Great Throughts Treasury

"Let blockheads read what blockheads wrote."

"I've reluctantly discarded the notion of my continuing to manage the portfolio after my death — abandoning my hope to give new meaning to the term "thinking outside the box"."

"I've never seen a system as good as Coke has now."

"I've seen more people fail because of liquor and leverage - leverage being borrowed money. You really don't need leverage in this world much. If you're smart, you're going to make a lot of money without borrowing."

"Let us do or die."

"Lethargy, bordering on sloth should remain the cornerstone of an investment style."

"Like an oversexed guy in a whorehouse. Now is the time to invest and get rich."

"Liquid resources and strong financial backing are scarce and valuable assets in today's telecommunications world. Level 3 has both."

"Life is like a snowball, all you need is wet snow, and a really long hill."

"Long ago, Ben Graham taught me that "Price is what you pay; value is what you get." Whether we're talking about socks or stocks, I like buying quality merchandise when it is marked down."

"Long ago, Sir Isaac Newton gave us three laws of motion, which were the work of genius. But Sir Isaac’s talents didn’t extend to investing: He lost a bundle in the South Sea Bubble, explaining later, ‘I can calculate the movement of the stars, but not the madness of men.’ If he had not been traumatized by this loss, Sir Isaac might well have gone on to discover the Fourth Law of Motion: For investors as a whole, returns decrease as motion increases."

"Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it."

"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'."

"Look for companies with high profit margins."

"Making money isn’t the backbone of our guiding purpose; making money is the by-product of our guiding purpose. "If you’re doing something you love, you’re more likely to put your all into it, and that generally equates to making money."

"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."

"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."

"Money will always flow toward opportunity, and there is an abundance of that in America. Commentators today often talk of "great uncertainty." But think back, for example, to December 6, 1941, October 18, 1987 and September 10, 2001. No matter how serene today may be, tomorrow is always uncertain. Don't let that reality spook you. Throughout my lifetime, politicians and pundits have constantly moaned about terrifying problems facing America. Yet our citizens now live an astonishing six times better than when I was born. The prophets of doom have overlooked the all-important factor that is certain: Human potential is far from exhausted, and the American system for unleashing that potential - a system that has worked wonders for over two centuries despite frequent interruptions for recessions and even a Civil War - remains alive and effective."

"Mr. Buffett was not briefed on how the transactions were to be structured or on any improper use or purpose of the transactions."

"Much success can be attributed to inactivity. Most investors cannot resist the temptation to constantly buy and sell."

"Never ask a barber if you need a haircut."

"Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can’t buy what is popular and do well."

"Never be afraid to ask for too much when selling or offer too little when buying."

"Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good results."

"Never depend on single income. Make investment to create a second source."

"Never invest in a business you can’t understand."

"Never test the depth of river with both the feet."

"No formula in finance tells you, that the moat is 28 feet wide, and 16 feet deep. That’s what drives the academics crazy. They can compute standard deviations and betas, but they can’t understand moats."

"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."

"Occasionally, a man must rise above principles."

"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."

"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."

"No matter how great the talent or efforts, some things just take time. You can't produce a baby in one month by getting nine women pregnant."

"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."

"One’s objective should be to get it right, get it quick, get it out, and get it over... your problem won’t improve with age."

"Of the billionaires I have known, money just brings out the basic traits in them. If they were jerks before they had money, they are simply jerks with a billion dollars."

"One of RJR's largest shareholders, he knew tobacco and liked it. "I'll tell you why I like the cigarette business," he said. "It costs a penny to make. Sell it for a dollar. It's addictive. And there's fantastic brand loyalty.""

"Only those who will be sellers of equities in the near future should be happy at seeing stocks rise. Prospective purchasers should much prefer sinking prices."

"Only when the tide goes out do you discover who’s been swimming naked."

"Only when you combine sound intellect with emotional discipline do you get rational behavior."

"Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years."

"Our approach is very much profiting from lack of change rather than from change. With Wrigley chewing gum, it's the lack of change that appeals to me. I don't think it is going to be hurt by the Internet. That's the kind of business I like."

"Our future rates of gain will fall far short of those achieved in the past. Berkshire's capital base is now simply too large to allow us to earn truly outsized returns. If you believe otherwise, you should consider a career in sales but avoid one in mathematics (bearing in mind that there are really only three kinds of people in the world: those who can count and those who can't)."

"Our favorite holding period is forever."

"Our ignorance means we must follow the course prescribed by Pascal in his famous wager about the existence of God. Since he didn't know the answer, his personal gain/loss ratio dictated an affirmative conclusion."

"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."

"Our second advantage relates to the allocation of the money our businesses earn. After meeting the needs of those businesses, we have very substantial sums left over. Most companies limit themselves to reinvesting funds within the industry in which they have been operating. That often restricts them, however, to a "universe" for capital allocation that is both tiny and quite inferior to what is available in the wider world. Competition for the few opportunities that are available tends to become fierce. The seller has the upper hand, as a girl might if she were the only female at a party attended by many boys. That lopsided situation would be great for the girl, but terrible for the boys."

"Over the long term, the stock market news will be good. 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."

"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."

"Over the years, Charlie [Munger, Berkshire Hathaway Vice Chairman] and I have observed many accounting-based frauds of staggering size. Few of the perpetrators have been punished; many have not even been censured. It has been far safer to steal large sums with pen than small sums with a gun."