INVESTMENT TIPS – WARREN BUFFET

Warren Buffett turned 84 years old on Saturday. And even at that age, the billionaire continues to be involved in some of the biggest investment plays in the world. Buffett is undoubtedly the most successful investor in history. His investment philosophy is no secret, and he has repeatedly shared bits and pieces of it through a lifetime of quips and memorable quotes. His brilliance is timeless, and we find ourselves referring back to them over and over again.

 

Below are a few compilations of Buffett's best quotes:

 

1.      Buying a stock is about more than just the price.

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

Source: Letter to shareholders, 1989

 

2.      You don't have to be a genius to invest well.

"You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beats the guy with 130 IQ."

Source: Warren Buffett Speaks, via msnbc.msn

 

3.      But, master the basics.

"To invest successfully, you need not understand beta, efficient markets, modern portfolio theory, option pricing or emerging markets. You may, in fact, be better off knowing nothing of these. That, of course, is not the prevailing view at most business schools, whose finance curriculum tends to be dominated by such subjects. In our view, though, investment students need only two well-taught courses - How to Value a Business, and How to Think About Market Prices."

Source: Chairman's Letter, 1996

 

4.      Don't buy a stock just because everyone hates it.

"None of this means, however, that a business or stock is an intelligent purchase simply because it is unpopular; a contrarian approach is just as foolish as a follow-the-crowd strategy. What's required is thinking rather than polling. Unfortunately, Bertrand Russell's observation about life in general applies with unusual force in the financial world: "Most men would rather die than think. Many do."

Source: Chairman's Letter, 1990

 

5.      Bad things aren't obvious when times are good.

"After all, you only find out who is swimming naked when the tide goes out."

Source: Letter to shareholders, 2001

 

6.      Always be liquid.

"I have pledged – to you, the rating agencies and myself – to always run Berkshire with more than ample cash. We never want to count on the kindness of strangers in order to meet tomorrow’s obligations. When forced to choose, I will not trade even a night’s sleep for the chance of extra profits."

 Source: Letter to shareholders, 2008

 

7.      The best time to buy a company is when it's in trouble.

"The best thing that happens to us is when a great company gets into temporary trouble...We want to buy them when they're on the operating table."

Source: Businessweek, 1999

 

8.      Stocks have always come out of crises.
"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."

Source: The New York Times, October 16, 2008

 

9.      Don't be fooled by that Cinderella feeling you get from great returns.

"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 ¾ that is, continuing to speculate in companies that have gigantic valuations relative to the cash they are likely to generate in the future ¾ 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."

Source: Letter to shareholders, 2000

 

10.  Think long-term.

"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. Over time, you will find only a few companies that meet these standards - so when you see one that qualifies, you should buy a meaningful amount of stock. You must also resist the temptation to stray from your guidelines: If you aren't willing to own a stock for ten years, don't even think about owning it for ten minutes. Put together a portfolio of companies whose aggregate earnings march upward over the years, and so also will the portfolio's market value."

Source: Chairman's Letter, 1996

 

TO BE CONTINUED…


INVESTMENT TIPS – WARREN BUFFET

Warren Buffett turned 84 years old on Saturday. And even at that age, the billionaire continues to be involved in some of the biggest investment plays in the world. Buffett is undoubtedly the most successful investor in history. His investment philosophy is no secret, and he has repeatedly shared bits and pieces of it through a lifetime of quips and memorable quotes. His brilliance is timeless, and we find ourselves referring back to them over and over again.

 

Below are a few compilations of Buffett's best quotes:

 

1.      Buying a stock is about more than just the price.

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

Source: Letter to shareholders, 1989

 

2.      You don't have to be a genius to invest well.

"You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beats the guy with 130 IQ."

Source: Warren Buffett Speaks, via msnbc.msn

 

3.      But, master the basics.

"To invest successfully, you need not understand beta, efficient markets, modern portfolio theory, option pricing or emerging markets. You may, in fact, be better off knowing nothing of these. That, of course, is not the prevailing view at most business schools, whose finance curriculum tends to be dominated by such subjects. In our view, though, investment students need only two well-taught courses - How to Value a Business, and How to Think About Market Prices."

Source: Chairman's Letter, 1996

 

4.      Don't buy a stock just because everyone hates it.

"None of this means, however, that a business or stock is an intelligent purchase simply because it is unpopular; a contrarian approach is just as foolish as a follow-the-crowd strategy. What's required is thinking rather than polling. Unfortunately, Bertrand Russell's observation about life in general applies with unusual force in the financial world: "Most men would rather die than think. Many do."

Source: Chairman's Letter, 1990

 

5.      Bad things aren't obvious when times are good.

"After all, you only find out who is swimming naked when the tide goes out."

Source: Letter to shareholders, 2001

 

6.      Always be liquid.

"I have pledged – to you, the rating agencies and myself – to always run Berkshire with more than ample cash. We never want to count on the kindness of strangers in order to meet tomorrow’s obligations. When forced to choose, I will not trade even a night’s sleep for the chance of extra profits."

 Source: Letter to shareholders, 2008

 

7.      The best time to buy a company is when it's in trouble.

"The best thing that happens to us is when a great company gets into temporary trouble...We want to buy them when they're on the operating table."

Source: Businessweek, 1999

 

8.      Stocks have always come out of crises.
"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."

Source: The New York Times, October 16, 2008

 

9.      Don't be fooled by that Cinderella feeling you get from great returns.

"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 ¾ that is, continuing to speculate in companies that have gigantic valuations relative to the cash they are likely to generate in the future ¾ 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."

Source: Letter to shareholders, 2000

 

10.  Think long-term.

"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. Over time, you will find only a few companies that meet these standards - so when you see one that qualifies, you should buy a meaningful amount of stock. You must also resist the temptation to stray from your guidelines: If you aren't willing to own a stock for ten years, don't even think about owning it for ten minutes. Put together a portfolio of companies whose aggregate earnings march upward over the years, and so also will the portfolio's market value."

Source: Chairman's Letter, 1996

 

TO BE CONTINUED…


INVESTMENT TIPS – WARREN BUFFET

Warren Buffett turned 84 years old on Saturday. And even at that age, the billionaire continues to be involved in some of the biggest investment plays in the world. Buffett is undoubtedly the most successful investor in history. His investment philosophy is no secret, and he has repeatedly shared bits and pieces of it through a lifetime of quips and memorable quotes. His brilliance is timeless, and we find ourselves referring back to them over and over again.

 

Below are a few compilations of Buffett's best quotes:

 

1.      Buying a stock is about more than just the price.

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

Source: Letter to shareholders, 1989

 

2.      You don't have to be a genius to invest well.

"You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beats the guy with 130 IQ."

Source: Warren Buffett Speaks, via msnbc.msn

 

3.      But, master the basics.

"To invest successfully, you need not understand beta, efficient markets, modern portfolio theory, option pricing or emerging markets. You may, in fact, be better off knowing nothing of these. That, of course, is not the prevailing view at most business schools, whose finance curriculum tends to be dominated by such subjects. In our view, though, investment students need only two well-taught courses - How to Value a Business, and How to Think About Market Prices."

Source: Chairman's Letter, 1996

 

4.      Don't buy a stock just because everyone hates it.

"None of this means, however, that a business or stock is an intelligent purchase simply because it is unpopular; a contrarian approach is just as foolish as a follow-the-crowd strategy. What's required is thinking rather than polling. Unfortunately, Bertrand Russell's observation about life in general applies with unusual force in the financial world: "Most men would rather die than think. Many do."

Source: Chairman's Letter, 1990

 

5.      Bad things aren't obvious when times are good.

"After all, you only find out who is swimming naked when the tide goes out."

Source: Letter to shareholders, 2001

 

6.      Always be liquid.

"I have pledged – to you, the rating agencies and myself – to always run Berkshire with more than ample cash. We never want to count on the kindness of strangers in order to meet tomorrow’s obligations. When forced to choose, I will not trade even a night’s sleep for the chance of extra profits."

 Source: Letter to shareholders, 2008

 

7.      The best time to buy a company is when it's in trouble.

"The best thing that happens to us is when a great company gets into temporary trouble...We want to buy them when they're on the operating table."

Source: Businessweek, 1999

 

8.      Stocks have always come out of crises.
"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."

Source: The New York Times, October 16, 2008

 

9.      Don't be fooled by that Cinderella feeling you get from great returns.

"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 ¾ that is, continuing to speculate in companies that have gigantic valuations relative to the cash they are likely to generate in the future ¾ 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."

Source: Letter to shareholders, 2000

 

10.  Think long-term.

"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. Over time, you will find only a few companies that meet these standards - so when you see one that qualifies, you should buy a meaningful amount of stock. You must also resist the temptation to stray from your guidelines: If you aren't willing to own a stock for ten years, don't even think about owning it for ten minutes. Put together a portfolio of companies whose aggregate earnings march upward over the years, and so also will the portfolio's market value."

Source: Chairman's Letter, 1996

 

TO BE CONTINUED…


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