Value Investing

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

  • market, one must avoid the error of the preening duck that quacks boastfully after a torrential rainstorm, thinking that its paddling skills have caused it to rise in the world. A right-thinking duck would instead compare its position after the downpour to that of the other ducks on the pond.
    • Letter to Berkshire Hathaway shareholders, 1997
  • A girl in a convertible is worth five in the phonebook.
    • Berkshire Hathaway 2000 Chairman’s Letter.

Intelligent Decision Making

  • Charlie and I decided long ago that in an investment lifetime it’s too hard to make hundreds of smart decisions. That judgment became ever more compelling as Berkshire’s capital mushroomed and the universe of investments that could significantly affect our results shrank dramatically. Therefore, we adopted a strategy that required our being smart – and not too smart at that – only a very few times. Indeed, we’ll now settle for one good idea a year. (Charlie says it’s my turn.)[citation needed]
  • The fact that people will be full of greed, fear or folly is predictable. The sequence is not predictable.
    • Financial Review, 1985
  • I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful.
    • Lecturing to a group of students at ColumbiaU.He was 21 years old.[citation needed]
  • 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.
  • The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company and, above all, the durability of that advantage.
  • The most common cause of low prices is pessimism – some times pervasive, some times specific to a company or industry. We want to do business in such an environment, not because we like pessimism but because we like the prices it produces. It’s optimism that is the enemy of the rational buyer.
    • 1990 Chairman’s Letter to Shareholders
  • 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.
    • BusinessWeek Interview June 25 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
  • 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.
  • Ben’s Mr. Market allegory may seem out-of-date in today’s investment world, in which most professionals and academicians talk of efficient markets, dynamic hedging and betas. Their interest in such matters is understandable, since techniques shrouded in mystery clearly have value to the purveyor of investment advice. After all, what witch doctor has ever achieved fame and fortune by simply advising ‘Take two aspirins’?
    • 1987 Chairman’s Letter to Shareholders
  • We will reject interesting opportunities rather than over-leverage our balance sheet.
  • “If you expect to be a net saver during the next 5 years, should you hope for a higher or lower stock market during that period?” Many investors get this one wrong. Even though they are going to be net buyers of stocks for many years to come, they are elated when stock prices rise and depressed when they fall.” This reaction makes no sense. Only those who will be sellers of equities in the near future should be happy at seeing stocks rise. Prospective purchasers should much prefer sinking prices.
    • 1997 Chairman’s Letter to Shareholders

Career Decision

  • “It’s crazy to take little in between jobs just because they look good on your resume. That’s like saving sex for your old age. Do what you love and work for whom you admire the most, and you’ve given yourself the best chance in life you can.”
    • 2001? speech at Terry College of Business at the Universityof Georgia[citation needed]
  • “I asked him what he wanted to do for his career, and he replied that he wanted to go into a particular field, but thought he should work for McKinsey for a few years first to add to his resume. To me that’s like saving sex for your old age. It makes no sense.”[citation needed]

Inactivity as Intelligent

  • 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.[citation needed]
  • The stock market is a no-called-strike game. You don’t have to swing at everything–you can wait for your pitch. The problem when you’re a money manager is that your fans keep yelling, ‘Swing, you bum!’

On Diversification

  • The strategy we’ve adopted precludes our following standard diversification dogma. Many pundits would therefore say the strategy must be riskier than that employed by more conventional investors. We disagree. We believe that a policy of portfolio concentration may well decrease risk if it raises, as it should, both the intensity with which an investor thinks about a business and the comfort-level he must feel with its economic characteristics before buying into it.
    • 1993 Chairman’s Letter to Shareholders
  • Diversification is a protection against ignorance. It makes very little sense for those who know what they’re doing.[citation needed]
  • Paraphrasing:
    • I have 2 views on diversification. If you are a professional and have confidence, then I would advocate lots of concentration. For everyone else, if it’s not your game, participate in total diversification. The economy will do fine over time. Make sure you

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