Look for the big

Our exemplar is the older man who crashed his grocery cart into that of a much younger fellow while both were shopping. The elderly man explained apologetically that he had lost track of his wife and was preoccupied searching for her. His new acquaintance said that by coincidence his wife had also wandered off and suggested that it might be more efficient if they jointly looked for the two women. Agreeing, the older man asked his new companion what his wife looked like. "She’s a gorgeous blonde," the fellow answered, "with a body that would cause a bishop to go through a stained glass window, and she’s wearing tight white shorts. How about yours?" The senior citizen wasted no words: “Forget her, we’ll look for yours.

- Warren Buffett

Buffett’s investment philosophy ...

Whenever we buy common stocks...we approach the transaction as if we were buying into a private business. We look at the economic prospects of the business, the people in charge of running it, and the price we must pay. We do not have in mind any time or price for sale. Indeed, we are willing to hold a stock indefinitely so long as we expect the business to increase in intrinsic value at a satisfactory rate. When investing, we view ourselves as business analysts — not as market analysts, not as macroeconomic analysts and not even as security analysts.

- Warren Buffett

Market quotes

(Remember) the market is there to serve us, not instruct us. It just tells us prices. If something is out of line, then you can do something about it - the critical part is how you handle that piece of information, how you play out your hand. Let the market serve you rather than instruct you, and you can’t miss.

- Warren Buffett

You are correct because....

Being contrarian has no special value over being a trend follower. You are correct because the facts are right. In focusing on business and investment decisions, look for things that are important and knowable.

- Warren Buffett

Commodity boom

We have failed to profit from one of the biggest commodity booms in history and will probably continue to fail in that way.

- Charles Munger

Bear Markets

I buy stocks when the lemmings are headed the other way.

- Warren Buffett

Condition to buy a stock

Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.

- Warren Buffett

Successful Investor

The courage to press on, regardless of whether we face the calm seas or rough seas, and especially when the market storms howl around us, is the quintessential attribute of the successful investor.

- John C. Bogle

Investments

The best way to think about investments is to be in a room with no one else and just think...if that doesn't work, nothing else will.

- Warren Buffett

Rearview Mirror vs Windshield

In the business world, the rearview mirror is always clearer than the windshield.

- Warren Buffett

Margin of Saftey

Confronted with the challenge to distil the secret of sound investment into three words, we venture the motto, Margin of Safety.

- Benjamin Graham

Concentration and Diversification

Diversification may preserve wealth, but concentration builds wealth.

- Warren Buffett

Emotions and Investors

Individuals who cannot master their emotions are ill-suited to profit from the investment process.

- Benjamin Graham

Time to buy

I've found that when the markets are going down and you buy funds wisely, at some point in the future you will be happy. You won't get there by reading 'Now is the time to buy'. These things never go off that way.

- Peter Lynch

Understand and don't understand

You have to segregate businesses you can understand and reasonably predict from those you don’t understand and can’t reasonably predict. An example is chewing gum versus software.

- Warren Buffett

Long term and standard deviation

A percentage point added to your long-term return is priceless. A percentage point added to your standard deviation is meaningless. To equate the meaningless to the priceless one for one strikes me as being absurd.

- John Bogle

Owner of shares

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

- Warren Buffett

Time the friend

Time is the friend of the wonderful company, the enemy of the mediocre.

- Warren Buffett

The Lord and the market

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.

- Warren Buffett

Investigate and Invest

Before you invest, investigate.

- Warren Buffett

Difficult business

In a difficult business, no sooner is one problem solved than another surfaces.

- Warren Buffett

Perverse human characteristic

There seems to be some perverse human characteristic that likes to make easy things difficult.

- Warren Buffett

What and at what price

We have tried occasionally to buy toads at bargain prices with results that have been chronicled in past reports. Clearly our kisses fell flat. We have done well with a couple of princes - but they were princes when purchased. At least our kisses didn't turn them into toads. And, finally, we have occasionally been quite successful in purchasing fractional interests in easily-identifiable princes at toad-like prices.

- Warren Buffett

Turnarounds

Both our operating and investment experience cause us to conclude that 'turnarounds' seldom turn, and that the same energies and talent are much better employed in a good business purchased at a fair price than in a poor business purchased at a bargain price.

- Warren Buffett

Market: Voting machine as well as Weighing machine

...in the short term, the market is a 'voting' machine (whereon countless individuals register choices that are product partly of reason and partly of emotion), however in the long-term, the market is a 'weighing' machine (on which the value of each issue (business) is recorded by an exact and impersonal mechanism).

- Benjamin Graham

Keep it away from heart

Should you find yourself in a chronically-leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks.

- Warren Buffett

Stock Prices

Basically, price fluctuations have only one significant meaning for the 'true' investor. They provide him an opportunity to buy wisely when prices fall sharply and to sell wisely when they advance a great deal. At other times he will do better if he forgets about the stock market and pays attention to his dividend returns and to the operating results of his companies.

- Benjamin Graham

Management and Business

If a management with a good reputation tackles a bad business, it is the reputation of the business that remains intact.

- Warren Buffett

Institutional Investors

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'.

- Warren Buffett