The friend and enemy: Time

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.

- Warren Buffett

Tribute to Bernake

Dashing in the air,
In a dollar-stocked plane
O'er the Wall St. he went
Laughing but in vain

Dollars on his wings
Making bankers’ spirits bright
What fun it was to throw
A doomed dollar that night

Oh, jingle bells, jingle bells
Jingle all the way
Santa ‘Ben’ is coming to town,
Riding on his plane

A month or two ago
We thought we'd take the ride
And soon recession came
No place was left to hide

The cost is 'zero' now
So borrow as much as you can
And if you can’t repay
Think of ‘Ben’ again

Oh, jingle bells, jingle bells
Jingle all the way
Santa ‘Ben’ is coming to town,
Riding on his plane.

equitymaster

Reputation

It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently.

- Warren Buffett

Deterioration in companies

When companies deteriorate, they usually do so for one of two reasons: Either there has been a deterioration of management, or the company no longer has the prospect of increasing the markets for its product in the way it formerly did.

- Philip Fisher

When to buy and when to sell

When ten people would rather talk to a dentist about plaque than to the manager of an equity mutual fund about stocks, it's likely that the market is about to turn up. When the neighbours tell me what to buy and then I wish I had taken their advice, it's a sure sign that the market has reached a top and is due for a tumble.

- Peter Lynch

Stock forecasters

We've long felt that the only value of stock forecasters is to make fortune tellers look good. Even now, Charlie (Munger) and I continue to believe that short-term market forecasts are poison and should be kept locked up in a safe place, away from children and also from grown-ups who behave in the market like children.

- Warren Buffett

Value stocks and grass

Value stocks are about as exciting as watching grass grow. But have you ever noticed just how much your grass grows in a week?

- Christopher Browne

Oppurtunity to learn some very old lessons

A pin lies in wait for every bubble and when the two eventually meet, a new wave of investors learns some very old lessons.

- Warren Buffett

Stock prices

Just because the price goes up doesn't mean you're right. Just because it goes down doesn't mean you're wrong. Stock prices often move in opposite directions from the fundamentals but long term the direction and sustainability of profits will prevail.

- Peter Lynch

Mattress in use: In USA

Most investors know Warren Buffett for his investing acumen. But few know that his sense of humor is equally legendary. The directors of his company, Berkshire Hathaway got a taste of the same when they received an email from the Oracle of Omaha. On learning that the US Treasury sold US$ 32 bn by way of 4-week bills at a yield of 0% - yes, you’ve read it right – he is believed to have said, "This should be bullish for Berkshire. With great foresight, I long ago entered the mattress business in a big way through our furniture operation. Now mattresses have become fully competitive as a place to put your money, and sales will soon take off." Indeed, with investors getting virtually nothing from their fixed return investments by way of interest rates, putting once hard earned money under a mattress seems a far better idea than depositing the same in banks.

Fourth law of motion

Long ago, Sir Isaac Newton gave us three laws of motion, which were the work of genius. But Sir Isaac's talents didn't extend to investing: He lost a bundle in the South Sea Bubble, explaining later, 'I can calculate the movement of the stars, but not the madness of men.' If he had not been traumatized by this loss, Sir Isaac might well have gone on to discover the Fourth Law of Motion: For investors as a whole, returns decrease as motion increase.

- Warren Buffett

Help people

Help people. When people are desperately trying to sell, help them and buy. When people are enthusiastically trying to buy, help them and sell.

- Sir John Templeton

Market prices are frequently nonsensical

When the price of a stock can be influenced by a ‘herd’ on Wall Street with prices set at the margin by the most emotional person, or the greediest person, or the most depressed person, it is hard to argue that the market always prices rationally. In fact, market prices are frequently nonsensical.

- Warren Buffett

The company to own

If you can find a company that can get away with raising prices year after year without losing customers (an addictive product such as cigarettes fills the bill), you've got a terrific investment.

- Peter Lynch

Anger

Anger tends to cloud judgement.

- Mahatma Gandhi

Eye for an eye

An eye for an eye, merely makes the whole world blind.

- Mahatma Gandhi

Forecasting

Accurately forecasting swings in investors’ emotions is not possible. But forecasting the long-term economics of investing carries remarkably huge odds of success.

- John Bogle