Value Investing

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

com/2005/05/01/news/fortune500/buffett_talks/index.htm

“Let me know what your problem is, and I will try to make it more difficult for you.”  http://blogs.barrons.com/techtraderdaily/2006/06/26/the-wit-and-wisdom-of-charlie-munger/
 

Prospect Theory:

“I mean people are really crazy about minor decrements down. And then, if you act on them, then you get into reciprocation tendency, because you don’t just reciprocate affection, you reciprocate animosity, and the whole thing can escalate. And so huge insanities can come from just subconsciously over-weighing the importance of what you’re losing or almost getting and not getting.” http://www.loschmanagement.com/Berkshire%20Hathaway/Charlie%20munger/The%20Psychology%20of%20Human%20Misjudgement.htm

Prospectus

“Any time anybody offers you anything with a big commission and a 200-page prospectus, don’t buy it. Occasionally, you’ll be wrong if you adopt “Munger’s Rule”. However, over a lifetime, you’ll be a long way ahead—and you will miss a lot of unhappy experiences .”http://ycombinator.com/munger.html

 

Psychology:

 

“The elementary part of psychology ? the psychology of misjudgment, as I call it ? is a terribly important thing to learn. There are about 20 little principles. And they interact, so it gets slightly complicated. But the guts of it is unbelievably important. Terribly smart people make totally bonkers mistakes by failing to pay heed to it. In fact, I’ve done it several times during the last two or three years in a very important way. You never get totally over making silly mistakes. There’s another saying that comes from Pascal which I’ve always considered o­ne of the really accurate observations in the history of thought. Pascal said in essence, “The mind of man at o­ne and the same time is both the glory and the shame of the universe.”  http://www.thinkfn.com/en/content/view/52/?id=124

 

Public Company:

“…the cost of being a publicly traded stock has gone way, way up. It doesn’t make sense for a little company to be public anymore. A lot of little companies are going private to be rid of these burdensome requirements….”  http://www.tilsonfunds.com/wscmtg05notes.pdf

Purpose:

“That I’ve profited from being shrewd with money is not by itself satisfying to me. To atone, I teach and try to set an example. I would hate it if the example of my life caused people to pursue the passive ownership of pieces of paper. I think lives so spent are disastrous lives. I think it’s a better career if you help build something. I wish I’d built more, but I was cursed at being so good at stock picking. ‘The man is the prisoner of his talents.’ You can laugh, but I’ll bet this room is full of people who are prisoners of their talents. It tends to be the human condition.”  http://www.tilsonfunds.com/motley_berkshire_wscmtg01notes.php3

 

Rationality

“Rationality is not just something you do so that you can make more money, it is a binding principle. Rationality is a really good idea. You must avoid the nonsense that is conventional in one’s own time. It requires developing systems of thought that improve your batting average over time.”  http://news.morningstar.com/article/article.asp?id=169398

“We have a high moral responsibility to be rational.”   http://money.cnn.com/magazines/fortune/fortune_archive/2006/05/29/8378052/index.htm

“The manipulation still works even though you know you’re doing it. And I’ve seen that done by one person to another. I drew this beautiful woman as my dinner partner a few years ago, and I’d never seen her before. Well, she’s married to prominent Angelino, and she sat down next to me and she turned her beautiful face up and she said, “Charlie,” she said, “What one word accounts for your remarkable success in life?” And I knew I was being manipulated and that she’d done this before, and I just loved it. I mean I never see this woman without a little lift in my spirits. And by the way I told her I was rational.”  http://www.loschmanagement.com/Berkshire%20Hathaway/Charlie%20munger/The%20Psychology%20of%20Human%20Misjudgement.htm

Reading

“We read a lot.  I don’t know anyone who’s wise who doesn’t read a lot.  But that’s not enough: You have to have a temperament to grab ideas and do sensible things.  Most people don’t grab the right ideas or don’t know what to do with them.”  http://www.tilsonfunds.com/brkmtg04notes.doc

“In my whole life, I have known no wise people (over a broad subject matter area) who didn’t read all the time – none, zero. You’d be amazed at how much Warrenreads – at how much I read. My children laugh at me. They think I’m a book with a couple of legs sticking out.”  http://www.amazon.com/gp/product/1578643031/104-7644521-2497538?v=glance&n=283155

“…by regularly reading business newspaper and magazines I am exposed to an enormous amount of material at the micro level..  I find that what I see going on there pretty much informs me about what’s happening at the macro level.”   http://www.amazon.com/gp/product/1578643031/104-7644521-2497538?v=glance&n=283155  

Real Estate:  

“We don’t have big advantages — no special competence — so we spend almost no time on it.” http://www.tilsonfunds.com/motley_berkshire_brkmtg02notes.php3

“REITs are way more suitabl e for individual shareholders than for corporate shareholders. And Warrenhas enough residue from his old cigar-butt personality that when people became disenchanted with the REITs and the market price went down to maybe a 20% discount from what the companies could be liquidated for, he bought a few shares with his personal money. So it’s nice that Warrenhas a few private assets with which to pick up cigar butts in memory of old times – if that’s what keeps him amused.” – 1999 Wesco Annual Meeting  http://www.ticonline.com/archives_quotes.html

Regulation

In our early days, we tended to overestimate the difficulties of regulation.  We refrained by buying the stocks of television stations because we thought it was peculiar that someone could ask to have the government pull your license any year – and the government could do it. http://www.tilsonfunds.com/brkmtg04notes.doc

“How often does it happen that someone who was an intimate member of an industry is really the right person to clean it up?” “Will anybody be as tough as I’d like to see? The answer is no.”

Regret:

“I don’t spend much time  regretting the past, once I’ve taken my

lesson from it. I don’t dwell on it.”  Damn Right! Behind the Scenes with Berkshire Hathaway Billionaire Cha lie Munger, Janet Lowe john Wiley &Sons,  2003 http://www.wiley.com/WileyCDA/WileyTitle/productCd-0471446912,descCd-tableOfContents.html

Reinsurance: 

“Reinsurance is not as much of a commodity business as it might appear. There’s such a huge time lag between when the policy is written and when it is paid that the customer has to evaluate the insurer’s future willingness and ability to pay. We have a reputational advantage, though it’s not as big as it should be.”  http://www.fool.com/boringport/2000/boringport000501.htm

“Our record in the past if you average it out has been quite respectable. Why shouldn¹t we use our capital strength?” “We’d be out of our minds if we wrote weather insurance on the opinion global warming would have no effect at all.”  http://us.ft.com/ftgateway/superpage.