Think

We both (He and Warren Buffett) insist on a lot of time being available almost every day to just sit and think. That is very uncommon in American business. We read and think. So Warren and I do more reading and thinking and less doing than most people in business. We do that because we like that kind of a life.

- Charles Munger

Book Value

The book value deserves at least a fleeting glance by the public before it buys or sells shares in a business undertaking. In any particular case the message that the book value conveys may well prove to be inconsequential and unworthy of attention. But this testimony should be examined before it is rejected.

- Benjamin Graham

The prediction people

Thousands of experts study overbought indicators, oversold indicators, head-and-shoulder patterns, put-call ratios, the Fed's policy on money supply, foreign investment, the movement of the constellations through the heavens, and the moss on oak trees, and they can't predict markets with any useful consistency, any more than the gizzard squeezers could tell the Roman emperors when the Huns would attack.

- Peter Lynch

Confusing complexity: avoid

Ben's Mr. Market allegory may seem out-of-date in today's investment world, in which most professionals and academicians talk of efficient markets, dynamic hedging and betas. Their interest in such matters is understandable, since techniques shrouded in mystery clearly have value to the purveyor of investment advice. After all, what witch doctor has ever achieved fame and fortune by simply advising 'Take two aspirins'?

- Warren Buffett

Strength of character required for investment

It requires strength of character in order to think and to act in opposite fashion from the crowd and also patience to wait for opportunities that may be spaced years apart.

- Benjamin Graham

What is not a great managerial achievement

When returns on capital are ordinary, an earn-more-by-putting-up-more record is no great managerial achievement. You can get the same result personally while operating from your rocking chair. Just quadruple the capital you commit to a savings account and you will quadruple your earnings.

- Warren Buffett

Careful about the duck which quacks

In a bull market, one must avoid the error of the preening duck that quacks boastfully after a torrential rainstorm, thinking that its paddling skills have caused it to rise in the world. A right-thinking duck would instead compare its position after the downpour to that of the other ducks on the pond.

- Warren Buffett

What you need to follow the stock market

Everyone has the brainpower to follow the stock market. If you made it through fifth-grade math, you can do it.

- Peter Lynch

Confusing!

The disadvantages of ignorance, of human greed, of mob psychology, of trading costs, of weighting of the dice by insiders and manipulators, will in the aggregate far overbalance the purely theoretical superiority of speculation in that it offers profit possibilities in return for the assumption of risk.

- Benjamin Graham

Buying in a overheated market

Investors making purchases in an overheated market need to recognize that it may often take an extended period for the value of even an outstanding company to catch up with the price they paid.

- Warren Buffett

Is that the value of stock?

To suppose that the value of a common stock is determined purely by a corporation's earnings discounted by the relevant interest rates and adjusted for the marginal tax rate is to forget that people have burned witches, gone to war on a whim, risen to the defense of Joseph Stalin and believed Orson Wells when he told them over the radio that the Martians had landed.

- Jim Grant

Attractive opportunities

Attractive opportunities come from observing human behavior. In 1998, people behaved like frightened cavemen. People make their own opportunities. They will be frozen by fear, excited by greed and it doesn’t matter what their IQ, degrees etc is.

- Warren Buffett

In the past decade as well as in the current and future decades....

You would be amazed how compliant auditors have been in the past decade, not only cooperating but suggesting techniques for making numbers less useful - less truthful - to investors.

- Warren Buffett

Stock speculation

Stock speculation is largely a matter of A trying to decide what B, C and D are likely to think-with B, C and D trying to do the same.

- Benjamin Graham

The sequence of greed fear or folly

The fact that people will be full of greed, fear or folly is predictable. The sequence is not predictable.

- Warren Buffett

Make up the numbers

We are suspicious of those CEOs who regularly claim they do know the future – and we become downright incredulous if they consistently reach their declared targets. Managers that always promise to "make the numbers" will at some point be tempted to make up the numbers.

- Warren Buffett

Delayed recognition

The speed at which a business success is recognized 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.

- Warren Buffett

Money made by betting on the unexpected

Markets are constantly in a state of uncertainty and flux and money is made by discounting the obvious and betting on the unexpected.

- George Soros

Human nature

Even when the underlying motive of purchase is mere speculative greed, human nature desires to conceal this unlovely impulse behind a screen of apparent logic and good sense.

- Benjamin Graham

People to hire

In looking for people to hire, you look for three qualities: integrity, intelligence, and energy. And if they don't have the first, the other two will kill you. You think about it; it's true. If you hire somebody without the first, you really want them to be dumb and lazy.

- Warren Buffett

Own what you are comfortable with

If you don't feel comfortable owning something for 10 years, then don't own it for 10 minutes.

- Warren Buffett

Stocks with high PE

If you remember nothing else about p/e ratios, remember to avoid stocks with excessively high ones. A company with a high p/e must have incredible earnings growth to justify its high price.

- Peter Lynch