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.
Posts in the “investing” category
This is a reference page of what I know about “moving averages” in stock market investing. This includes simple moving averages, exponential moving averages, and how to use this data to support buying and selling stocks. I also touch on MACD.
As a brief lesson on “the time value of money,” I’ve paid over $175,000 for caregiving services for my mom, which has forced me to sell my beloved Apple stock (which I had owned since 2009), as well as some Shopify stock that has multiplied even more than Apple. As you can easily tell from this one image, that $175,000 — which I started paying in 2014 — would be worth well over $1,000,000 today.
So, as an example, if I could have kept that $175,000 in the market at the beginning of 2017, it would be worth at least 5x since that time. This is one example of why a certain amount of money now can be worth much more.
Conversely, if you just keep your money in the bank, with the cost of living increasing at about 4% per year, $1 in 2003 is worth about 50 cents today. (Using the “Rule of 72”.)
The book Business Adventures: Twelve Classic Tales from the World of Wall Street is one of the most highly recommended books by Warren Buffett. He told Bill Gates about it in 1991, and Mr. Gates calls it “the best business book he’s ever read.”
Many moons ago I thought I wrote an AppleScript script named GetStockUrls, whose sole purpose was to open many webpages from finance.yahoo.com at one time. I could run that script, then easily look at the stocks I owned.
Today I found that script on an old Mac computer, and when I did that I saw that I didn’t write it with AppleScript, but instead created it with the Mac Automator. This image shows all you have to do in the Mac Automator to achieve this result. On my current Mac this script opens the Safari browser and opens each URL shown in a new tab. I can then move between the tabs to see what I want to see, quickly and easily.
This image shows what the result looks like in the Safari browser:
This images comes from this good Seeking Alpha article on investing in “dividend” stocks. There are some good nuggets in that article, but (except for the formatting) I like these words and that chart.
I found this Warren Buffett quote in this Inc. Magazine article back in 2018:
“If you could invest in only one of your fellow classmates, who would you choose? If you could buy, say, 10% of the future earnings of just one classmate, who would you choose? What would you look for?”
The idea is that you won’t just necessarily look at raw IQ, you’ll look at other personality attributes, such as drive, ambition, and hopefully other attributes like honesty and integrity.
An investing company just sent me a very long email filled with hundreds of words and a dozen or more shiny pictures to show how successful they are. Not once did they mention what their return on investment (ROI) was for their investors — which is the only thing that matters.
As an investor, the only thing that matters to you is ROI after taxes; keep your eye on that ball, not the shiny pictures or fancy words.
I just learned that Warren Buffett’s shareholder letters can be found here in PDF format.
Motley Fool has an excellent collection of Jeff Bezos quotes going back to the 1990s.
This is a bit of a “one off” post for this website, but I’ve been investing a lot lately, and I created the following “Warren Buffett Way” cheatsheet to help me when deciding to invest in a company, or not.
As that title implies, this cheatsheet is based on the wonderful book, The Warren Buffett Way, by Robert S. Hagstrom, Jr.
I just ran across this chart from Morningstar that includes eight stocks with share repurchase programs. In general, I’m a fan of buying the stocks of companies that have share repurchase programs, but, you also have to look into the details of how and why they’re doing this, and you also have to understand the business behind each company. For instance, I’ve never heard of LB, so I looked them up, and I have no interest in investing in an apparel company, so immediately I scratch them off.
Other companies like CAH, MCK, and CVS (who suspended their share repurchase program to buy Aetna) are currently beaten down because of the threat that Amazon will enter their business space, so my first thought is that they’re buying back their stock because it’s at a significant discount. But again, you also have to look into their financials to see how they’re buying back their stock — is it from cash flow? Or are they borrowing money to buy their stock, and if so, how long will it take to pay off those loans?
“You are neither right nor wrong because the crowd disagrees with you. You are right because the data and reasoning are right.”
“Warren Buffett has become one hell of a lot better investor since the day I met him, and so have I. If we had been frozen at any given stage with the knowledge we had, the record would have been much worse than it is today. So the game is to keep learning, and I don’t think people are going to keep learning who don’t like the learning process. You need to like the learning process.”
This is another quote by Charlie Munger. It reminds me both of working on good programming teams, but also of learning from people that I haven’t enjoyed working with, but learned things from.
“Terribly smart people make totally bonkers mistakes.”
~ from the book, Charlie Munger, The Complete Investor
“In engineering, people have a big margin of safety. But in the financial (investing) world, people don’t give a damn about safety.”
~ from the book, Charlie Munger, The Complete Investor
Seeking Alpha has a good article on how the last eight corporate scandals/problems have affected their stock prices over time. Useful stats: “Excluding Facebook, the median length of the declines is 63 days. The median percentage decline is 35%.”
“A business that can grow its intrinsic value at 12 to 15% over an extended period of time will create tremendous wealth for its shareholders over time.”
“Long-term competitive advantage in a stable industry is what we seek in a business. If that comes with rapid organic growth, great. But even without organic growth, such a business is rewarding.”
That’s just two of the many good quotes about investing on this valuewalk.com web page. (Features quotes from Warren Buffett and Charlie Munger.)
This is a good quote about Warren Buffett-style investing:
They like to liken their process to a three-legged stool in terms of the kinds of companies they look for:
- The first leg of that stool is the business model that produces high free cash flow
- The second leg is shareholder-oriented management
- And the third leg is the ability to invest that high free cash flow in areas that will produce attractive rates of return