WARREN BUFFETT INVESTMENT TIPS

70 QUOTES BY WARREN BUFFET ON INVESTMENTS, MONEY, AND LIFE

1.Rule No.1: Never lose money. Rule No.2: Never forget rule No.1
2.It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price
3.Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.
4.We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.
5.Why not invest your assets in the companies you really like? As Mae West said, “Too much of a good thing can be wonderful.”
6.If it’s too good to be true, it probably is.
7.Always look to see how much the other guy is making.
8.Stay away from leverages.
9.A simple rule dictates me buying: Be fearful when others are greedy and be greedy when others are fearful.
10.You are neither right nor wrong because the crowd disagrees with you. You are right because your data and reasoning are right.
11.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.
12.The business schools reward difficult complex behavior more than simple behavior, but simple behavior is more effective.
13.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.
14.Can you really explain to a fish what it’s like to walk on land? One day on land is worth a thousand years of talking about it, and one day running a business has exactly the same kind of value.
15.You only have to do a very few things right in your life so long as you don’t do too many things wrong.
16.If you’re in the luckiest 1 per cent of humanity, you owe it to the rest of humanity to think about the other 99 per cent.
17.It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.
18.I don’t have a problem with guilt about money. The way I see it is that my money represents an enormous number of claim checks on society. It’s like I have these little pieces of paper that I can turn into consumption. If I wanted to, I could hire 10,000 people to do nothing but paint my picture every day for the rest of my life. And the GNP would go up. But the utility of the product would be zilch, and I would be keeping those 10,000 people from doing AIDS research, or teaching, or nursing. I don’t do that though. I don’t use very many of those claim checks. There’s nothing material I want very much. And I’m going to give virtually all of those claim checks to charity when my wife and I die.
19.It’s class warfare, my class is winning, but they shouldn’t be.
20.My family won’t receive huge amounts of my net worth. That doesn’t mean they’ll get nothing. My children have already received some money from me and Susie and will receive more. I still believe in the philosophy – FORTUNE quoted me saying this 20 years ago – that a very rich person should leave his kids enough to do anything but not enough to do nothing.
21.Chains of habit are too light to be felt until they are too heavy to be broken.
22.We enjoy the process far more than the proceeds.
23.You only find out who is swimming naked when the tide goes out.
24.Someone’s sitting in the shade today because someone planted a tree a long time ago.
25.A public-opinion poll is no substitute for thought.
26.A girl in a convertible is worth five in the phonebook.
27.When they open that envelope, the first instruction is to take my pulse again.
28.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.
29.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.
30.In the insurance business, there is no statute of limitation on stupidity.
31.We do not view the company itself as the ultimate owner of our business assets but instead view the company as a conduit through which our shareholders own assets.
32.When Berkshire buys common stock, we approach the transaction as if we were buying into a private business.
33.Wide diversification is only required when investors do not understand what they are doing.
34.Accounting consequences do not influence our operating or capital-allocation decisions. When acquisition costs are similar, we much prefer to purchase $2 of earnings that is not reportable by us under standard accounting principles than to purchase $1 of earnings that is reportable.
35.Never invest in a business you cannot understand.
36.Unless you can watch your stock holding decline by 50% without becoming panic-stricken, you should not be in the stock market.
37.Why not invest your assets in the companies you really like? As Mae West said, Too much of a good thing can be wonderful.
38.(When speaking of managers and executive compensation) The .350 hitter expects, and also deserves, a big payoff for his performance – even if he plays for a cellar-dwelling team. And a .150 hitter should get no reward – even if he plays for a pennant winner.
39.The critical investment factor is determining the intrinsic value of a business and paying a fair or bargain price.
40.Risk can be greatly reduced by concentrating on only a few holdings.
41.Stop trying to predict the direction of the stock market, the economy, interest rates, or elections.
42.Many stock options in the corporate world have worked in exactly that fashion: they have gained in value simply because management retained earnings, not because it did well with the capital in its hands.
43.Buy companies with strong histories of profitability and with a dominant business franchise.
44.Be fearful when others are greedy and greedy only when others are fearful.
45.It is optimism that is the enemy of the rational buyer.
46.As far as you are concerned, the stock market does not exist. Ignore it.
47.The ability to say no is a tremendous advantage for an investor.
48.Much success can be attributed to inactivity. Most investors cannot resist the temptation to constantly buy and sell.
49.Lethargy, bordering on sloth should remain the cornerstone of an investment style.
50.An investor should act as though he had a lifetime decision card with just twenty punches on it.
51.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.
52.As a group, lemmings have a rotten image, but no individual lemming has ever received bad press.
53.An investor needs to do very few things right as long as he or she avoids big mistakes.     Turn-arounds seldom turn.
54.Is management rational?
55.Is management candid with the shareholders?
56.Does management resist the institutional imperative?
57.Do not take yearly results too seriously. Instead, focus on four or five-year averages.
58.Focus on return on equity, not earnings per share.
59.Calculate owner earnings to get a true reflection of value.
60.Look for companies with high profit margins.
61.Growth and value investing are joined at the hip.
62.The advice you never go broke taking a profit is foolish.
63.It is more important to say no to an opportunity, than to say yes.
64.Always invest for the long term.
65.Does the business have favourable long term prospects?
66.It is not necessary to do extraordinary things to get extraordinary results.
67.Remember that the stock market is manic-depressive.
68.Buy a business, don’t rent stocks.
69.Does the business have a consistent operating history?
70.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.

Share and Enjoy:
  • Print
  • Digg
  • del.icio.us
  • Facebook
  • Google Bookmarks
  • MySpace
  • StumbleUpon
  • Twitter
  • LinkedIn

Related Posts


Tagged With , , , , , , , , ,