Great Throughts Treasury

"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 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."

"In fact, when we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever."

"In allocating capital, activity does not correlate with achievement."

"In investing, just as in baseball, to put runs on the scoreboard, one must watch the playing field, not the scoreboard."

"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."

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

"In making this acquisition of Business Wire, we have followed our blueprint of buying profitable companies that are industry leaders, yet have significant growth potential."

"In looking for someone to hire, you look for three qualities: integrity, intelligence, and energy. But the most important is integrity, because if they don't have that, the other two qualities, intelligence and energy, are going to kill you."

"In most boardrooms, collegiality trumped independence... would be like belching at the dinner table."

"In some corner of the world they are probably still holding regular meetings of the Flat Earth Society. We derive no comfort because important people, vocal people, or great numbers of people agree with us. Nor do we derive comfort if they don't."

"In my early days as a manager I, too, dated a few toads. They were cheap dates - I've never been much of a sport - but my results matched those of acquirers who courted higher-price toads. I kissed and they croaked."

"In our reported earnings we reflect only the dividends our portfolio companies pay us. Our share of the undistributed earnings of these investees, however, was more than $2 billion last year. These retained earnings are important. In our experience - and, for that matter, in the experience of investors over the past century -undistributed earnings have been either matched or exceeded by market gains, albeit in a highly irregular manner. (Indeed, sometimes the correlation goes in reverse. As one investor said in 2009: "This is worse than divorce. I've lost half my net worth - and I still have my wife.") In the future, we expect our market gains to eventually at least equal the earnings our investees retain."

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

"In the 20th century, the United States endured two world wars, and other traumatic and expensive military conflicts, the depression, a dozen or so recessions, and financial panics, oil shocks, a flu epidemic, and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497."

"In that, we agreed with Andrew Carnegie, who said that huge fortunes that flow in large part from society should in large part be returned to society. In my case, the ability to allocate capital would have had little utility unless I lived in a rich, populous country in which enormous quantities of marketable securities were traded and were sometimes ridiculously mispriced. And fortunately for me, that describes the U.S. in the second half of the last century."

"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.")."

"In the business world, the rear view mirror is always clearer than the windshield."

"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."

"Investing is simple, but not easy."

"Investors have to remember: corporate profits are going up, but stocks are going up faster. How can that continue indefinitely? Investors can only earn, what companies themselves earn; the government or the markets themselves don’t kick anything in. How can you get anything more out of a farm, than what it grows?"

"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."

"Investors should remember that excitement and expenses are their enemies. And if they insist on trying to time their participation in equities, they should try to be fearful when others are greedy and greedy when others are fearful."

"Is management rational?"

"It hurts companies, because managers need to know, how to value a business, to think sensibly about acquisitions. Since they don’t, they rely on Wall Street, which of course recommends doing deals, because they get paid X, if the deal doesn’t go through, and 20X if the deal does."

"Investors should be skeptical of history-based models. Constructed by a nerdy-sounding priesthood using esoteric terms such as beta, gamma, sigma and the like, these models tend to look impressive. Too often, though, investors forget to examine the assumptions behind the models. Beware of geeks bearing formulas."

"Is management candid with the shareholders?"

"It is not necessary to do extraordinary things to get extraordinary results."

"It is more important to say "no" to an opportunity, than to say "yes"."

"It is optimism that is the enemy of the rational buyer."

"It is sheer folly, to forego buying shares in an outstanding business, whose long-term future is predictable, because of short-term worries about an economy, or a stock market that we know to be unpredictable. Why scrap an informed decision, because of an uninformed guess?"

"It is possible, we could earn greater after tax returns, by moving rather frequently."

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

"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 better to hang out with people better than you. Pick out associates whose behavior is better than yours and you’ll drift in that direction."

"It’s class warfare; my class is winning, but they shouldn’t be."

"It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price."

"It’s us fun being a gorse when the tractor comes along, or the blacksmith when the car comes along."

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

"It’s got to be the best intellectual exercise out there. You’re seeing through new situations every ten minutes…In the stock market you don’t base your decisions on what the market is doing, but on what you think is rational….Bridge is about weighing gain/loss ratios. You’re doing calculations all the time."

"It's better to hang out with people better than you, ... Pick out associates whose behavior is better than yours and you'll drift in that direction."

"It's class warfare, my class is winning, but they shouldn't be."

"It’s usually poison for a corporate giant’s shareholders, if it embarks upon new ventures, pursuant to some grand vision."

"It's got to be the best intellectual exercise out there. You're seeing through new situations every ten minutes…In the stock market you don't base your decisions on what the market is doing, but on what you think is rational….Bridge is about weighing gain/loss ratios. You're doing calculations all the time."

"It's never paid to bet against America. We come through things, but it’s not always a smooth ride."

"It's nice to have a lot of money, but you know, you don't want to keep it around forever. I prefer buying things. Otherwise, it's a little like saving sex for your old age."

"It's like a tapeworm eating at our economic body."

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

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

"It’s not debt per say that overwhelms an individual corporation or country. Rather it is a continuous increase in debt in relation to income that causes trouble."