Downturn is an opportunity

A market downturn, doesn't bother us. For us and our long term investors, it is an opportunity to increase our ownership of great companies with great management at good prices. Only for short term investors and market timers is a correction not an opportunity.

- Warren Buffett

Independence of solitude in the midst of crowd

It is easy in the world to live after the world's opinion; it is easy in solitude to live after our own; but the great man is he who in the midst of the crowd keeps with perfect sweetness the independence of solitude.

- Ralph Waldo Emerson

Believe nothing unless it agrees with your own reason

Believe nothing, no matter where you read it, or who said it, no matter if I have said it, unless it agrees with your own reason and your own common sense.

- Gautama Buddha

Buy it today, if it is attractive

If I find something that is attractive today, I am going to buy it today. I am not going to wait and hope that it sells cheaper 6 months from now. Because who knows when stocks will hit a low or a high? Nobody knows that. All you know is whether you're getting enough for your money or not.

- Warren Buffett

Investor's misery index

The inflation rate plus the percentage of capital that must be paid by the owner to transfer into his own pocket the annual earnings achieved by the business (i.e., ordinary income tax on dividends and capital gains tax on retained earnings) - can be thought of as an "investor's misery index". When this index exceeds the rate of return earned on equity by the business, the investor's purchasing power (real capital) shrinks even though he consumes nothing at all. We have no corporate solution to this problem; high inflation rates will not help us earn higher rates of return on equity.

- Warren Buffett

The key to making money in stocks is not to get scared out of them.

- Peter Lynch

Derivatives business

Upon leaving the derivatives business, our feelings about the business mirrored a line in a country song: "I liked you better before I got to know you so well."

- Warren Buffett

Investor & Speculator

If you're an investor, you're looking on what the asset is going to do, if you're a speculator, you're commonly focusing on what the price of the object is going to do, and that's not our game.

- Warren Buffett

Feudal structure was responsible

What happened in Satyam is that it was a huge scandal. Nobody could stand up and say, what is happening is wrong. Even those who thought what was happening is wrong did not have the courage and were not in an environment to say that it was wrong.

- N.R. Narayana Murthy

Money

Money to some extent sometimes let you be in more interesting environments. But it can't change how many people love you or how healthy you are.

- Warren Buffett

Opportunity and the means to grab it

One lucky break, or one supremely shrewd decision-can we tell them apart?-may count for more than a lifetime of journeyman efforts. But behind the luck, or the crucial decision, there must usually exist a background of preparation and disciplined capacity... these opportunities will knock at his particular door. One must have the means, the judgment, and the courage to take advantage of them.

- Benjamin Graham

Savings account better than this management

We find nothing particularly noteworthy in a management performance combining, say, a 10% increase in equity capital and a 5% increase in earnings per share. After all, even a totally dormant savings account will produce steadily rising interest earnings each year because of compounding.

- Warren Buffett

Accounting issues

Managers thinking about accounting issues should never forget one of Abraham Lincoln's favorite riddles:

How many legs does a dog have if you call his tail a leg?

The answer: Four, because calling a tail a leg does not make it a leg.

- Warren Buffett

Past history

If past history was all there was to the game, the richest people would be librarians.

- Warren Buffett

Goal

Your goal as an investor should simply be to purchase, at a rational price, a part interest in an easily-understandable business whose earnings are virtually certain to be materially higher five, ten and twenty years from now. Put together a portfolio of companies whose aggregate earnings march upward over the years, and so also will the portfolio's market value.

- Warren Buffett

Prosperity and Depression

You do not gain as much from periods of unusual prosperity as you lose in periods of depression when you are in business. That is almost an axiom.

- Benjamin Graham

Inside information

Get inside information from the president and you will probably lose half your money. If you get it from the chairman of the board, you will lose all of your money.

- Jim Rogers

The herd follows the foolish leader

Of one thing be certain: if a CEO is enthused about a particularly foolish acquisition, both his internal staff and his outside advisors will come up with whatever projections are needed to justify his stance. Only in fairy tales are emperors told that they are naked.

- Warren Buffett

Fate of US Treasury Bonds

I am waiting to short them again. I have no idea when. US government bonds are going to be one of the great shorts of our time somewhere down the road.

- Jim Rogers

Investing: Entertaining or Boring?

If investing is entertaining, if you're having fun, you're probably not making any money. Good investing is boring.

- George Soros

Unsustainable debt dynamics

Whenever you persistently consume more than your income year after year (a household with negative savings, a government with budget deficit, a firm or financial institution with persistent losses, a country with a current account deficit) you are playing a Ponzi game. In the jargon of formal economics, you are not satisfying your long-run inter-temporal budget constraint as you borrow to finance the interest rate on your previous debt, and are thus following an unsustainable debt dynamics that eventually leads to outright insolvency.

- Nouriel Roubini

Shall become the Ponzi government if ...

A government that will issue trillions of dollars of new debt to pay for this severe recession and socialize private losses may risk becoming a Ponzi government if - in the medium term - it does not return to fiscal discipline and debt sustainability.

- Nouriel Roubini

Madoff is us and Mr.Ponzi is us

Madoff may now spend the rest of his life in prison. U.S. households, financial and non-financial firms, and government may spend the next generation in debtor's prison having to tighten their belts to pay for the losses inflicted by a decade or more of reckless leverage, over-consumption and risk-taking.

Americans, let us look at ourselves in the mirror: Madoff is us and Mr. Ponzi is us!

- Nouriel Roubini

To keep from following the crowd...

The intelligent investor is likely to need considerable willpower to keep from following the crowd.

- Benjamin Graham

Business which can support mistakes

It is comforting to be in a business where some mistakes can be made and yet a quite satisfactory overall performance can be achieved. In a sense, this is the opposite case from our textile business where even very good management probably can average only modest results. One of the lessons your management has learned - and, unfortunately, sometimes re-learned - is the importance of being in businesses where tailwinds prevail rather than headwinds.

- Warren Buffett

Investment opinion

The standing of an enterprise is in part a matter of fact and part a matter of opinion. During recent years investment opinion has proved extraordinarily volatile and undependable.

- Benjamin Graham

Dangerous for CEOs to predict growth

Charlie and I think it is both deceptive and dangerous for CEOs to predict growth rates for their companies. They are, of course, frequently egged on to do so by both analysts and their own investor relations departments. They should resist, however, because too often these predictions lead to trouble.

- Warren Buffett

Being an Investor or a Business Manager

Understanding how to be a good investor makes you a better business manager and vice versa.

- Charles Munger

Investment and speculation becomes blurred when ...

The line separating investment and speculation, which is never bright and clear, becomes blurred still further when most market participants have recently enjoyed triumphs. Nothing sedates rationality like large doses of effortless money.

- Warren Buffett

The dumbest reason to buy a stock is ...

For some reason, people take their cues from price action rather than from values. What doesn't work is when you start doing things that you don't understand or because they worked last week for somebody else. The dumbest reason in the world to buy a stock is because it's going up.

- Warren Buffett

Are 'Growth' and 'Value' contrasting approaches?

Growth can destroy value if it requires cash inputs in the early years of a project or enterprise that exceed the discounted value of the cash that those assets will generate in later years... those who glibly refer to "growth" and "value" styles as contrasting approaches to investment are displaying their ignorance. Growth is simply a component-usually a plus, sometimes a minus-in the value equation.

- Warren Buffett

What is good for croupier is not good for the customer

One of the ironies of the stock market is the emphasis on activity. Brokers, using terms such as 'marketability' and 'liquidity', sing the praises of companies with high share turnover, but investors should understand that what is good for the croupier is not good for the customer. A hyperactive stock market is the pick pocket of enterprise.

- Warren Buffett

Virtues and the directions

It is no difficult trick to bring a great deal of energy, study, and native ability into Wall Street and to end up with losses instead of profits. These virtues, if channeled in the wrong directions, become indistinguishable from handicaps.

- Benjamin Graham

Learning and re-learning

We all are learning, modifying, or destroying ideas all the time. Rapid destruction of your ideas when the time is right is one of the most valuable qualities you can acquire. You must force yourself to consider arguments on the other side.

- Charles Munger

Research a stock

Invest at least as much time and effort in choosing a new stock as you would in choosing a new refrigerator.

- Peter Lynch

Learn that there is company behind every stock

I think you have to learn that there’s a company behind every stock, and that there’s only one real reason why stocks go up. Companies go from doing poorly to doing well or small companies grow to large companies.

- Peter Lynch

To be an investor for every purchase

The individual investor should act consistently as an investor and not as a speculator. This means... that he should be able to justify every purchase he makes and each price he pays by impersonal, objective reasoning that satisfies him that he is getting more than his money's worth for his purchase.

- Benjamin Graham

On stock bargains which are plentiful now.

You feel like a mosquito in a nudist colony.

- Peter Lynch

Time to buy

The time to buy is when there’s blood on the streets.

- Lord Rothschild

Economic forecasting

The only function of economic forecasting is to make astrology look respectable.

- John Kenneth Galbraith