I’ve been an active investor in the stock market since the early 2000s, and almost everything I've learned can be found in the wonderful book, The Warren Buffett Way. Today I’d like to share some wonderful quotes from that book, along with many other wonder Warren Buffet quotes.
Quotes from “The Warren Buffet Way”
These are some of my favorite Warren Buffet quotes from this book:
- One does not have to be correct very many times ... 12 investment decisions have made all the difference.
- The critical investment factor is determining the intrinsic value of a business and paying a fair or bargain price.
- He is willing to take risks where the odds of total loss are low and upside rewards are substantial.
- If he is unable to project with confidence what the future cash flows of a business will be, he will not attempt to value the company.
- There is no fundamental difference between buying a business outright and buying shares in a business.
Related note: I have created a “Warren Buffet Way cheatsheet,” which summarizes many of the investment tips from that excellent book.
More Warren Buffet quotes
These are some of my other favorite Warren Buffet quotes, both from this book, along with other sources on the internet.
- Rule #1: Never lose money.
Rule #2: See Rule #1.
- Invest within your circle of competence.
- If a business does well, the stock eventually follows.
- Only buy something that you'd be perfectly happy to hold if the market shut down for 10 years.
- An investor needs to do very few things right as long as he or she avoids big mistakes.
- Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good results.
- Price is what you pay. Value is what you get.
- Be fearful when others are greedy, and greedy only when others are fearful.
- 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.
- Why not invest your assets in the companies you really like? As Mae West said, 'Too much of a good thing can be wonderful.'
- We enjoy the process far more than the proceeds.
- It's a huge structural advantage not to have a lot of money. I think I could make you 50% a year on $1 million. No, I know I could. I guarantee that.
- 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.
- Charlie and I decided long ago that in an investment lifetime it’s too hard to make hundreds of smart decisions ... therefore, we adopted a strategy that required our being smart — and not too smart at that — only a very few times. Indeed, we’ll now settle for one good idea a year.
- 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.
- If you don’t know jewelry, know the jeweler.
- If you don’t feel comfortable owning something for 10 years, then don’t own it for 10 minutes.
My comments related to the Warren Buffet investing style
In closing, here are the points I’ve learned from reading a lot about Warren Buffet, and from my own personal investing experience:
- I only investigate the stocks of companies I understand.
- When I buy a stock, I do a financial analysis where I assume I am going to buy the entire company. If that analysis pleases me, I buy their stock.
- (This helps me focus on the long-term, as opposed to short-term gains.)
- I only buy the stock of companies I like.
- If it seems like a company is hiding something in their financial reports, they probably are.