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

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enough. But you have to understand that bell shaped curve at least roughly as well as I do.”  http://ycombinator.com/munger.html

“Practically everybody (1) overweighs the stuff that can be numbered, because it yields to the statistical techniques they’re taught in academia, and (2) doesn’t mix in the hard-to-measure stuff that may be more important. That is a mistake I’ve tried all my life to avoid, and I have no regrets for having done that.”

Stock Exchanges:


“I think we have lost our way when people like the [board of] governors and the CEO of the NYSE fail to realize they have a duty to the rest of us to act as exemplars. You do not want your first-grade school teacher to be fornicating on the floor or drinking alcohol in the closet and, similarly, you do not want your stock exchange to be setting the wrong moral example.”  http://money.cnn.com/2005/05/01/news/fortune500/buffett_talks/index.htm

Stock Markets:

“The model I like—to sort of simplify the notion of what goes on in a market for common stocks—is the pari-mutuel system at the racetrack. If you stop to think about it, a pari-mutuel system is a market. Everybody goes there and bets and the odds change based on what’s bet. That’s what happens in the stock market. “

 Stock Picking:

“It’s not given to human beings to have such talent that they can just know everything about everything all the time. But it is given to human beings who work hard at it—who look and sift the world for a mispriced be—that they can occasionally find one. And the wise ones bet heavily when the world offers them that opportunity. They bet big when they have the odds. And the rest of the time, they don’t. It’s just that simple.”  http://ycombinator.com/munger.html

“Stock-picking is like gambling: those who win well, seldom bet, but when they do, they bet heavily.”

Stock Options:

“Quoting Demosthenes, ‘For what each man wishes, that he also believes to be true.’ I would rather make money playing a piano in a whorehouse than arguing that no cost is incurred when employees are paid in stock options instead of cash. I am not kidding.”  http://www.law.stanford.edu/publications/stanford_lawyer/issues/64/sl64.pdf


“You must value the business in order to value the stock.http://www.amazon.com/gp/product/1578643031/104-7644521-2497538?v=glance&n=283155

“[In picking stocks] You really have to know a lot about business. You have to know a lot about competitive advantage. You have to know a lot about the maintainability of competitive advantage. You have to have a mind that quantifies things in terms of value. And you have to be able to compare those values with other values available in the stock market.”  http://www.kiplinger.com/personalfinance/features/archives/2005/11/munger2.html

“The number one idea, is to view a stock as an ownership of the business [and] to judge the staying quality of the business in terms of its competitive advantage. Look for more value in terms of discounted future cash flow than you’re paying for. Move only when you have an advantage. It’s very basic. You have to understand the odds and have the discipline to bet only when the odds are in your favor.”  http://www.law.harvard.edu/alumni/bulletin/2001/summer/feature_1-1.html

“It would be nice if this [finding really cheap stocks] happened all the time. Unfortunately, it doesn’t.”  http://www.tilsonfunds.com/brkmtg05notes.pdf

“To some extent, stocks are like Rembrandts. They sell based on what they’ve sold in the past. Bonds are much more rational. No-one thinks a bond’s value will soar to the moon.” “Imagine if every pension fund in Americabought Rembrandts. Their value would go up and they would create their own constituency.”  http://www.tilsonfunds.com/
Sunk costs: 

“Failure to handle psychological denial is a common way for people to go broke. You’ve made an enormous commitment to something.You’ve poured effort and money in.  And the more you put in, the more that the whole consistency principle makes you think,” Now it has to work. If I put in just a little more, then it ’all work…. People go broke that way —because they can ’t stop,rethink,and say,” I can afford to write this one off and live to fight again.  I don’t have to pursue this thing as an obsession —in a way that will break me.”  http://www.poorcharliesalmanack.com/pdf/page228.pdf


“The reason we avoid the word ‘synergy’ is because people generally claim more synergistic benefits than will come. Yes, it exists, but there are so many false promises.Berkshire is full of synergies — we don’t avoid synergies, just claims of synergies.” http://www.fool.com/news/foth/2001/foth010508.htm


“I think we have some special talents. That being said, I think it’s dangerous to rely on special talents — it’s better to own lots of monopolistic businesses with unregulated prices. But that’s not the world today. We have made money exercising our talents and will continue to do so.”  http://www.fool.com/news/foth/2002/foth020515.htm


“The tax code gives you an enormous advantage if you can find some things you can just sit with.” http://www.kiplinger.com/personalfinance/features/archives/2005/11/munger.html


“We don’t have any miraculous way of avoiding taxes at Wesco and Berkshire.” http://www.tilsonfunds.com/


“My attitude toward taxes is that if I were running the world, we’d have a very substantial consumption tax, and the tax on earned income would be 40% at the top and taxes on long-term capital gains would be 20%.  And by the accident of history, we’re not that far away from where we ought to be.  I love consumption taxes – they’re so effective.  That that’s why conservatives hate them – they work and the government gets a lot of money to spend.  In New Zealand, there’s a national 10% consumption tax.  Is it so bad to have to pay 10% extra if you go out for a nice meal or charter a plane?  I don’t worry about the miser who accumulates money and dies with it.  What harm is he doing?   A 50% corporate tax rate would be too high.  …I’m not in favor of doing away with the 50% estate tax on people like me, but there should be a big exemption.  Someone who builds a small business shouldn’t be whacked, but there’s nothing wrong with saying give 50% to society when you die if you’ve done really well.” http://www.tilsonfunds.com/wscmtg04notes.doc


“Even if you assume that the whole economy would work better had we never had double taxation, having the envy and resentment of the richest paying low or no taxes screams of injustice. You have to have a fair system.”  http://www.tilsonfunds.com/


“If you’re going to buy something which compounds for 30 years at 15% per annum and you pay one 35% tax at the very end, the way that works out is that after taxes, you keep 13.3% per annum.  In contrast, if you bought the same investment, but had to pay taxes every year of 35% out of the 15% that you earned, then your return would be 15% minus 35% of 15%—or only 9.75% per year compounded. So the difference there is over 3.5%. And what 3.5% does to the numbers over long holding periods like 30 years is truly eye-opening….”   http://ycombinator.com/munger.html

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