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Isabelle Schafer
2010-08-26T14:07:00Z
Famously called "the oracle of Omaha", Warren Buffett often delights journalists and his fans with gems of essential business wisdom and humor.
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Many of them actually come from his annual letters to his shareholders, where he explains Berkshire Hathaway's current situation. This is not your usual report - Buffett actually talks to his shareholders, explains what's going on, and cracks jokes.
Other extremely quotable nuggets come from speeches or interviews. Broadcast journalists call the investor a "bite machine".
We compiled a few of the best quotes on investing we could find, without claiming to be exhaustive. If we've missed any of your favorites, feel free to let us know in the comments.
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The essentials first
"Rule No. 1: never lose money; rule No. 2: don't forget rule No. 1"
Source: The Tao of Warren Buffett, by Mary Buffett and David Clark
Think about this one
"I am a better investor because I am a businessman, and a better businessman because I am no investor."
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Berkshire is like the Met
"You can sell it to Berkshire, and we'll put it in the Metropolitan Museum; it'll have a wing all by itself; it'll be there forever. Or you can sell it to some p*rn shop operator, and he'll take the painting and he'll make the boobs a little bigger and he'll stick it up in the window, and some other guy will come along in a raincoat, and he'll buy it." - On what makes people sell to him
Source: Bloomberg
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Wonderful v Fair
"It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price."
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No need to be a genius
"You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beats the guy with 130 IQ."
Source: Warren Buffet Speaks, By Janet Lowe, via msnbc.msn
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The Fourth Law Of Motion
"Long ago, Sir Isaac Newton gave us three laws of motion, which were the work of genius. But Sir Isaac’s talents didn’t extend to investing: He lost a bundle in the South Sea Bubble, explaining later, “I can calculate the movement of the stars, but not the madness of men.” If he had not been traumatized by this loss, Sir Isaac might well have gone on to discover the Fourth Law of Motion: For investors as a whole, returns decrease as motion increases."
Source: Letters to shareholders, 2005
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Time is ticking away
"Time is the friend of the wonderful business, the enemy of the mediocre."
Source: Letters to shareholders 1989
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Watch carefully...
"After all, you only find out who is swimming naked when the tide goes out."
Source: Letter to shareholders, 2001
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Timing is everything
"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 only when others are fearful."
Source: Letter to shareholders, 2004
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No limits
"When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever."
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Game pressure
"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!'"
Source: The Tao of Warren Buffett, by Mary Buffett and David Clark, via Engineeringnews.com
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About Socks and Stocks
"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."
Source: Letter to shareholders, 2008
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The "lack of change" appeal
" Our approach is very much profiting from lack of change rather than from change. With Wrigley chewing gum, it's the lack of change that appeals to me. I don't think it is going to be hurt by the Internet. That's the kind of business I like."
Source: Businessweek, 1999
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The right moment to strike
"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."
Source: Businessweek, 1999
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Choose sleep over extra profit
" I have pledged – to you, the rating agencies and myself – to always run Berkshire with more than ample cash. We never want to count on the kindness of strangers in order to meet tomorrow’s obligations. When forced to choose, I will not trade even a night’s sleep for the chance of extra profits."
Source: Letter to shareholders, 2008
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