- Rule No. 1: Never lose money. Rule no. 2: Never forget Rule No. 1.
- You leave yourself an enormous margin of safety. You build a bridge that 30,000-pound trucks can go across and then you drive 10,000-pound trucks across it. That is the way I like to go across bridges.
- It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.
- You only have to do a very few things right in your life so long as you don't do too many things wrong.
- Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can't buy what is popular and do well.
- Do not invest in businesses outside your core competency.
- If it is too good to be true, it probably is.
- Stay away from leverage. Derivatives are financial weapons of mass destruction.
- Our favorite holding period is forever.
- 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.
- I don't look to jump over seven-foot bars; I look around for one-foot bars that I can step over.
- 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.
- Long ago, Ben Graham taught me that Price is what you pay; value is what you get. Whether we're talking about socks or stocks, I like buying quality merchandise when it is marked down.
- The investor of today does not profit from yesterday's growth.
- It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently.
- Time is the friend of the wonderful company, the enemy of the mediocre.
- 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.
- 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.
- Intrinsic value can be defined simply: It is the discounted value of the cash that can be taken out of a business during its remaining life. The calculation of intrinsic value, though, is not so simple. As our definition suggests, intrinsic value is an estimate rather than a precise figure, and it is additionally an estimate that must be changed if interest rates move or forecasts of future cash flows are revised.
- If you're an investor, you're looking on what the asset is going to do, if you're a speculator, you're commonly focusing on what the price of the object is going to do, and that's not our game.
- It means we miss a lot of very big winners. But we wouldn't know how to pick them out anyway. It also means we have very few big losers - and that's quite helpful over time. We're perfectly willing to trade away a big payoff for a certain payoff.
- The stock market is a no-called-strike game. You don't have to swing at everything--you can wait for your pitch.
- 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.
- We simply attempt to be fearful when others are greedy and to be greedy when others are fearful.
- Risk comes from not knowing what you are doing.
- A public-opinion poll is no substitute for thought.
- Wall Street is the only place that people drive to in a Rolls Royce to take advice from people who ride the subway.
- It's only when the tide goes out that you learn who's been swimming naked.
- I made my first investment at age eleven. I was wasting my life up until then.
- Never be afraid to ask for too much when selling or offer too little when buying.
- You can't make a good deal with a bad person.
- The great personal fortunes in this country weren't built on a portfolio of fifty companies. They were built by someone who identified one wonderful business.
- It is impossible to un-sign a contract, so do all your thinking before you sign.
- It is easier to stay out of trouble than it is to get out of trouble.
- You should invest like a Catholic marries - for life.
- The market, like the Lord, helps those who help themselves. But unlike the Lord, the market does not forgive those who do not know what they do.
- Marrying for money is probably a bad idea under any circumstances, but it is absolutely nuts if you are already rich.
- You should look at stocks as small pieces of business.
- My idea of a group decision is to look in the mirror.
- I try to buy stock in businesses that are so wonderful that an idiot can run them. Because sooner or later, one will.
- I want to be able to explain my mistakes. This means I do only the things I completely understand.
- If you don’t make mistakes, you can’t make decisions.
- It irritates the hell out me, but you can’t buy love.
- Someone is sitting in the shade today because someone planted a tree a long time ago.
- Never ask a barber if you need a haircut.
- The smartest side to take in a bidding war is the losing side.
- What we learn from history is that people don’t learn from history.
- You have to understand accounting and you have to understand the nuances of accounting. It’s the language of business and it’s an imperfect language, but unless you are willing to put in the effort to learn accounting – how to read and interpret financial statements – you really shouldn’t select stocks yourself.
- It's simply to say that managers and investors alike must understand that accounting numbers are the beginning, not the end, of business valuation.
- If a business does well, the stock eventually follows.
- Managing your career is like investing - the degree of difficulty does not count. So you can save yourself money and pain by getting on the right train.
- You don't have to make money back the same way you lost it.
- If calculus or algebra were required to be a great investor, I'd have to go back to delivering newspapers.
- You want to learn from experience, but you want to learn from other people's experience when you can.
- We enjoy the process far more than the proceeds, though we have learned to live with those also.
- That which is not worth doing is not worth doing well.
- If at first you do succeed, quit trying.
- The business schools reward difficult, complex behavior more than simple behavior, but simple behavior is more effective.
- 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.
- 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.
- When you combine ignorance and leverage, you get some pretty interesting results.
- Wide diversification is only required when investors do not understand what they are doing.
- 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.
- Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good results.
- One of RJR's largest shareholders, he knew tobacco and liked it. "I'll tell you why I like the cigarette business, he said. It costs a penny to make. Sell it for a dollar. It's addictive. And there's fantastic brand loyalty."
- If you're an investor, you're looking on what the asset is going to do, if you're a speculator, you're commonly focusing on what the price of the object is going to do, and that's not our game.
- We don't get paid for activity, just for being right. As to how long we'll wait, we'll wait indefinitely.
- 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're more comfortable in that kind of business. It means we miss a lot of very big winners. But we wouldn't know how to pick them out anyway. It also means we have very few big losers - and that's quite helpful over time. We're perfectly willing to trade away a big payoff for a certain payoff.
- 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 stay-put behavior reflects our view that the stock market serves as a relocation center at which money is moved from the active to the patient.
- We will reject interesting opportunities rather than over-leverage our balance sheet.
- Instead, we try to apply Aesop's 2,600-year-old equation to opportunities in which we have reasonable confidence as to how many birds are in the bush and when they will emerge (a formulation that my grandsons would probably update to "A girl in a convertible is worth five in the phonebook.").
- Wall Street makes its money on activity. You make your money on inactivity.
- I buy expensive suits. They just look cheap on me.
- Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it.
- 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 fact that people are full of greed, fear or folly is predictable. The sequence is not predictable.
- The most important thing to do if you find yourself in a hole is to stop digging.
- Life is like a snowball. The important thing is finding wet snow and a really long hill.
- Our method is very simple. We just try to buy businesses with good-to-superb underlying economics run by honest and able people and buy them at sensible prices. That’s all I’m trying to do.
- If we can't find things within our circle of competence, we don't expand the circle. We'll wait.
- The key is that the stock market basically just sets prices, so it exists to serve you, not instruct you.
- I'd be a bum on the street with a tin cup if the markets were efficient.
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