Warren Buffett

In His Own Words

David Andrews

• Publisher: Agate B2
• Year: 2019
• ISBN:
  9781572848320
• Topic: Personal Development
• Subtopic: Personal Success

A collection of hundreds of thoughtful and inspiring quotations from "the folksy god of American capitalism" ( Vanity Fair ). For more than half a century, Warren Buffett, the chairman and CEO of Berkshire Hathaway, has been one of the world's most respected businessmen, not just because of his savvy investments and unmatched record of returns, but also because of his humility, candor, and refreshing perspective on wealth. Despite this tremendous success, the Oracle of Omaha doesn't feel entitled to the $89 billion net worth his abilities have earned him. Instead, he likes to say that he was born at the right place and time, and as an active philanthropist, he has already pledged to give most of his money to charity. This modesty in the face of proven talent is part of what makes Buffett as popular on Main Street as he is on Wall Street—he is one of the world's wealthiest men and yet he is still personable and relatable. A comprehensive guidebook to the inner workings of this business icon, Warren Buffett: In His Own Words provides insight into his thoughts on investing, Wall Street, business, politics, taxes, life lessons, and more. This collection of quotations draws from decades of interviews, editorials, and annual shareholder reports, amassing a comprehensive outline of how Buffett believes a good business is run and a good life is led. It's advice that Buffett has successfully adhered to throughout his 88 years, and it's now available in Warren Buffett: In His Own Words.

PART ONE: BUSINESS EMPIRE

Investing

RESEARCHING INVESTMENTS

WHEN I BUY a stock, I think of it in terms of buying a whole company just as if I were buying a store down the street. If I were buying the store, I’d want to know all about it.

—Forbes, November 1, 1969

LIMITING YOUR INVESTMENTS

IN THE INVESTMENT world, if you had a punch card when you got out of school, and there were only 20 punches on it, and when that was done, you were all done investing, you’d make more money than having one with unlimited punches. You’d make sure you used them for the right things.

—University of Notre Dame, spring 1991

INVESTMENT AND SPORTS

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 for the opportunity lost. All day you wait for the pitch you like; then when the fielders are asleep, you step up and hit it.

—Forbes, November 1, 1974

TED WILLIAMS DESCRIBED in his book, The Science of Hitting, that the most important thing—for a hitter—is to wait for the right pitch. And that’s exactly the philosophy I have about investing. Wait for the right pitch, and wait for the right deal. And it will come. It’s the key to investing.

—CBS News, February 8, 2012

GAMES ARE WON by players who focus on the playing field—not by those whose eyes are glued to the scoreboard. If you can enjoy Saturdays and Sundays without looking at stock prices, give it a try on weekdays.

—letter to Berkshire Hathaway shareholders, February 2014

DEGREE OF DIFFICULTY counts in the Olympics; it doesn’t count in business. You don’t get any extra points for the fact that something’s very hard to do, so you might as well step over one-foot bars rather than try to jump over seven-foot bars.

—CNBC, October 18, 2010

THINKING ABOUT INVESTMENT

The best way to think about investments is to be in a room with no one else and to just think. If that doesn’t work, nothing else is going to work.

—University of Florida, October 15, 1998

THE TEMPERAMENT OF AN INVESTOR

SUCCESS IN INVESTING doesn’t correlate with IQ once you’re above the level of 25. Once you have ordinary intelligence, what you need is the temperament to control the urges that get other people into trouble in investing.

—BusinessWeek, July 5, 1999

ORDINARY COMPETENCE, EXTRAORDINARY RESULTS

WHAT WE DO is not beyond anybody else’s competence. I feel the same way about managing that I do about investing: It’s just not necessary to do extraordinary things to get extraordinary results.

—Fortune, April 11, 1988

STUDYING FINANCIAL DATA

If merely looking up past financial data would tell you what the future holds, the Forbes 400 would consist of librarians.

—letter to Berkshire Hathaway shareholders, February 2009

KNOW YOURSELF

The unsophisticated investor who is realistic about his shortcomings is likely to obtain better long-term results than the knowledgeable professional who is blind to even a single weakness.

—letter to Berkshire Hathaway shareholders, February 2014

THE SIMPLICITY OF INVESTMENT

DRAW A CIRCLE around the businesses you understand and then eliminate those that fail to qualify on the basis of value, good management, and limited exposure to hard times.

—Forbes, November 1, 1974

I DON’T KNOW a thing now that I didn’t know at 19 when I read [Benjamin Graham’s The Intelligent Investor]. For eight years prior to that I was a chartist. I loved all that stuff. I had charts coming out my ears. Then, all of a sudden a fellow explains to me that you don’t need all that, just buy something for less than it’s worth.

—University of Notre Dame, spring 1991

I HAVE THIS complicated procedure I go through every morning, which is to look in the mirror and decide what I’m going to do. And I feel at that point, everybody’s had their say.

—The Snowball, 2008

BEATING THE MARKET

THERE IS NO hunch or intuitiveness or anything of the sort. I mean, I try to sit down and figure out what the future economic prospects of a business are.

—University of Nebraska–Lincoln, October 10, 1994

HOW DO YOU beat Bobby Fischer? You play him at any game but chess. I try to stay in games where I have an edge.

—BusinessWeek, July 5, 1999

MOST PEOPLE CAN’T do a couple percentage points better than the market. I’m telling people I still expect to do a little better than average, but nothing like I’ve done in the past. I wouldn’t be running it if I thought I would be doing just average. That may be what happens, and I know that I can’t do more than a couple points better than average. But it’s better than most people do themselves. It may be better than I do.

—Haaretz, March 23, 2011

THE ADVANTAGE OF HAVING LESS MONEY

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 percent a year on $1 million. No, I know I could. I guarantee that.

—BusinessWeek, July 5, 1999

IDEA QUOTA

MY IDEA QUOTA used to be like Niagara Falls—I’d have many more than I could use. Now it’s as if someone had dammed up the water and was letting it flow with an eyedropper.

—Forbes, November 1, 1969

WHEN I GOT started, the bargains were flowing like the Johnstown Flood; by 1969 it was like a leaky toilet in Altoona.

—Forbes, November 1, 1974

LONG-TERM INVESTMENT

I BELIEVE IN owning productive assets … whether it’s farms, apartment houses, or businesses. And they’ll do very well over time, and sometimes one class is doing better than another. But if you own any of those things over the next 20 years in the United States, I think you’ll do well.

—CNBC, November 14, 2011

WE DON’T WANT to own things where the world is going to change rapidly because I don’t think I can see change that well or any better than the next fellow. So, I really want something that I think is going to be quite stable, that has very good economics going for it.

—University of Nebraska–Lincoln, October 10, 1994

LONG-TERM INVESTMENT

The future is never clear; you pay a very high price in the stock market for a cheery consensus. Uncertainty actually is the friend of the buyer of long-term values.

—Forbes, August 6, 1979

SPECULATION VS. INVESTMENT

THERE’S NOTHING IMMORAL or illegal or fattening about speculation, but it is an entirely different game to buy a lump of something and hope that somebody else pays you more for that lump two years from now than it is to buy something you expect to produce income for you over time. I bought a farm 30 years ago, not far from here. I’ve never had a quote on it since. What I do is I look at what it produces every year, and it produces a very satisfactory amount relative to what I paid for it.

—CNBC, March 2, 2011

INVESTING IN VALUE

IF YOU OWN a business, and you plow back a good portion of your earnings into building the business, you’re going to have something more valuable on average year after year. Now, sometimes the market reflects it and sometimes it’s crashing for some other reason or whatever. But the stock market builds in value, underlying value, from year to year.

—Bloomberg Markets, August 30, 2018

TALK YOURSELF DOWN

THE WHOLE MENTALITY of Wall Street is that if you buy something—even if you’re going to buy more of it later on, or if the company is going to buy its own stock in—the people seem to think that they’re better off if it goes up the next day, or the next week, or the next month, and that’s why they talk about “talking your book...

Table of contents

• Cover
• Title Page
• Copyright
• Contents
• Introduction
• Part I: Business Empire
• Part II: Wealth
• Part III: Wit and Wisdom
• Milestones