Inspirational Quotes by Warren Buffett (Page 2 of 4)

If I subscribed to the efficient market theory I would still be delivering papers.

Uncertainty is the friend of the buyer of long term values.

The key to success is emotional stability.

Too often, executive compensation in the U.S. is ridiculously out of line with performance. That won't change, moreover, because the deck is stacked against investors when it comes to the CEO's pay.

If I taught a class, on my final exam I would take an Internet company and ask, 'How much is this company worth?' Anyone who would answer, I would flunk.

You don't need to have extraordinary effort to achieve extraordinary results. You just need to do the ordinary, everyday things exceptionally well.

I believe the chance of any event causing Berkshire to experience financial problems is essentially zero. We will always be prepared for the thousand-year flood; in fact, if it occurswe will be selling life jackets to the unprepared.

I look for businesses in which I think I can predict what they're going to look like in ten to fifteen years time. Take Wrigley's chewing gum. I don't think the internet is going to change how people chew gum.

It's important to have the right monetary policy. It's important for, to have the right fiscal policy. But it's nowhere near as important as just the normal regenerative capacity of American capitalism.

I mean Franklin Delano Roosevelt didn't -- you know, when he came in, he didn't print any money.

Do not take yearly results too seriously. Instead, focus on four or five-year averages.

I will give you two pieces of advice. Invest as much in yourself as you can; you are your own best asset by far. Then follow your passion; you want to be really excited to get out of bed every morning.

If you've got the power to raise prices without losing business to a competitor, you've got a very good business. And if you have to have a prayer session before raising the price by a tenth of a cent, then you've got a terrible business. I've been in both, and I know the difference.

You'd get very rich if you thought of yourself as having a card with only twenty punches in a lifetime, and every financial decision used up one punch. You'd resist the temptation to dabble. You'd make more good decisions and you'd make more big decisions.

We have learned to turn out lots of goods and services, but we haven't learned as well how to have everybody share in the bounty. The obligation of a society as prosperous as ours is to figure out how nobody gets left too far behind.

If you are a professional and have confidence, then I would advocate lots of concentration.

I think the FDIC was one of the great inventions of the American.

If you have a great manager, you want to pay him very well.

Most investors, both institutional and individual, will find that the best way to own common stocks (shares') is through an index fund that charges minimal fees. Those following this path are sure to beat the net results (after fees and expenses) of the great majority of investment professionals.

If you invested in a very low cost index fund -- where you don't put the money in at one time, but average in over 10 years -you'll do better than 90% of people who start investing at the same time.

A low-cost index fund is the most sensible equity investment for the great majority of investors. My mentor, Ben Graham, took this position many years ago, and everything I have seen since convinces me of its truth.

The best way in my view is to just buy a low-cost index fund and keep buying it regularly over time, because you'll be buying into a wonderful industry, which in effect is all of American industry... People ought to sit back and relax and keep accumulating over time.

By periodically investing in an index fund, the know-nothing investors can actually outperform most investment professionals.

The three most important words in investing...Margin of Safety.

You get what I call the natural progression, the three Is. The innovators, the imitators, and the idiots.

The speed at which a business success is recognized, furthermore, is not that important as long as the company's intrinsic value is increasing at a satisfactory rate. In fact, delayed recognition can be an advantage: It may give us the chance to buy more of a good thing at a bargain price.

The critical investment factor is determining the intrinsic value of a business and paying a fair or bargain price.

Buy into a company because you want to own it, not because you want the stock to go up.

Nothing sedates rationality like large doses of effortless money.

Our approach is very much profiting from lack of change rather than from change.

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.

Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can't buy what is popular and do well.

Investors should remember that excitement and expenses are their enemies.

It isn't given to man to be able to run a financial institution where different interest-rate scenarios will prevail on all of that so as to produce kind of smooth, regular earnings from a very large base to start with.

We do not have, nor have had, and never will have an opinion about where the stock market, interest rates, or business activity will be a year from now.

I do not like debt and do not like to invest in companies that have too much debt, particularly long-term debt. With long-term debt, increases in interest rates can drastically affect company profits and make future cash flows less predictable.

They say the chains of habit are too light to be felt until they are too heavy to be broken. The chains you put around yourself now have enormous consequences as you go through life.

John Maynard Keynes essentially said, don't try and figure out what the market is doing. Figure out a business you understand, and concentrate.

We have embraced the 21st century by entering such cutting-edge industries as brick, carpet, insulation and paint. Try to control your excitement.

Just imagine living on 21,000 a year. I mean you have 20 percent of the population doing that. So you don't have to worry about guys like me.

Businesses always have opportunities to improve service, product lines, manufacturing techniques, and the like, and obviously these opportunities should be seized. But a business that constantly encounters major change also encounters many chances for major error.

We have usually made our best purchases when apprehensions about some macro event were at a peak. Fear is the foe of the faddist, but the friend of the fundamentalist.

This economy doesn't work well without the lubrication of credit and trust.

I don't want to hold out false hopes that the -- by some magic moment, that things will turn around in a couple months because they wouldn't, Charlie. I mean, and it's a big mistake to try and mislead people.

Our stay-put behavior reflects our view that the stock market serves as a relocation center at which money is moved from the active to the patient.

I measure success by how many people love me. And the best way to be loved is to be lo veable.

I may have more money than you, but money doesn't make the difference. If
there is any difference between you and me, it may simply be that I get up and have a chance to do what I love to do, every day. If you learn anything from me, this is the best advice I can give you.

I want to be able to explain my mistakes. This means I do only the things I completely understand.

If you don't feel comfortable making a rough estimate of the asset's future earnings, just forget it and move on. No one has the ability to evaluate every investment possibility. But omniscience isn't necessary; you only need to understand the actions you undertake.

The plan itself is opportunism. There is no plan before that.

He must never forget Charlie's plea: Tell me where I'm going to die, so I'll never go there.

When people tell me they've learned from experience, I tell them the trick is to learn from other people's experience.

House prices just soared beyond -- beyond reason in many places and they got financed in silly ways, and people lied about loans, all kinds of accesses entered into it. But that is what -- that is the single biggest cause of why we're here.

The great personal fortunes in the country weren't built on a portfolio of fifty companies. They were built by someone who identified one wonderful business. With each investment you make, you should have the courage and the conviction to place at least 10% of your net worth in that stock.

If you expect to continue to purchase stocks throughout your life, you should welcome price declines as a way to add stocks more cheaply to your portfolio.

If we have a strength, it is in recognizing when we are operating well within our circle of competence and when we are approaching the perimeter.

Investing in a market where people believe in efficiency is like playing bridge with someone who has been told it doesn't do any good to look at the cards.

You do not adequately protect yourself by being half awake when other are sleeping.

What motivates most gold purchasers is their belief that the ranks of the fearful will grow ... As 'bandwagon' investors join any party, they create their own truth -- for a while.

I could end the deficit in 5 minutes. You just pass a law that says that anytime there is a deficit of more than 3% of GDP all sitting members of congress are ineligible for reelection.

We've been in a recession, by any common sense definition, because if you look at the American public, they've got 20 billion -- 20 trillion, I should say, worth of residential homes.

I think it will get moving faster. I mean once you get it off the -- once credit flows -- now the recession is going to get worse.

I am not worried about the country. I'm just worried about anything that gums up the potential of the country. And right now, it's pretty gummed up.

It's the deleveraging that's going on right now that has caused the credit crisis.

It is not necessary to do extraordinary things to get extraordinary results.

If you aren't willing to own a stock for ten years, don't even think about owning it for ten minutes. Put together a portfolio of companies whose aggregate earnings march upward over the years, and so also will the portfolio's market value.

I think you are out of your mind if you keep taking jobs that you don't like because you think it will look good on your resume. Isn't that a little like saving up sex for your old age?

Time is your friend, impulse is your enemy. Take advantage of compound interest and don't be captivated by the siren song of the market.

I checked the actuarial tables, and the lowest death rate is among six-year-olds. So I decided to eat like a six-year-old.

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.

You should look at stocks as small pieces of business.

In the insurance business, there is no statute of limitation on stupidity.

Diversification is a protection against ignorance. It makes very little sense for those who know what they're doing.

People will always try to stop you from doing the right thing if it is unconventional.

An investor will succeed by coupling good business judgment with an ability to insulate his thoughts and behavior from the super-contagious emotions that swirl about the marketplace.

I've worked in an economy that rewards someone who saves the lives of others on a battlefield with a medal, rewards a great teacher with thank-you notes from parents, but rewards those who can detect the mispricing of securities with sums reaching into the billions.

It's us fun being a horse when the tractor comes along, or the blacksmith when the car comes along.

When 40 billion of treasury bills are sold like, seven day treasury bills, at a yield of 1 20th of one percent, that means the whole country is basically at the point virtually, or a lot of the country is at the point of putting the money under the mattress.

At this point, when treasury bills, seven day treasury bills at 1 20th of one percent, it's not because people want to earn 1 20th of one percent, it's because they trust the fact the treasury will give it back to them next week.

In an inflationary world, a toll bridge (like company) would be a great thing to own because you've laid out the capital costs. You built it in old dollars and you don't have to keep replacing it.

If anything, taxes for the lower and middle class and maybe even the upper-middle class should even probably be cut further. But I think that people at the high end -- people like myself -- should be paying a lot more in taxes. We have it better than we've ever had it.

Asset values and earning power are the dominant factors affecting the valuation of a controlling interest in a business. Market price, which governs valuation of minority interest positions, is of little or no importance in valuing a controlling interest.

Banking is very good business if you don't do anything dumb.

If you don't make mistakes you can't make decisions.

In our view, derivatives are financial weapons of mass destruction carrying dangers that, while latent, are potentially lethal.

Anything can happen anytime in markets. And no advisor, economist, or TV commentator-and definitely not Charlie nor I-can tell you when chaos will occur. Market forecasters will fill your ear but will never fill your wallet.

I will do anything that is basically covered by the law to reduce Berkshire's tax rate. For example, on wind energy, we get a tax credit if we build a lot of wind farms. That's the only reason to build them. They don't make sense without the tax credit.

There's no use running if you're on the wrong road.

Knowing the edge of your competency is important. If you think you know more than you do, you will get in trouble.

I mean, if Pearl Harbor came along, you could have said the planning was wrong by the military ahead of time or maybe the battleships shouldn't have all been in the harbor and all that kind of thing.

You pay a very high price in the stock market for a cheery consensus.

Successful Investing takes time, discipline and patience. No matter how great the talent or effort, some things just take time: You can't produce a baby in one month by getting nine women pregnant.

If you have a harem of 40 women, you never get to know any of them very well.

Buy stocks like you buy your groceries, not like you buy your perfume.

Having first rate people on the team is more important than designing hierarchies and clarifying who reports to whom.

I mean, you know, you're not going to change the human animal. And the human animal really doesn't get a lot smarter.

We've seen what can be accomplished when we use 50% of our human capacity. If you visualize what 100% can do, you'll join me as an unbridled optimist about America's future.

The secret to happiness is having low expectations.

All but a few of the organizations do not specifically promise to deliver superior investment performance although it is perhaps not unreasonable for the public to draw such an inference from their advertised emphasis on professional management.

But 300 million Americans, their lending institutions, their government, their media, all believed that house prices were going to go up consistently. And that got billed into a $20 trillion residential home market. Lending was done based on it, and everybody did a lot of foolish things.

I mean, you may be very mad at some guy that walked away with a huge golden parachute, but that really isn't the important thing.

In my view, the trade deficit will create political turmoil at some point...Pretty soon, I think there will be a big adjustment.

In my opinion, the entire field of investment management, involving hundreds of billions of dollars, would be more satisfactorily conducted if everyone had a good yardstick for measurement of ability and sensibly applied it.

There are three kinds of people: 1. Innovators. 2. Imitators. 3. Idiots.

OUR leaders have asked for shared sacrifice. But when they did the asking, they spared me. I checked with my mega-rich friends to learn what pain they were expecting. They, too, were left untouched.

I think I could make you fifty percent a year on one million dollars. No, I know I could. I guarantee that.

What the human being is best at doing is interpreting all new information so that their prior conclusions remain intact.

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.'

An irresistable footnote: in 1971, pension fund managers invested a record 122% of net funds available in equities -- at full prices they couldn't buy enough of them. In 1974, after the bottom had fallen out, they committed a then record low of 21% to stocks.

You're dealing with a lot of silly people in the marketplace; it's like a great big casino and everyone else is boozing. If you can stick with Pepsi, you should be OK.

It's a big mistake to try and mislead people. They will turn around.

When forced to choose, I will not trade even a night's sleep for the chance of extra profits.

The capital gains tax is 15 percent now. So I sit there in my office and I make a lot of money by capital gains, and I pay 15 percent, and I pay no payroll tax on it.

We're paying maybe 25 percent of the income tax, but the payroll tax is over a third of the receipts of the federal government. And they don't take that from me on capital gains. They don't take that from me on dividends.

Asset-heavy businesses generally earn low rates of return -- rates that often barely provide enough capital to fund the inflationary needs of the existing business, with nothing left over for real growth, for distribution to owners, or for acquisition of new businesses.

I have this complicated procedure I go through every morning, which is to look in the mirror and decide what I'm going to do. And I feel at that point, everybody's had their say.

The latter qualification brings to mind a fellow who applied for a job and stated he had twenty years of experience-which was corrected by a former employer to read one year's experience-twenty times.

Buy companies with strong histories of profitability and with a dominant business franchise.

When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.

The nature of democracy is such that when there's -- there'll be revulsion, obviously, towards -- that's never going to happen again.

The single most important decision in evaluating a business is pricing power.