Buffett Quotes

I have always enjoyed Warren Buffett’s quotes.I enjoy the folksy humour.I appreciate the insights.And I find they help me remember important things just when I need to.I have benefitted from sticking to his fundamentals.I thought I’d share my collection of Buffetisms with you.I will add to the list as I come across them.If you have any favourites please share them with me.I’d love to hear them.

• “Beware of geeks bearing formulas.”
• We’ve put a lot of money to work during the chaos of  the last two years. When it’s raining gold, reach for a bucket, not a thimble.”
• “Derivatives are financial weapons of mass destruction.”
• “I always knew I was going to be rich. I don’t think I ever doubted it for a minute.”
• “I am a huge bull on this country. We will not have a double-dip recession at all. I see our businesses coming back almost across the board. “
• “I don’t look to jump over 7-foot bars: I look around for 1-foot bars that I can step over.”
• “The basic ideas of investing are to look at stocks as businesses, use market fluctuations to your advantage, and seek a margin of safety. That’s what Ben Graham taught us. A hundred years from now they will still be the cornerstone of investing.”
• “Stocks are simple. All you do is buy shares in a great business for less than the business is intrinsically worth, with management of the highest integrity and ability. Then you own the shares forever.”
• “The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company and, above all, the durability of that advantage. The products or services that have wide, sustainable moats around them are the ones that deliver rewards to investors.”
• “I won’t talk unless they bring me a price.”
• “I can’t be involved in 50 or 75 things. That’s a Noah’s Ark way of investing – you end up with a zoo that way. I like to put meaningful amounts of money in a few things.”
• “If you have more than 120 or 130 I.Q. points, you can afford to give the rest away. You don’t need extraordinary intelligence to succeed as an investor.”
• “I like to go for cinches. I like to shoot fish in a barrel. But I like to do it after the water has run out.”
• “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.”
• “If we think the business’s competitive position is shaky, we won’t try to compensate with price.”
• “We want to buy a great business, defined as having a high return on capital for a long period of time, where we think management will treat us right. We like to buy at 40 cents on the dollar, but will pay a lot closer to $1 on the dollar for a great business.”
• “A company that needs large increases in capital to engender its growth may well prove to be a satisfactory investment … It’s far better to have an ever-increasing stream of earnings with virtually no major capital requirements.”
• “The worst sort of business is one that grows rapidly, requires significant capital to engender the growth, and then earns little or no money. Think airlines. Here a durable competitive advantage has proven elusive ever since the days of the Wright Brothers.”
• “Temperament is also important. Independent thinking, emotional stability, and a keen understanding of both human and institutional behavior is vital to long-term investment success. I’ve seen a lot of very smart people who have lacked these virtues.”
• “Read Ben Graham and Phil Fisher, read annual reports, but don’t do equations with Greek letters in them.”
• “The nature of markets is that at times they offer extraordinary values and at other times you have to have the discipline to wait.”
• “In the world of investing a few people after making some money tend to imagine they are invincible and great. This is the worst thing that could happen to any investor, because it surely means that the investor will end up taking unnecessary risks and end up losing everything – arrogance, ego and overconfidence are very lethal.”
• “Investors should remember that their scorecard is not computed using Olympic-diving methods: Degree-of-difficulty doesn’t count. If you are right about a business whose value is largely dependent on a single key factor that is both easy to understand and enduring, the payoff is the same as if you had correctly analyzed an investment alternative characterized by many constantly shifting and complex variables.”
• “An alert investor who has held a good stock for some time usually gets to know its less desirable as well as its more desirable characteristics. Therefore, before selling a rather satisfactory holding in order to get a still better one, there is need of the greatest care in trying to appraise accurately all elements of the situation.”
• “The main mistakes we’ve made – some of them big time – are: 1) Ones when we didn’t invest at all, even when we understood it was cheap; and 2) Starting in on an investment and not maximizing it…I sometimes stopped buying, perhaps hoping it would come back down. We’ve missed billions when I’ve gotten anchored.”
• “Everybody has got a different circle of competence. The important thing is not how big the circle is; the important thing is staying inside the circle.”
• “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.”
• “I think the most important factor in getting out of the recession actually is just the regenerative capacity of – of American capitalism.”
• “If a business does well, the stock eventually follows.”
• “In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.”
• “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”
• “It’s better to hang out with people better than you. Pick out associates whose behavior is better than yours and you’ll drift in that direction.”
• “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”
• “It’s never paid to bet against America. We come through things, but its not always a smooth ride.”
• ” Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it. “
• “Of the billionaires I have known, money just brings out the basic traits in them. If they were jerks before they had money, they are simply jerks with a billion dollars.”
• “Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
• “Only when the tide goes out do you discover who’s been swimming naked.”
• “Our favorite holding period is forever.”
• “Price is what you pay. Value is what you get.”
• “Risk comes from not knowing what you’re doing.”
• “Rule No.1: Never lose money. Rule No.2: Never forget rule No.1.”
• “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.”
• “Someone’s sitting in the shade today because someone planted a tree a long time ago.”
• “The business schools reward difficult complex behavior more than simple behavior, but simple behavior is more effective.”
• ” The investor of today does not profit from yesterday’s growth.”
• ” Wall Street is the only place that people ride to in a Rolls Royce to get advice from those who take the subway.”
• “We believe that according the name ‘investors’ to institutions that trade actively is like calling someone who repeatedly engages in one-night stands a ‘romantic.’ “
• “We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.”
• ” When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact. “
• “You only have to do a very few things right in your life so long as you don’t do too many things wrong.”
• “I’m a better businessman because I am an investor and a better investor because I am a businessman. If you have the mentality of both, it aids you in each field.”
• “Success in investing doesn’t correlate with I.Q. once you’re above the level of 125. Once you have ordinary intelligence, what you need is the temperament to control the urges that get other people into trouble in investing.”
• “We don’t do due diligence or go out kicking tires. It doesn’t matter. What matters is understanding the competitive dynamics of a business. We can’t be taken by a guy with a sales pitch… What really counts is the presence of a competitive advantage. You want a business with a big castle and a moat around it, and you want that moat to widen over time. Coke and Kodak both had marvelous moats 20 or 25 years ago. Kodak’s has narrowed, while Coke has been building its moat. We want an economic castle.”
• “The best thing that happens to us is when a great company gets into temporary trouble… We want to buy them when they’re on the operating table.”
• ” I’ve never had a target price or a target holding period on a stock.”
• “There will be enormous amounts of disappointment. The numbers of people buying these stocks to hold them are very few. I think 98% of them are being bought by people because they are going up. If these stocks stop going up, they’ll get out… Very few of these companies will be big winners in the long run. It’s the nature of capitalism not to get a lot of winners. You get a few.”
• “With Coke I can come up with a very rational figure for the cash it will generate in the future. But with the top 10 Internet companies, how much cash will they produce over the next 25 years? If you say you don’t know,  then you don’t know what it is worth and you are speculating, not investing. All I know is that I don’t know, and  if I don’t know, I don’t invest.”
• “I do admire the management of Intel and Microsoft, but I don’t have a fix on where they will be in 10 years. I think it is harder to get a fix on those kinds of businesses. I don’t know how to value them. And if I started playing around without knowing how to value a company, I might as well buy lottery tickets.”
• “I don’t read economic forecasts. I don’t read the funny papers.”
• “”I am very skeptical of most big mergers. The assumptions made tend to be very optimistic. People want to do deals — you start with that. There’s a lot of Darwin going on in companies. And people who get to the top want action. I’ve been on 19 boards in my life, and I’d say the great majority of deals that I’ve seen were not very good deals.”
• “The line separating investment and speculation , which is never bright and clear, becomes blurred still further when most market participants have recently enjoyed triumphs. Nothing sedates rationality like large doses of effortless money. After a heady experience of that kind, normally sensible people drift into behavior akin to that of Cinderella at the ball. They know that overstaying the festivities — that is, continuing to speculate in companies that have gigantic valuations relative to the cash they are likely to generate in the future — will eventually bring on pumpkins and mice. But they nevertheless hate to miss a single minute of what is one helluva party. Therefore, the giddy participants all plan to leave just seconds before midnight. There’s a  problem, though: They are dancing in a room in which the clocks have no hands.”
• “The biggest cause of that kind of mistake [here, failing to buy more Citicorp in 1991], is that I stop buying when the stock starts moving up. I get so enamored of how cheap it was when I started buying that I stop. I have too often folded my tent. I believe in loading up on these things. There wasn’t anyone who thought Citibank was going to disappear. And there wasn’t anyone who thought it wasn’t cheap at $9 a share.”
• “Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.”
• “Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good results.”
• “If you have a great manager, you want to pay him very well.”
• “I’ll tell you why I like the cigarette business. It costs a penny to make. Sell it for a dollar. It’s addictive. And there’s fantastic brand loyalty.”
• “[The] stock market serves as a relocation center at which money is moved from the active to the patient.”
• “…many in Wall Street – a community in which quality control is not prized – will sell investors anything they will buy.”
• “Investors making purchases in an overheated market need to recognize that it may often take an extended period for the value of even an outstanding company to catch up with the price they paid.”
• “The most common cause of low prices is pessimism – some times pervasive, some times specific to a company or industry. We want to do business in such an environment, not because we like pessimism but because we like the prices it produces. It’s optimism that is the enemy of the rational buyer.”
• “Our future rates of gain will fall far short of those achieved in the past. Berkshire’s capital base is now simply too large to allow us to earn truly outsized returns. If you believe otherwise, you should consider a career in sales but avoid one in mathematics (bearing in mind that there are really only three kinds of people in the world: those who can count and those who can’t).”
• “Time is the enemy of the poor business and the friend of the great business. If you have a business that’s earning 20%-25% on equity, time is your friend. But time is your enemy if your money is in a low return business.”
• “If you expect to be a net saver during the next 5 years, should you hope for a higher or lower stock market during that period?”Many investors get this one wrong. Even though they are going to be net buyers of stocks for many years to come, they are elated when stock prices rise and depressed when they fall.”This reaction makes no sense. Only those who will be sellers of equities in the near future should be happy at seeing stocks rise. Prospective purchasers should much prefer sinking prices.”
• “Unless you can watch your stock holding decline by 50% without becoming panic-stricken, you should not be in the stock market.”
• “Stop trying to predict the direction of the stock market, the economy, interest rates, or elections.”
• “Much success can be attributed to inactivity. Most investors cannot resist the temptation to constantly buy and sell.”
• “Wild swings in share prices have more to do with the “lemming- like” behaviour of institutional investors than with the aggregate returns of the company they own.”
• “Lethargy, bordering on sloth should remain the cornerstone of an investment style.”
• “Turn-arounds” seldom turn.”
• “Look for companies with high profit margins.”
• “Always invest for the long term.”
• “Remember that the stock market is manic-depressive.”
• “It is not necessary to do extraordinary things to get extraordinary results.”
• “Does the business have favourable long term prospects? “
• “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.”
• “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 his tail a leg?’ The answer: `Four, because calling a tail a leg does not make it a leg’.”
• “If you don’t know jewelry, know the jeweller.”
• “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.”
• “I really like my life. I’ve arranged my life so that I can do what I want.”
• “One of the ironies of the stock market is the emphasis on activity. Brokers, using terms such as `marketability’ and `liquidity,” sing the praises of companies with high share turnover… but investors should understand that what is good for the croupier is not good for the customer. A hyperactive stock market is the pick pocket of enterprise.”
• “I never buy anything unless I can fill out on a piece of paper my reasons. I may be wrong, but I would know the answer to that. “I’m paying $32 billion today for the Coca Cola Company because…” If you can’t answer that question, you shouldn’t buy it. If you can answer that question, and you do it a few times, you’ll make a lot of money.”
• ” The important thing is to keep playing, to play against weak opponents and to play for big stakes.”
• “The future is never clear, and 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.”
• “We’ve long felt that the only value of stock forecasters is to make fortune tellers look good.”
• “Investors should remember that excitement and expenses are their enemies. And if they insist on trying to time their participation in equities, they should try to be fearful when others are greedy and greedy when others are fearful.”
• “A story that was passed down from Ben Graham illustrates the lemminglike behavior of the crowd: “Let me tell you the story of the oil prospector who met St. Peter at the Pearly Gates. When told his occupation, St. Peter said, “Oh, I’m really sorry. You seem to meet all the tests to get into heaven. But we’ve got a terrible problem. See that pen over there? That’s where we keep the oil prospectors waiting to get into heaven. And it’s filled—we haven’t got room for even one more.” The oil prospector thought for a minute and said, “Would you mind if I just said four words to those folks?” “I can’t see any harm in that,” said St. Pete. So the old-timer cupped his hands and yelled out, “Oil discovered in hell!” Immediately, the oil prospectors wrenched the lock off the door of the pen and out they flew, flapping their wings as hard as they could for the lower regions. “You know, that’s a pretty good trick,” St. Pete said. “Move in. The place is yours. You’ve got plenty of room.” The old fellow scratched his head and said, “No. If you don’t mind, I think I’ll go along with the rest of ’em. There may be some truth to that rumor after all.”
• “The speed at which a business success is recognized, furthermore, is not that important as long as the company’s intrinsic value is increasing at a satisfactory rate. In fact, delayed recognition can be an advantage: It may give us the chance to buy more of a good thing at a bargain price.”
• “I’d be a bum on the street with a tin cup if the markets were always efficient.”
• “The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company and, above all, the durability of that advantage.”
• “Two rules:
  1. Preserve the principal
  2. When in doubt see Rule #1”
• “No matter great the talent or efforts some things just take time.You can’t produce a baby in one month by getting nine women pregnant.”
• “I have no idea on timing. It’s far easier to tell what will happen than when it will happen.”
• “Only when you combine sound intellect with emotional discipline, you get rational behavior.”
• “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.”
• “Great investment opportunities come around when excellent companies are surrounded by unusual circumstances that cause the stock to be misappraised.”
• “In the short term the market is a popularity contest; in the long term it is a weighing machine.”
• “I get to do what I like to do every single day of the year. I get to do it with people I like, and I don’t have to associate with anybody who causes my stomach to churn. I tap dance to work, and when I get there I think I’m supposed to lie on my back and paint the ceiling. It’s tremendous fun.”
• “It’s better to have a part interest in the Hope Diamond than to own all of a rhinestone.”
• “I should emphasize that we do not measure the progress of our investments by what their market prices do during any given year. Rather, we evaluate their performance by the two methods we apply to the businesses we own. The first test is improvement in earnings, with our making due allowance for industry conditions. The second test, more subjective, is whether their “moats”– a metaphor for the superiorities they possess that make life difficult for their competitors– have widened during the year.”
• “If you gave me the choice of being CEO of General Electric or IBM or General Motors, you name it, or delivering papers, I would deliver papers. I would. I enjoyed doing that. I can think about what I want to think. I don’t have to do anything I don’t want to do.”
• “You’re neither right nor wrong because other people agree with you. You’re right because your facts are right and your reasoning is right—and that’s the only thing that makes you right. And if your facts and reasoning are right, you don’t have to worry about anybody else.”
• “You want to learn from experience, but you want to learn from other people’s experience when you can.”
• “The smartest side to take in a bidding war is the losing side.”
• “Never ask a barber if you need a haircut.”
• “There is nothing like writing to force you to think and get your thoughts straight.”
• “I read everything: annual reports, 10K’s, 10Q’s, biographies, histories, five newspapers a day. On airplanes, I read the backs of the seats. Reading is key. Reading has made me rich over time.”
• “You don’t have to make money back the same way you lost it.”
• “If you aren’t willing to own a stock for 10 years don’t even think about owning it for 10 minutes.”
• “You will see that we favour businesses and industries unlikely to experience major change. The reason for that is simple: We are searching for operations that we believe are virtually certain to possess enormous competitive strength ten or twenty years from now. A fast-changing industry environment may offer the chance for huge wins, but it precludes the certainty we seek.”
• “We insist on a margin of safety in our purchase price. If we calculate the value of a common stock to be only slightly higher than its price, we’re not interested in buying.”
• “Here I need to remind you about the definition of “investing,” which though simple is often forgotten. Investing is laying out money today to receive more money tomorrow.”
• “f the choice is between a questionable business at a comfortable price or a comfortable business at a questionable price, we much prefer the latter. What really gets our attention, however, is a comfortable business at a comfortable price.”
• “Intelligent investing is not complex, though that is far from saying it is easy. What an investor needs is the ability to correctly evaluate selected business. Note that word ‘selected’, you don’t have to be an expert on every company, or even many.”
• “Shares are not mere pieces of paper. They represent part ownership of a business. So, when contemplating an investment, think like a prospective owner.”
• “Everybody has got a different circle of competence. The important thing is not how big the circle is; the important thing is staying inside the circle.”
• “You should focus on what’s important and knowable. There are many things that are important but now knowable, like a nuclear attack tomorrow. You can’t focus on those.”
• “An investor cannot obtain superior profits from stocks by simply committing to a specific investment category or style. He can earn them only by carefully evaluating facts and continuously exercising discipline.”
• “In short, bad news is an investor’s best friend.”
• “Your goal as an investor should simply be to purchase, at a rational price, a part interest in an easily understandable business whose earnings are virtually certain to be materially higher 5, 10, and 20 years from now. 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.”
• “Put together a portfolio of companies whose aggregate earnings march upward over the years, and so also will the portfolio’s market value.”
• “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.”
• “We try to price, rather than time, purchases. In our view, it is folly to forego buying shares in an outstanding business whose long-term future is predictable, because of short-term worries about an economy or a stock market that we know to be unpredictable. Why scrap an informed decision because of an uninformed guess?”
• “If you’re smart, you don’t need leverage. If you’re dumb, you have no business using it.”
• “We don’t try to pick bottoms. To sit around and not do something sensible because you think there might be something better…doesn’t make sense. Picking bottoms is not our game. Pricing is our game. And that’s not so difficult. Picking bottoms is, I think, impossible.”
• “We don’t have to be smarter than the rest. We have to be more disciplined than the rest.”
• “Those who invest only when commentators are upbeat end up paying a heavy price for meaningless reassurance. In the end, what counts in investing is what you pay for a business – through the purchase of a small piece of it in the stock market – and what that business earns in the succeeding decade or two.”
• “Just because Charlie and I can clearly see dramatic growth ahead for an industry does not mean we can judge what its profit margins and returns on capital will be as a host of competitors battle for supremacy. At Berkshire we will stick with businesses whose profit picture for decades to come seems reasonably predictable. Even then, we will make plenty of mistakes.”
• “My advice is to read a lot. There are no secrets in the business that only the priesthood knows. It’s all right there.”
• “When leverage works, it magnifies your gains. Your spouse thinks you’re clever, and your neighbors get envious. But leverage is addictive.Once having profited from its wonders, very few people retreat to more conservative practices.”
• “If you wait for robins, summer will be gone”.
•  “When we took over Berkshire, gold was at $20, and Berkshire was at $15. Gold is now at $1,600 and Berkshire is $120,000.”

• “What motivates most gold purchasers is their belief that the ranks of the fearful will grow . . . Beyond that, the rising price has on its own generated additional buying enthusiasm, attracting purchasers who see the rise as validating an investment thesis. As “bandwagon” investors join any party, they create their own truth – for a while.”