Warren Buffett, fully Warren Edward Buffett, aka Oracle of Omaha

Warren
Buffett, fully Warren Edward Buffett, aka Oracle of Omaha
1930

American Businessman, Investor and Philanthropist, Chairman and CEO of Berkshire Hathaway

Author Quotes

If Corporate America is serious about reforming itself, CEO pay remains the acid test... The results aren't encouraging.

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.

In the long run managements stressing accounting appearance over economic substance usually achieve little of either.

It seems to me she varied from the standard approach of securities analysts.

It's only when the tide goes out that you discover who's been swimming naked.

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'.

Now it's $200 billion. If we don't change the course, the rest of the world could own $15 trillion of us. That's pretty substantial. That's equal to the value of all American stock.

Our stay-put behavior reflects our view that the stock market serves as a relocation center at which money is moved from the active to the patient.

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.

The basic ideas of investing are to look at stocks as business, use the market's fluctuations to your advantage, and seek a margin of safety. That's what Ben Graham taught us. A hundred years from now they will still be the cornerstones of investing.

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. After a heady experience of that kind, normally sensible people drift into behavior akin to that of Cinderella at the ball. They know that overstaying the festivities — that is, continuing to speculate in companies that have gigantic valuations relative to the cash they are likely to generate in the future — will eventually bring on pumpkins and mice. But they nevertheless hate to miss a single minute of what is one helluva party. Therefore, the giddy participants all plan to leave just seconds before midnight. There’s a problem, though: They are dancing in a room in which the clocks have no hands.

If I was running $1 million today, or $10 million for that matter, I'd be fully invested. Anyone who says that size does not hurt investment performance is selling. The highest rates of return I've ever achieved were in the 1950s. I killed the Dow. You ought to see the numbers. But I was investing peanuts then. It's a huge structural advantage not to have a lot of money. I think I could make you 50% a year on $1 million. No, I know I could. I guarantee that.

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.

Instead, we try to apply Aesop's 2,600-year-old equation to opportunities in which we have reasonable confidence as to how many birds are in the bush and when they will emerge (a formulation that my grandsons would probably update to "A girl in a convertible is worth five in the phonebook.").

It was the ability to use the stock of Berkshire in a way that benefited the General Re shareholders without hurting the Berkshire shareholders,

It's simply to say that managers and investors alike must understand that accounting numbers are the beginning, not the end, of business valuation.

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.

Occasionally, a man must rise above principles.

Over that time we've been happy with that investment but I've got to tell you I'm happier today. It's a dream deal.

Some managers remain effective well into their 80s others noticeably fade in their 60s. When their abilities ebb, so usually do their powers of self-assessment.

The best assets you can have during inflation are your abilities.

The major asset in this category is gold, currently a huge favorite of investors who fear almost all other assets, especially paper money (of whose value, as noted, they are right to be fearful). Gold, however, has two significant shortcomings, being neither of much use nor procreative. True, gold has some industrial and decorative utility, but the demand for these purposes is both limited and incapable of soaking up new production. Meanwhile, if you own one ounce of gold for an eternity, you will still own one ounce at its end.

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

In a commodity business, its very hard to be smarter than your dumbest competitor.

Intrinsic value can be defined simply: It is the discounted value of the cash that can be taken out of a business during its remaining life. The calculation of intrinsic value, though, is not so simple. As our definition suggests, intrinsic value is an estimate rather than a precise figure, and it is additionally an estimate that must be changed if interest rates move or forecasts of future cash flows are revised.

Author Picture
First Name
Warren
Last Name
Buffett, fully Warren Edward Buffett, aka Oracle of Omaha
Birth Date
1930
Bio

American Businessman, Investor and Philanthropist, Chairman and CEO of Berkshire Hathaway