Value Investing

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

bureaucratic. It was slow to think. And there was an established way of thinking. If you poked your head up with a new thought, the system kind of turned against you. It was everything in the way of a dysfunctional big bureaucracy that you would expect.” http://ycombinator.com/munger.html

Businesses

“We’ve really made the money out of high quality businesses. In some cases, we bought the whole business. And in some cases, we just bought a big block of stock. But when you analyze what happened, the big money’s been made in the high quality businesses. And most of the other people who’ve made a lot of money have done so in high quality businesses.  http://ycombinator.com/munger.html

Business Schools:

“I was recently speaking with Jack McDonald, who teaches a course on investing rooted in our principles at Stanford Business

School. He said it’s lonely — like he’s the Maytag repairman. http://www.fool.com/boringport/2000/boringport00051500.htm

Buying back shares:

“A lot of share-buying, not bargain-seeking, is designed to prop stock prices up. Thirty to 40 years ago, it was very profitable to look at companies that were aggressively buying their own shares. They were motivated simply to buy below what it was worth.” http://www.fool.com/news/commentary/2006/commentary06053004.htm

Capital Allocation:

There are two kinds of businesses: The first earns 12%, and you can take it out at the end of the year. The second earns 12%, but all the excess cash must be reinvested — there’s never any cash. It reminds me of the guy who looks at all of his equipment and says, “There’s all of my profit.” We hate that kind of business. http://www.tilsonfunds.com/motley_berkshire_brkmtg03notes.php3
 

Capitalism

 

“When it gets into these spikes, with shortages and uproar and so forth, people go bananas, but that’s capitalism.” http://www.kiplinger.com/personalfinance/features/archives/2005/11/munger3.html

 

“I regard it as very unfair, but capitalism without failure is like religion without hell.”  http://www.tilsonfunds.com/motley_berkshire_brkmtg02notes.php3

 

“capitalism is a pretty brutal place.”  http://ycombinator.com/munger.html

Cash:

 

“Our cash is speaking for itself.  If we had a lot of wonderful ideas, we wouldn’t have so much cash.”  http://www.tilsonfunds.com/wscmtg04notes.doc

 

“There are worse situations than drowning in cash and sitting, sitting, sitting. I remember when I wasn’t awash in cash —and I don ’t want to go back.” http://www.poorcharliesalmanack.com/pdf/page61.pdf

 Change

“Those who will not face improvements because they are changes, will face changes that are not improvements”  http://www.feedblitz.com/f/f.fbz?PreviewFeed=7799

Character

“It’s hard to judge the combination of character and intelligence and other things. It’s not at all simple, which explains why we have so many divorces. (Laughter) Think about how much people know about the person they marry, yet so many break up. It’s not easy, it is in some cases. If people are splashing around with money like Dennis Kozlowski, with vodka at parties coming out of some body part, and if it looks like Sodomand Gomorrah, then maybe this isn’t what you’re looking for. (Laughter) But beyond that, it’s hard. If you have some unfortunate experiences while getting that knowledge, well, welcome to the human race. (Laughter)  http://www.tilsonfunds.com/wscmtg05notes.pdf

Charlie Munger:

“I call myself the assistant cult leader,” http://www.law.harvard.edu/alumni/bulletin/2001/summer/feature_1-1.html

China:

“At Berkshire Hathaway we do not like to compete against Chinese manufacturers.” http://www.tilsonfunds.com/wscmtg05notes.pdf

Cialdini 

“Cialdini does a magnificent job at this, and you’re all going to be given a copy of Cialdini’s book. And if you have half as much sense as I think you do, you will immediately order copies for all of your children and several of your friends. You will never make a better investment.”  http://www.loschmanagement.com/Berkshire%20Hathaway/Charlie%20munger/The%20Psychology%20of%20Human%20Misjudgement.htm  

Cicero:  

“As I continued throughCicero’s pages, I found much more material celebrating my way of life … “

“Cicero’s words also increased my personal satisfaction by supporting my long-standing rejection of a conventional point of view.”  http://www.fool.com/News/mft/2006/mft06072637.htm

Circle of  Competence: 

“There are a lot of things we pass on. We have three baskets: in, out, and too tough…We have to have a special insight, or we’ll put it in the ‘too tough’ basket. All of you have to look for a special area of competency and focus on that.”  http://www.fool.com/news/foth/2002/foth020515.htm “If you have competence, you pretty much know its boundaries already. To ask the question [of whether you are past the boundary ] is to answer it.”  http://www.poorcharliesalmanack.com/pdf/page53.pdf

“We know the edge of our competency better than most.” That’s a very worthwhile thing.” http://www.designs.valueinvestorinsight.com/bonus/bonuscontent/docs/Tilson_2006_BRK_Meeting_Notes.pdf#search=%22Charlie%20munger%20and%20foundation%20and%20croupier%22

“Warren and I avoid doing anything that someone else at Berkshirecan do better. You don’t really have a competency if you don’t know the edge of it.” http://money.cnn.com/magazines/fortune/fortune_archive/2006/05/29/8378052/index.htm
Warren and I don’t feel like we have any great advantage in the high-tech sector. In fact, we feel like we’re at a big disadvantage in trying to understand the nature of technical developments in software, computer chips or what have you. So we tend to avoid that stuff, based on our personal inadequacies. Again, that is a very, very powerful idea. Every person is going to have a circle of competence. And it’s going to be very hard to advance that circle. If I had to make my living as a musician…. I can’t even think of a level low enough to describe where I would be sorted out to if music were the measuring standard of the civilization.  So you have to figure out what your own aptitudes are. If you play games where other people have the aptitudes and you don’t, you’re going to lose. And that’s as close to certain as any prediction that you can make. You have to figure out where you’ve got an edge. And you’ve got to play within your own circle of competence.  If you want to be the best tennis player in the world, you may start out trying and soon find out that it’s hopeless—that other people blow right by you. However, if you want to become the best plumbing contractor in

Bemidji, that is probably doable by two-thirds of you. It takes a will. It takes the intelligence. But after a while, you’d gradually know all about the plumbing

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