Value Investing

25 Pages of the Best Value Investing Quotes (PAGE WILL LOAD SLOWLY)

”  Berkshire Hathaway 2005 Chairman’s Letter

Math:

“There are three kinds of people in the world: those who can count, and those who can’t”

Mistakes:

“Most business mistakes are irreversible setbacks, but you get another chance. There are two things in life that you don’t get another chance at – marrying the wrong person and what you do with your children.” http://cotellese.wordpress.com/feed/

You only have to do a very few things right in your life so long as you don’t do too many things wrong.

Rule No.1: Never lose money. Rule No.2: Never forget rule No.1.

Patience:

“Time is the enemy of the poor business and the friend of the great business. If you have a business that’s earning 20%-25% on equity, time is your friend. But time is your enemy if your money is in a low return business.” – Warren Buffett, 1998BerkshireAnnual Meeting

“The Stock Market is designed to transfer money from the Active to the Patient.”

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

People:

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.

I am quite serious when I say that I do not believe there are, on the whole earth besides, so many intensified bores as in theseUnited States. No man can form an adequate idea of the real meaning of the word, without coming here.

Somebody once said that 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. You think about it; it’s true. If you hire somebody without the first, you really want them to be dumb and lazy.
“Working with people who cause your stomach to churn seems much like marrying for money – probably a bad idea under any circumstances, but absolute madness if you are already rich.”

Predictions

“You only find out who is swimming naked when the tide goes out.” Berkshire Hathaway 2001 Chairman’s Letter

“I violated the Noah rule: Predicting rain doesn’t count; building arks does.”

“We’ve long felt that the only value of stock forecasters is to make fortune tellers look good. Even now, Charlie and I continue to believe that short-term market forecasts are poison and should be kept locked up in a safe place, away from children and also from grown-ups who behave in the market like children.”

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

“In the business world, the rearview mirror is always clearer than the windshield.

“The fact that people will be full of greed, fear or folly is predictable. The sequence is not predictable.” – Financial Review, 1985

“The future is never clear, and you pay a very high price in the stock market for a cheery consensus.

Price

“Price is what you pay. Value is what you get.”

“For some reason, people take their cues from price action rather than from values. What doesn’t work is when you start doing things that you don’t understand or because they worked last week for somebody else. The dumbest reason in the world to buy a stock is because it’s going up. “

“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.” –BerkshireHathaway 1998 Annual Meeting

Problems:

“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.”

Quality:

“We have tried occasionally to buy toads at bargain prices with results that have been chronicled in past reports. Clearly our kisses fell flat. We have done well with a couple of princes – but they were princes when purchased. At least our kisses didn’t turn them into toads. And, finally, we have occasionally been quite successful in purchasing fractional interests in easily-identifiable princes at toad-like prices.”- 1981 Chairman’s Letter

Reputation

“It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”

Risk:

“I like to go for cinches. I like to shoot fish in a barrel. But I like to do it after the water has run out.”- Oct. 2003, Wharton talk with MBA students

“Risk is a part of God’s game, alike for men and nations.”

“I don’t look to jump over 7-foot bars: I look around for 1-foot bars that I can step over.”

“We’re perfectly willing to trade away a big payoff for a certain payoff.” – 1999BerkshireHathaway

“Risk comes from not knowing what you’re doing.”

“Uncertainty is the friend of the buyer of long-term values.”

Size vs. Performance

“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.” “Homespun Wisdom from the ‘Oracle ofOmaha’”, BusinessWeek, 5 July 1999.

“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). ” – 1998 Chairman’s Letter to Shareholders

Speculation

“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.”- 1997BerkshireHathaway

“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.”  Berkshire Hathaway 2000 Chairman’s Letter

We believe that according the name ‘investors’ to institutions that trade actively is like calling someone who repeatedly engages in one-night stands a ‘romantic.’

Taxes

“It’s class warfare, my class is winning, but they shouldn’t be.” – CNN Interview, May 25 2005
“There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.” – New York Times, November 26, 2006.

“If you’re in the luckiest 1 per cent of humanity, you owe it to the rest of humanity to think about the other 99 per cent.” “Times Online, June 28, 2007.
 Turn arounds:

“Turn-arounds” seldom turn”.

Valuation:

“The investor of today does not profit from yesterday’s growth.”  1961 partnership letter

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

“The speed at which a business success is recognized, furthermore, is not that important as long as the company’s intrinsic value is increasing at a satisfactory rate. In fact, delayed recognition can be an advantage: It may give us the chance to buy more of a good thing at a bargain price.”

 

“Becoming a Portfolio Manager Who Hits .400”[85]

  • Think of stocks as [fractional shares of] businesses
  • Increase the size of your investment
  • Reduce portfolio turnover
  • Develop alternative performance benchmarks
  • Learn to think in probabilities
  • Recognize the psychology of misjudgment
  • Ignore market forecasts
  • Wait for the fat pitch

 

 

 

 

“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