On Life
Chains of habit are too light to be felt until they are too heavy to be broken.
Source: Buffett Wharton Speech, October 10, 2003
On Economy
Like virginity, a stable price level seems capable of maintenance, but not of restoration.
Source: Berkshire Hathaway Letters to Shareholders, 1981
[Economic] Forecasts usually tell us more of the forecaster than of the future.
Source: How inflation swindles the equity investor, 1977
We never look at macroeconomics when buying a business. I bought my first stock when we were losing World War II. But stocks were cheap. We never look at the macro economy Panic is the time to use your money.
Source: Gongol notes from the 2012 Berkshire Hathaway shareholders’ meeting
At the source, peacetime inflation is a political problem, not an economic problem. Human, behavior, not monetary behavior, is the key. And when very human politicians choose between the next election and the next generation, it’s clear what usually happens.
Source: How inflation swindles the equity investor, 1977
On Investing
Investing is putting out money to be sure of getting more back later at an appropriate rate.
Source: Lecture at the University of Florida Business School, October 15th 1998
The price of everything determines its attractiveness.
Source: CNBC Squawk Box, May 6, 2013
It’s got to be a business with fundamentally good economics. It’s got to be a management that I like and trust and admire. And it’s got to be a price that makes sense.
Source: Buffett interview with Charlie Rose, 1 Oct 2008
I won’t make a dumb bet. Not even for 50 cents.
Source: Buffett Wharton Speech, October 10, 2003
Investing is great because you’re always building a database. Every year you’re adding a little bit more (new industries) and there’s not that much leakage on the other end. GEICO purchase was a result of his existing database.
Source: Buffett Speaks at Columbia
Don’t pass up something that’s attractive today because you think you will find something way more attractive tomorrow.
Source: Buffett & Gates at Columbia Business School, November 12th 2009
The [Graham’s value investing] philosophy either takes immediately or it doesn’t at all.
Source: Emory’s Goizueta Business School and McCombs School of Business at UT Austin, February 2008
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.
Source: BRK Annual Meeting 1997
When we buy business, we try to look out and estimate the cash it will generate and compare it to the purchase price. We have to feel pretty good about our projections and then have a purchase price that makes sense.
Source: BRK Annual Meeting 2003 Tilson Notes
People who buy for non-value reasons are likely to sell for non-value reasons.
Source: Warren Buffett’s Letter to Berkshire Shareholders, 1983
You want to be greedy when others are fearful. You want to be fearful when others are greedy.
Source: Buffett interview with Charlie Rose, 1 Oct 2008
I’d rather by approximately right than precisely wrong.
Source: Buffett interview with Charlie Rose, 1 Oct 2008
We know about a lot of industries, and there are some things we don’t understand. We like to expand universe of knowledge. If we can’t make a decision in five minutes, we can’t learn enough in five months.
Source: 2008 Berkshire Hathaway Shareholder Meeting Notes
People’s actions don’t observe laws of math. It’s a terrible mistake to think higher math will take you a long way— you don’t need to understand it, [and] it may lead you down the wrong path.
Source: BRK Annual Meeting 2009 Bruni Notes
You will be right, over the course of many transactions, if your hypotheses are correct, your facts are correct, and your reasoning is correct.
Source: Buffett Partnership Letter, January 24, 1962
Book value tells you what has been put in; intrinsic business value estimates what can be taken out.
Source: Warren Buffett’s Letter to Berkshire Shareholders, 1983
The market, like the Lord, helps those who help themselves. But, unlike the Lord, the market does not forgive those who know not what they do. For the investor, a too-high purchase price for the stock of an excellent company can undo the effects of a subsequent decade of favorable business developments.
Source: Warren Buffett’s Letter to Berkshire Shareholders, 1982
On Business
A truly great business must have an enduring “moat” that protects excellent returns on invested capital.
Source: 2007 Annual Report – Berkshire Hathaway, Inc.
Any mistakes have been cases where I mistook the future competitive position of a company, and did so badly.
Source: Gongol notes from the 2012 Berkshire Hathaway shareholders’ meeting
If we could see in looking at any business what its future cash flows would be for the next 100 years, and discount that back at an appropriate interest rate, that would give us a number for intrinsic value.
Source: BRK Annual Meeting 1997
The formula for value was handed down from 600 BC by a guy named Aesop. A bird in the hand is worth two in the bush. Investing is about laying out a bird now to get two or more out of the bush.
Source: Q&A with 6 Business Schools, Feb 2009
I’ve never seen an investment banker’s book in which future earnings are projected to go down. But many businesses’ earnings go down.
Source: BRK Annual Meeting 2003 Tilson Notes
On Management
There is a lot [businesses] I wouldn’t buy even if it had the best management in the world, as it doesn’t make much difference in a bad business.
Source: BRK Annual Meeting 2008 Boodell Notes
I always say that in investing you want to buy stock in a company that has a business that’s so good that an idiot can run it, because sooner or later one will. We have a country like that.
Source: Governor Schwarzenegger Discusses the Economy with Warren Buffett
Most CEOs are dumb about capital allocation. It is not their skill. As a CEO, he’s buying businesses, but most of these guys won’t even buy stock on their own. It is like playing a violin your whole life and then getting to play at Carnegie Hall where they give you a piano.
Source: Buffett Wharton Speech, October 10, 2003
On Stock Market
Stock market opportunities come in clumps.
Source: Buffett Wharton Speech, October 10, 2003
High prices inside of a year will typically be 100% of the low price. Businesses don’t change in value that much. That is simply crazy.
Source: Student Visit May 6, 2005
The stock market is there to serve you, not to instruct you.
Source: BRK Annual Meeting 2003 Tilson Notes
Stock market is liquid so it can also be highly volatile without the underlying fundamentals of a business changing.
Source: Buffett Wharton Speech, October 10, 2003
I don’t really care about volatility. Stock price is not that important to me, it just gives you the opportunity to buy at a great price. I don’t care if they close the NYSE for 5 years. I care more about the business than I do about events.
Source: Q&A with 6 Business Schools, Feb 2009
We make no attempt to predict how security markets will behave; successfully forecasting short term stock price movements is something we think neither we nor anyone else can do.
Source: Warren Buffett’s Letter to Berkshire Shareholders, 1978
We believe that short-term forecasts of stock or bond prices are useless. The forecasts may tell you a great deal about the forecaster; they tell you nothing about the future.
Source: Warren Buffett’s Letter to Berkshire Shareholders, 1980
The beauty of stocks is that sometimes stocks are sold at very silly prices. That’s how we got rich. Mr. Market makes lots of mistakes. Over the next 20 years, our shares will sometimes be very over-priced. Stick to businesses where the value you get exceeds the price you pay. The stock market remains the best place in the whole world for making money. You have lots of information, lots of choices, and no need to do any real work. You can’t do that on the farm. Don’t be the “drunken psychotic” like Mr. Market. Be the one to take advantage of him.
Source: Gongol notes from the 2012 Berkshire Hathaway shareholders’ meeting
On Society
What we learn from history is that people don’t learn from history.
Source: BRK Annual Meeting 2004 Tilson Notes
On Personal Development
Ability to communicate in writing and speaking – it is under taught – is enormously important. If you can communicate well, you have an enormous advantage.Force yourself into situations where you have to develop those abilities.
Source: 2008 Berkshire Hathaway Shareholder Meeting Notes