission although relatively few of commission. Keynes identified my problem ‘The difficulty lies not in the new ideas but in escaping from the old ones.’ My escape was long delayed, in part because most of what I had been taught by the same teacher had been (and continues to be) so extraordinarily valuable. Ultimately, business experience, direct and vicarious, produced my present strong preference for businesses that possess large amounts of enduring goodwill and that utilise a minium of tangible assets. 
Warren Buffett 

Thus our first lesson: businesses logically are worth far more than net tangible assets when they can be expected to produce earnings on such assets considerably in excess of market rates of return. The capitalised value of this excess return is economic goodwill. 
Warren Buffett 

We will stick with the approach that got us here and try not to relax our standards. Ted Williams, in The story of my life explains why: ‘My argument is to be a good hitter, you’ve got to get a good ball to hit. It’s the first rule in the book. If I have to bite at stuff that is out of my happy zone, I’m not a .344 hitter. I might only be a .250 hitter.’ Charlie and I agree and will try to wait for opportunities that are well within our own ‘happy zone’. 
Warren Buffett 

We will continue to ignore political and economic forecasts, which are an expensive distraction for many investors and businessmen. Thirty years ago, no one could have foreseen the huge expansion of the Vietnam War, wage and price controls, two oil shocks, the resignation of a president, the dissolution of the Soviet Union, a one-day drop in the Dow of 508 points, or treasury bill yields fluctuating between 2.8% and 17.4%. … imagine the cost to us if we had let a fear of unknowns cause us to defer or alter the deployment of capital. Indeed, we have usually made our best purchases when apprehensions about some macro event were at a peak. Fear is the foe of the faddist, but the friend of the fundamentalist. 
Warren Buffett 



Most of our managers are independently wealthy, and it’s therefore up to us to create a climate that encourages them to choose working with Berkshire over golfing or fishing. 
Warren Buffett 

I like businesses that I know what they will look like in 5 or 10 or 20 years. I think I know what Coke will look like. 
Warren Buffett 

If you understand a business, you don’t need very many of them. 
Warren Buffett 

Maybe grapes from a little eight acre vineyard in France are really the best in the world, but I always had a suspicion that about 99 percent of it is in the telling and about 1 percent of it is in the drinking. 
Warren Buffett 

I want to explain my mistakes. This means I do only the things I completely understand. 
Warren Buffett 

In the end, I always believe my eyes rather than anything else. 
Warren Buffett 

One of the things that attracted me to working with securities was the fact that you could live your own life. You don’t have to dress for success. 
Warren Buffett 

I can’t think of anything in life I want that I don’t have. 
Warren Buffett 

It’s easier to create money than to spend it. 
Warren Buffett 

Upon my death Berkshire’s earnings will immediately increase by $1 million, since Charlie will sell the corporate jet the next day, ignoring my wish to be buried with the Indefensible. 
Warren Buffett 



To swim a fast 100 metres, it’s better to swim with the tide than to work on your stroke. 
Warren Buffett 

I don’t measure my life by the money I’ve made. Other people might, but I certainly don’t. 
Warren Buffett 

Never lie under any circumstances. Don’t pay any attention to the lawyers. If you start letting lawyers get into the picture, they’ll basically tell you, ‘don’t say anything.’ You’ll never get tangled up if you just basically lay it out as you see it. 
Warren Buffett 

Chains of habit are too light to be felt until they are too heavy to be broken. 
Warren Buffett 

I buy expensive suits. They just look cheap on me. 
Warren Buffett 

I’m not competent to judge his [Bill Gates] technical ability, but I regard his business savvy as extraordinary. If Bill had started a hot dog stand, he would have become the hot dog king of the world. He will win in any game. He would be very good at my business, but I wouldn’t be at his. 
Warren Buffett 

Retirement plans? About 5 to 10 years after I die. 
Warren Buffett 

Somebody once said that in looking for people to hire, you look for three qualities: integrity, intelligence, and energy. And if they don’t have the first, the other two will kill you. You think about it; it’s true. If you hire somebody without the first, you really want them to be dumb and lazy. 
Warren Buffett 

I like guys who forget that they sold the business to me and run the show like proprietors. When I marry the daughter, she continues to live with her parents. 
Warren Buffett 

If you cannot control your emotions, you cannot control your money. 
Warren Buffett 

It is not that we don’t understand a technology business or it’s product. The reason we don’t invest is because we can’t understand the predictability of the economics ten years hence. 
Warren Buffett 

Your goal as an investor should be simply to purchase, at a rational price, a part interest in an easily understood business whose earning’s are virtually certain to be materially higher, five, ten and twenty years from now. Overtime, you will find only a few companies that meet those standards – so when you see one that qualifies, you should buy a meaningful amount of stock. 
Warren Buffett 

We just focus on a few outstanding companies. 
Warren Buffett 

The only value of stock forecasters is to make fortune tellers look good. 
Warren Buffett 

Our [investment] attitude fits our personalities and the way we want to live our lives. 
Warren Buffett 

A partner who is not subservient, who is himself extremely logical, is one of the best mechanisms you can have. 
Warren Buffett 

Look first for someone both smarter and wiser than you are. After locating him (or her) ask him not to flaunt his superiority so that you may enjoy acclaim for the many accomplishments that sprang from his thoughts and advice. Seek a partner who will never second-guess you nor sulk when you make expensive mistakes. Look also for a generous soul who will put up his own money and work for peanuts. Finally, join with someone who will constantly add to the fun as you travel a long road together. 
Warren Buffett 

Charlie can analyse and evaluate any kind of deal faster and more accurately than any man alive. He sees any valid weakness in 60 seconds. He is a perfect partner. 
Warren Buffett 

I could improve your ultimate financial welfare by giving you a ticket with only twenty slots in it so that you had twenty punches – representing all the investments that you get to make in a lifetime. And once you’d punched through the card, you couldn’t make any more investments at all. Under those rules, you’d really think carefully about what you did, and you’d be forced to load up on what you’d really thought about. So you’d do so much better. 
Warren Buffett 

So we think in terms of that moat and the ability to keep its width and its impossibility of being crossed as the primary criterion of a great business. And we tell our managers we want the moat widened every year. That doesn’t necessarily mean the profit will be more this year than it was last year because it won’t be sometimes. However, if the moat is widened every year, the business will do very well. When we see a moat that’s tenuous in any way – it’s just too risky. We don’t know how to evaluate that. And, therefore, we leave it alone. We think that all of our businesses – or virtually all of our businesses – have pretty darned good moats. And we think the managers are widening them. 
Warren Buffett 



People always want a formula – but it doesn’t always work that way. You have to estimate total cash generated from now to eternity, and discount it back to today. Yardsticks such as P/E’s are not enough by themselves. 
Warren Buffett 

Charlie and I were introduced in 1959 by the Davis family. We were two personalities who tended towards dominance. Yet, we’ve never had an argument since. 
Warren Buffett 

We regard our [Insurance] float as a very significant asset. 
Warren Buffett 

We don’t get paid for being busy, we get paid for being right. 
Warren Buffett 

Change, as in the case of the internet, can be the friend of society. But it is in the absence of change that is often the friend of the investor. While the internet will change many things it will not likely change the brand of gum people chew. Charlie and I like stable businesses like chewing gum and try to leave life’s more unpredictable things to someone else. 
Warren Buffett 

The sign above the players’ entrance to the field at Notre Dame reads ‘Play like a champion today’. I sometimes joke that the sign at Nebraska reads ‘Remember your helmet’. Charlie and I are ‘Remember your helmet’ kind of guys. We like to keep it simple. 
Warren Buffett 




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