Warren Buffett Quotes
- A very rich person should leave his kids enough to do anything, but not
enough to do nothing.
- There seems to be some perverse human characteristic that likes to make
easy things difficult.
- The business schools reward difficult complex behavior more than simple behavior, but simple behavior is more effective.
- It's only when the tide goes out that you learn who's been swimming naked.
- Rule Number One: Never lose money. Rule Number Two: Never forget Rule
- Leverage is the only way a smart guy can go broke.
- 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
- The stock market is designed to transfer money from the Active to the
- If you don't feel comfortable owning something for 10 years, then don't
own it for 10 minutes.
- 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.
- A truly great business must have an enduring moat that protects excellent returns on invested capital. The dynamics of capitalism guarantee that competitors will repeatedly assault any business castle that is earning high returns.
- 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.
- You ought to be able to explain why you're taking the job you're taking,
why you're making the investment you're making, or whatever it may be. And if
it can't stand applying pencil to paper, you'd better think it through some
more. And if you can't write an intelligent answer to those questions, don't
- When Charlie [Munger] and I buy stocks -- which we think of as small portions of businesses -- our analysis is very similar to that which we use in buying entire businesses. We first have to decide whether we can sensibly estimate an earnings range for five years out, or more. If the answer is yes, we will buy the stock (or business) if it sells at a reasonable price in relation to the bottom boundary of our estimate. If, however, we lack the ability to estimate future earnings -- which is usually the case -- we simply move on to other prospects.
- 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!"
- 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.
- Success in investing doesn't correlate with I.Q. Once you have ordinary
intelligence, what you need is the temperament to control the urges that get
other people into trouble in investing.
- 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.
- Of one thing be certain: If a CEO is enthused about a particularly foolish
acquisition, both his internal staff and his outside advisors will come up
with whatever projections are needed to justify his stance. Only in fairy
tales are emperors told that they are naked.
- For some reason, people take their cues from price action rather than from
values. What doesn't work is when you start doing things that you don't
understand, or because they worked last week for somebody else. The dumbest
reason in the world to buy a stock is because it's going up.
- 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.
- Buy a stock the way you would buy a house. Understand and like it such that you'd be content to own it in the absence of any market.
- If you're buying a farm, if you're buying an interest in a local business, you're buying -- an apartment house to rent out in Omaha to people -- you shouldn't be looking at the next six months and trying to decide whether now is the time to buy. You should look at what the asset is likely to produce over time and what you have to pay for it. And if you can buy it cheaper, so much the better... For people to try and time stocks is crazy.
- 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.
- 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.
- Charlie and I would much rather earn a lumpy 15 percent over time than a smooth 12 percent.
- Only in the sales presentations of investment banks do move forever upward.
- 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
- We don't get paid for activity, just for being right. As to how long we'll
wait, we'll wait indefinitely.
- 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.
- We've long felt that the only value of stock forecasters is to make
fortune tellers look good. Even now, Charlie and I continue to believe that
short-term market forecasts are poison and should be kept locked up in a safe
place, away from children and also from grown-ups who behave in the market
- Many commentators are fond of saying that the small investor has no chance
in a market now dominated by the erratic behavior of the big boys. This
conclusion is dead wrong: Such markets are ideal for any investor -- small or
large -- so long as he sticks to his investment knitting. Volatility caused by
money managers who speculate irrationally with huge sums will offer the true
investor more chances to make intelligent investment moves.
- Look at market fluctuations as your friend rather than your enemy; profit
from folly rather than participate in it.
- 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.
- There's class warfare, all right, but it's my class, the rich class,
that's making war, and we're winning. (26 November 2006, in a letter
to The New York Times, arguing for the need to raise taxes on the rich)
- When a management with a reputation for brilliance tackles a business with
a reputation for bad economics, it is usually the reputation of the business
that remains intact.
- Observing correctly that the market was frequently efficient, [devotees of efficient market theory] went on to conclude incorrectly that it was always efficient. The difference between these propositions is night and day.
- I'd be a bum on the street with a tin cup if the markets were always
- If you understood a business perfectly and the future of the business, you
would need very little in the way of a margin of safety. So, the more
vulnerable the business is, assuming you still want to invest in it, the
larger margin of safety you'd need.
- We believe that a policy of portfolio concentration may well decrease risk
if it raises, as it should, both the intensity with which an investor thinks
about a business and the comfort-level he must feel with its economic
characteristics before buying into it.
- Anyone who says that size does not hurt investment performance is selling.
The highest rates of return I've ever achieved were in the 1950s. I killed the
Dow. You ought to see the numbers. But I was investing peanuts then. It's a
huge structural advantage not to have a lot of money. I think I could make you
50 percent a year on $1 million. No, I know I could. I guarantee that.
- I call investing the greatest business in the world because you never have
to swing. You stand at the plate, the pitcher throws you General Motors at 47!
U.S. Steel at 39! and nobody calls a strike on you. There's no penalty except
opportunity lost. All day you wait for the pitch you like; then when the
fielders are asleep, you step up and hit it.
- 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. It might be wonderful to be head of
GE, and Jeff Immelt is a friend of mine. And he's a great guy. But think of
all the things he has to do whether he wants to do them or not.
- We have tried occasionally to buy toads at bargain prices with results
that have been chronicled in past reports. Clearly our kisses fell flat. We
have done well with a couple of princes -- but they were princes when
purchased. At least our kisses didn't turn them into toads. And, finally, we
have occasionally been quite successful in purchasing fractional interests in
easily-identifiable princes at toad-like prices.
- I just don't see anything available that gives any reasonable hope of
delivering such a good year and I have no desire to grope around, hoping to
"get lucky" with other people's money. I am not attuned to this market
environment, and I don't want to spoil a decent record by trying to play a
game I don't understand just so I can go out a hero. (in a letter to his
partners during the stock market frenzy of 1969, informing them as to why
he was dissolving Buffett Partnership)
- Draw a circle around the businesses you understand and then eliminate
those that fail to qualify on the basis of value, good management and limited
exposure to hard times.
- The basic ideas of investing are to look at stocks as business, use the
market's 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
cornerstones of investing.