The Quotes and Wisdom of Warren Buffett

The Quotes and Wisdom of Warren Buffett explained by professional Forex trading experts the “ForexSQ” FX trading team. 

The Quotes and Wisdom of Warren Buffett

  • You are neither right nor wrong because the crowd disagrees with you. You are right because your data and reasoning are right.
  • We do not view the company itself as the ultimate owner of our business assets but instead view the company as a conduit through which our shareholders own assets.
  • When Berkshire buys common stock, we approach the transaction as if we were buying into a private business.
  • Wide diversification is only required when investors do not understand what they are doing.
  • Accounting consequences do not influence our operating or capital-allocation decisions. When acquisition costs are similar, we much prefer to purchase $2 of earnings that are not reportable by us under standard accounting principles than to purchase $1 of earnings that are reportable.
  • Never invest in a business you cannot understand.
  • Unless you can watch your stock holding decline by 50% without becoming panic-stricken, you should not be in the stock market.
  • Why not invest your assets in the companies you really like? As Mae West said, “Too much of a good thing can be wonderful”.
  • (When speaking of managers and executive compensation) The .350 hitter expects, and also deserves, a big payoff for his performance – even if he plays for a cellar-dwelling team. And a .150 hitter should get no reward – even if he plays for a pennant winner.
  • The critical investment factor is determining the intrinsic value of a business and paying a fair or bargain price.
  • Risk can be greatly reduced by concentrating on only a few holdings.
  • Stop trying to predict the direction of the stock market, the economy, interest rates, or elections.
  • Many stock options in the corporate world have worked in exactly that fashion: they have gained in value simply because management retained earnings, not because it did well with the capital in its hands.
  • Buy companies with strong histories of profitability and with a dominant business franchise.
  • Be fearful when others are greedy and greedy only when others are fearful.
  • It is optimism that is the enemy of the rational buyer.
  • As far as you are concerned, the stock market does not exist. Ignore it.
  • The ability to say “no” is a tremendous advantage for an investor.
  • Much success can be attributed to inactivity. Most investors cannot resist the temptation to constantly buy and sell.
  • Lethargy, bordering on sloth should remain the cornerstone of an investment style.
  • An investor should act as though he had a lifetime decision card with just twenty punches on it.
  • Wild swings in share prices have more to do with the “lemming- like” behaviour of institutional investors than with the aggregate returns of the company they own.
  • As a group, lemmings have a rotten image, but no individual lemming has ever received bad press.
  • An investor needs to do very few things right as long as he or she avoids big mistakes.
  • “Turn-arounds” seldom turn.
  • Is management rational?
  • Is management candid with the shareholders?
  • Does management resist the institutional imperative?
  • Do not take yearly results too seriously. Instead, focus on four or five-year averages.
  • Focus on return on equity, not earnings per share.
  • Calculate “owner earnings” to get a true reflection of value.
  • Look for companies with high profit margins.
  • Growth and value investing are joined at the hip.
  • The advice “you never go broke taking a profit” is foolish.
  • It is more important to say “no” to an opportunity, than to say “yes”.
  • Always invest for the long term.
  • Does the business have favourable long-term prospects?
  • It is not necessary to do extraordinary things to get extraordinary results.
  • Remember that the stock market is manic-depressive.
  • Buy a business, don’t rent stocks.
  • Does the business have a consistent operating history?
  • 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.

The Quotes and Wisdom of Warren Buffett Conclusion

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