Warren Edward Buffett / b. 1930 / Nebraska, USA / Businessman, Investor, CEO of Berkshire Hathaway, Inc.
Berkshire Hathaway
Note: Responding to a question why Buffett does not deal in tech stocks:
We’re more comfortable in that kind of business. It means we miss a lot of very big winners. But we wouldn’t know how to pick them out anyway. It also means we have very few big losers—and that’s quite helpful over time. We’re perfectly willing to trade away a big payoff for a certain payoff.
Buffett statement, 1999; reported in “Why Won’t Buffett Invest in Tech Stocks?,” The Motley Fool, March 6, 2000.
Buffett on Buffett
I wouldn’t mind going to jail if I had three cellmates who played bridge.
Reported by Robert G. Hagstrom in The Warren Buffett Portfolio: Mastering the Power of the Focus Investment Strategy (1999).
I happen to have a talent for allocating capital. But my ability to use that talent is completely dependent on the society I was born into. If I’d been born into a tribe of hunters, this talent of mine would be pretty worthless. I can’t run very fast. I’m not particularly strong. I’d probably end up as some wild animal’s dinner.
Reported by Barack Obama in The Audacity of Hope: Thoughts on Reclaiming the American Dream (2006).
Business Philosophy
Someone’s sitting in the shade today because someone planted a tree a long time ago.
Buffett statement, 1991; reported by Andrew Kilpatrick in Of Permanent Value: The Story of Warren Buffett (1996).
I like thinking big. I always have. To me it’s very simple: if you’re going to be thinking anyway, you might as well think big.
Reported by Roger Lowenstein in Buffett: The Making of an American Capitalist (1995).
There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.
Reported by Ben Stein in “In Class Warfare, Guess Which Class Is Winning,” nytimes.com, November 26, 2006.
It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.
Reported by Dan Robert Anderson in Corporate Survival: The Critical Importance of Sustainability Risk Management (2005).
The free market’s the best mechanism ever devised to put resources to their most efficient and productive use. . . . The government isn’t particularly good at that. But the market isn’t so good at making sure that the wealth that’s produced is being distributed fairly or wisely.
Reported by Barack Obama in The Audacity of Hope: Thoughts on Reclaiming the American Dream (2006).
People will always try to stop you doing the right thing if it is unconventional.
Reported by Guy Spier in “My $650,100 Lunch with Warren Buffett,” time.com, June 30, 2008.
Rule No. 1: Never lose money. Rule No. 2: Never forget rule No. 1.
Reported by Stephanie Loiacono in “Rules That Warren Buffett Lives By,” Yahoo Finance, yahoo.com, February 23, 2010.
You don’t find out who’s been swimming naked until the tide goes out.
Buffett statement, 1994 annual meeting; reported by CNBC, April 25, 1994.
Investing
I call investing the greatest business in the world . . . because you never have to swing. You stand at the plate, the pitcher throws you General Motors at 47! U.S. Steel at 39! and nobody calls a strike on you. There’s no penalty except opportunity lost. All day you wait for the pitch you like; then when the fielders are asleep, you step up and hit it.
Reported in “The Money Men,” Forbes magazine, November 1, 1974.
You’re dealing with a lot of silly people in the marketplace; it’s like a great big casino and everyone else is boozing. If you can stick with Pepsi, you should be O.K.
Reported in “The Money Men,” Forbes magazine, November 1, 1974.
If you understood a business perfectly and the future of the business, you would need very little in the way of a margin of safety. So, the more vulnerable the business is, assuming you still want to invest in it, the larger margin of safety you’d need. If you’re driving a truck across a bridge that says it holds 10,000 pounds and you’ve got a 9,800 pound vehicle, if the bridge is 6 inches above the crevice it covers, you may feel okay, but if it’s over the Grand Canyon, you may feel you want a little larger margin of safety. . . .
Buffett statement, 1997; reported by Andrew Kilpatrick in Of Permanent Value: The Story of Warren Buffett, revised edition (2000).
Success in investing doesn’t correlate with I.Q. once you’re above the level of 125. Once you have ordinary intelligence, what you need is the temperament to control the urges that get other people into trouble in investing.
Reported by Amy Stone in “Homespun Wisdom from the ‘Oracle of Omaha,'” Businessweek, June 5, 1999.
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.
Reported by Amy Stone in “Homespun Wisdom from the ‘Oracle of Omaha,'” Businessweek, June 5, 1999.
We don’t get paid for activity, just for being right. As to how long we’ll wait, we’ll wait indefinitely.
Buffett statement, 1998; reported by Frank Partnoy, Wait: The Art and Science of Delay (2012).
You want to be greedy when others are fearful. You want to be fearful when others are greedy. It’s that simple. . . . They’re pretty fearful. In fact, in my adult lifetime, I don’t think I’ve ever seen people as fearful economically as they are right now.
Interview with Charlie Rose, PBS, October 1, 2008.
I try to buy stock in businesses that are so wonderful that an idiot can run them. Because sooner or later, one will.
Buffett statement, panel discussion, DVD extra, Patrick Creadon, I.O.U.S.A. (2008).
Money
I don’t have a problem with guilt about money. The way I see it is that my money represents an enormous number of claim checks on society. It is like I have these little pieces of paper that I can turn into consumption. If I wanted to, I could hire 10,000 people to do nothing but paint my picture every day for the rest of my life. And the GNP would go up. But the utility of the product would be zilch, and I would be keeping those 10,000 people from doing AIDS research, or teaching, or nursing. I don’t do that though. I don’t use very many of those claim checks. There’s nothing material I want very much. And I’m going to give virtually all of those claim checks to charity when my wife and I die.
Reported by Janet C. Lowe in Warren Buffett Speaks: Wit and Wisdom from the World’s Greatest Investor (1997).
Parenting
Love is the greatest advantage a parent can give.
Reported by Richard I. Kirkland, Jr., in “Should You Leave It All to the Children?,” Fortune magazine, cnn.com, September 29, 1986.
Value
Draw a circle around the businesses you understand and then eliminate those that fail to qualify on the basis of value, good management and limited exposure to hard times. . . . Buy into a company because you want to own it, not because you want the stock to go up. . . . People have been successful investors because they’ve stuck with successful companies. Sooner or later, the market mirrors the business.
Reported in “The Money Men,” Forbes magazine, November 1, 1974.
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.
Warren Buffett, The Essays of Warren Buffett: Lessons for Corporate America, edited by Lawrence A. Cunningham (1998).
Wall Street
Wall Street is the only place that people ride to work in a Rolls Royce to get advice from those who take the subway.
Reported by Egbert Sukop in The Money Adventure (1998).