Warren Buffett is far more than the most successful investor in a generation. Buffett is also a businessman, philosopher, and writer who offers deep insights into many aspects of our world and life. Buffett is known as “The Oracle of Omaha;” because of his financial and philosophical wisdom. It is easy to see why people pay so much attention to Buffett.
Buffett is the third richest man in the world. Paying attention to Buffett’s wisdom is a smart move for investors and speculators because Uncle Warren built that fortune with his investing prowess and simple philosophy towards investing.
Moreover, Buffett has been investing for 77 years. He started buying stocks in 1942, at the height of World War II, and keeps investing today as CEO of Berkshire Hathaway (NYSE: BRK.B). Consequently, Buffett could have more knowledge about stocks and the market than any other living person.
Warren Buffett’s Famous Quotes
The Best Warren Buffett Quotes on Investing
“Rule No. 1: Never lose money. Rule No. 2: Never forget rule No.1.”
One of the most famous Buffett quotes of all time highlights the fact that he is a very cautious investor and will only ever make an investment with a very high probability of profiting. Warren is actually very risk-averse.
“If you understood a business perfectly and the future of the business, you would need very little in the way of a margin of safety. So, the more vulnerable the business is, assuming you still want to invest in it, the larger the margin of safety you’d need. If you’re driving a truck across a bridge that says it holds 10,000 pounds and you’ve got a 9,800-pound vehicle, if the bridge is 6 inches above the crevice it covers, you may feel okay; but if it’s over the Grand Canyon, you may feel you want a little larger margin of safety…”
The margin of safety is all about reducing the risk of an investment. The bigger the discount you can get when buying a share of a company, the less risk you have, because actually, how far further could the stock price fall?
“The most important investment you can make is in yourself.”
A timeless truth that we have all heard. He does not mean that you should work your whole life, he means to invest in your education, but more importantly, the knowledge and research you need to make great decisions in investing and life.
“The rich invest in time, the poor invest in money.”
This quote refers to the fact that if you invest your time in earning money in your job, you will never get really rich, whereas the rich invest in freeing up their time with employees and people to do the work for them.
“Long ago, Ben Graham taught me that ‘Price is what you pay; value is what you get. Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.”
A fantastic quote defining the huge difference in the price of a product and the value you derive from it. They are clearly unrelated concepts. How you value something is down to your perception, whereas the market sets the price you pay. He also highlights that his approach to buying a simple product like socks is the same way he approaches buying companies. If you feel you are getting great value at a low cost, you will make good investing decisions.
“You only find out who is swimming naked when the tide goes out.”
This witty remark refers to Wall Street and investment advisors who make predictions and tell people how to invest their money. The point here is when the stock market falls and hedge funds or managed funds go into insolvency, they are the ones swimming naked, e.g., taking too many risks with other people’s money.
“You can turn any investment into a bad deal by paying too much. What you can’t do is turn something into a good deal by paying little.”
Again referring to his ethos on buying value, even a good company can be a bad deal if the price is not right. You have to buy a good company at a great price.
“An investor needs to do very few things right as long as he or she avoids big mistakes.”
Risk is the metaphor here. Do not make risky decisions, use leverage, or trade; often, these are serious mistakes that can wipe out your good work.
“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.”
Core business school knowledge here. Any business’s goal is to gain and maintain a long-lasting competitive advantage; once you have this, the profits will roll in, and the share price will rise. You should look out for companies that have cornered the market.
“Beware the investment activity that produces applause; the great moves are usually greeted by yawns.”
One of Buffett’s strong beliefs is that boring businesses that churn out regular profits are much more important to a great investor than choosing fashionable new fast-growth businesses with higher risk. Choose the boring regular profit-making companies.
“Successful Investing takes time, discipline, and patience. No matter how great the talent or effort, some things just take time: You can’t produce a baby in one month by getting nine women pregnant.”
A witty quote that underlines what Buffett attributes his great wealth to… Time. Looking at any 10-year or 20-year period in the history of the stock market shows that stocks were always up. Extend this time over 50-years and allow your wealth and gains to compound over this period, and you will generate real wealth.
“If you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes. Put together a portfolio of companies whose aggregate earnings march upward over the years, and so also will the portfolio’s market value.”
“Buy a business; don’t rent stocks.”
These quotes reference the approach to long-term / buy and hold investing; you can and will make money in the stock market over any given 20 year period. Buying and selling stocks regularly (day trading) is a sure-fire way to failure.
“It is more important to say ‘no’ to an opportunity than to say ‘yes.”
“The ability to say ‘no’ is a tremendous advantage for an investor.”
“An investor should act as though he had a lifetime decision card with just 20 punches on it.”
Again, saying no to investments is important, investing only when a truly great opportunity arises, not buying and selling on a daily basis. Referring to a card with 20 punches on it, he means in your life, think of only investing in 20 companies, not buying and selling hundreds of stocks in a year.
“The most important quality for an investor is temperament, not intellect. You need a temperament that neither derives great pleasure from being with the crowd or against the crowd.”
“If calculus or algebra were required to be a great investor, I’d have to go back to delivering newspapers.”
“You don’t need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beats the guy with 130 IQ.”
Warren has never claimed to be a genius, and this refers to his belief that you do not need to be a rocket scientist, but you do need the right low-risk, insightful approach to evaluating companies and products.
“I’ve seen more people fail because of liquor and leverage — leverage being borrowed money. You really don’t need leverage in this world much. If you’re smart, you’re going to make a lot of money without borrowing.”
A warning from Buffett on the perils of trading stocks versus investing in great businesses. It is very fashionable to trade on leverage in Foreign Exchange, but it will lead to failure most of the time.
“Stop trying to predict the direction of the stock market; the economy, interest rates, or elections.”
Buffett does not try to make market predictions; he spends his time researching, acquiring, and running good companies. The profits will then take care of themselves.
“Growth and value investing are joined at the hip.”
There is a perception that there are two key investing areas, firstly investing for growth, meaning fast-growing companies, usually startups. Secondly, value stocks are companies whose intrinsic value is below their current market value.
“An investor should ordinarily hold a small piece of an outstanding business with the same tenacity that an owner would exhibit if he owned all of that business.”
The point here is that as a business owner, you fight really hard to keep your business running and ideally growing. If you have a few bad months, you would not sell the business and try to buy another business. Buffett believes in long-term investing and therefore compares investing in stocks to be akin to owning a business. Do not sell as soon as you see a dark cloud on the horizon.
“Why not invest your assets in the companies you really like? As Mae West said, ‘Too much of a good thing can be wonderful.'”
This is good guidance on the mental side of investing; only buy shares of a company if you are passionate about the results the business will bring. Also, if a business is great, load up on stocks.
“Be fearful when others are greedy and greedy when others are fearful.”
This is a clear nod to contrarian investing. They are taking advantage of the stock market’s schizophrenia. After a market has crashed or experienced a significant downturn, Buffett argues that this is often the best time to buy stocks because they are on sale at seriously discounted prices. When everyone is fearful, the market is usually at a 52-week low, or worse, stock prices have declined, and the margin of safety is significantly higher.
“Widespread fear is your friend as an investor because it serves up bargain purchases.”
This is a jibe at how wrong most investors are. For example, when everyone around you is talking about investing in Cryptocurrencies, it is probably time to sell. Moreover, when everyone is complaining about the huge crash in the Crypto market, it could be time to buy.
“It is optimism that is the enemy of the rational buyer.”
Wall Street has an inherent positive bias on the stocks it is trying to market. Buffett suggests that this overly positive bias is detrimental to investing success. Always learn on the side of being risk-averse and judge every investment with a critical eye.
“Buy a stock the way you would buy a house. Understand and like it such that you’d be content to own it in the absence of any market.”
Absolutely stunning advice from Buffett. This means as a shareholder in a company, if you are paid good dividends leading to a regular income and you are satisfied, this is the sign of a good company. If there was no stock market or buyers for your shares, would you still be happy with that income?
“Today, people who hold cash equivalents feel comfortable. They shouldn’t. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value.”
Most registered financial advisors and Robo Advisors suggest in modern portfolio management that you should be invested in cash and stocks depending on your risk profile. Warren rightly suggests that this thinking is false; cash investments are dead money that is not working for you.
“Investing is like baseball. If you want to score runs, don’t study the scoreboard, study the playing field.”
This quote is all about the way you select companies to invest in. Study the playing field means that you should understand the industry and competitive environment that a company operates in. Does it have a competitive advantage? Studying the scoreboard refers to staring at stock charts or even only considering a single company, not the industry.
[Related Article: 4 Steps To Building Your Own Warren Buffett Stock Screener]
Warren Buffett’s Best Quotes on Risk
“Diversification is a protection against ignorance. It makes very little sense for those who know what they’re doing.”
“Risk can be greatly reduced by concentrating on only a few holdings.”
“Risk comes from not knowing what you are doing.”
The mantra of being broadly diversified is commonly what Wall Street and investment advisors recommend. However, Buffett suggests that this is only recommended because the advisors cannot discern what truly excellent long-term investments are. This fact bare truth as you can see that nearly all diversified investments rarely beat the average stock market returns.
“You will see way more stocks that are overvalued than undervalued. It’s common for promoters to cause a stock to be valued at 5-10 times its true value, but rare to find a stock trading at 20% of its true value.”
Another truth of investing is that Wall Street overvalues most stocks. The market participants, in general, do not find the really valuable underpriced companies, and most investors do not have the patience to hold these value stocks for the long term.
“Those who regularly preach doom because of government budget deficits (as I regularly did myself for many years) might note that our country’s national debt has increased roughly 400-fold during the last of my 77-year periods. That’s 40,000%!”
” Suppose you had foreseen this increase and panicked at the prospect of runaway deficits and a worthless currency. To ‘protect’ yourself, you might have eschewed stocks and opted instead to buy [3.25] ounces of gold with your $114.75.” “And what would that supposed protection have delivered? You would now have an asset worth about $4,200, less than 1% of what would have been realized from a simple unmanaged investment in American business. The magical metal was no match for the American mettle.”
Finally, in this section, Buffett highlights the futility of closing your stock market investments to hedge against the risk of a crash. Gold is a great example here because gold or currency hedging is not actually proven to be a safe haven against the decline in stocks.
The Best Warren Buffett Quotes on Company & Stock Selection
“Never invest in a business you can’t understand.”
” We blew it.” On not buying Alphabet (NASDAQ: GOOG); or Google, years ago –
“I’ve watched Amazon from the start. I think what Jeff Bezos has done is something close to a miracle . . . the problem is when I think something will be a miracle, I tend not to bet on it.”
Buffett only invests in simple businesses that have a competitive advantage in industries that are not subject to massive change. Even though he freely admits to missing the boat on some high-tech companies, he does not hold any regrets, as you can see from the Amazon & Google quote.
“The Internet, as a phenomenon, is just huge. That much, I understand. I just don’t know how to make money at it… I don’t try to profit from the Internet. But I do want to understand the damage it can do to an established business. Our approach is very much profiting from a lack of change rather than from change. With Wrigley chewing gum, it’s the lack of change that appeals to me. I don’t think it is going to be hurt by the Internet. That’s the kind of business I like.”
Here, Buffett explains that for him, the speed of development and the unseen risks of industry disruption is something he cannot foresee, representing a risk he is unwilling to invest in.
“If a business does well, the stock eventually follows.”
Wall Street analysts will eventually discover businesses that are making regular profits and controlling their costs in an industry in which they have an advantage, and the stock will rise accordingly.
“Only buy something that you’d be perfectly happy to hold if the market shut down for ten years.”
Again, he is referring to buying shares in a business regardless of what the market thinks and how the market values the stock.
“What an investor needs is the ability to correctly evaluate selected businesses. Note that word “selected”: You don’t have to be an expert on every company or even many. You only have to be able to evaluate companies within your circle of competence. The size of that circle is not very important; knowing its boundaries, however, is vital.”
Do not spread your focus too widely; evaluate what you know in an industry that you know, and you will be able to uncover the gems that will make you money.
“Do not take yearly results too seriously. Instead, focus on four or five-year averages.”
“Our favorite holding period is forever.”
Focusing on the long-term is what Warren preaches; this is another example to help people relax about their investments and focus on the long-term future.
“Focus on return on equity, not earnings per share.”
This refers to focusing on the value of a company, not the speed of their earning increases.
“What the wise do in the beginning, fools do in the end.”
The wise people here are people like Buffett who find great companies at low market valuations and buy them. The fools are the majority of investors who jump on the investing bandwagon too late when the share price is so high it is difficult to make a good profit. Towards the end of a stock market crash, everyone is selling their holdings (the fools), whereas the wise are buying.
“Nobody buys a farm based on whether they think it’s going to rain next year. They buy it because they think it’s a good investment over 10 or 20 years.”
“Lethargy bordering on sloth should remain the cornerstone of an investment style.”
Referring to day traders and swing traders, Buffett warns against frequent trading. Lethargy and sloth also mean not to be an active investor trading the markets every day; let the businesses you buy work for you in the long-term.
“Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble.”
If you do find a great investment opportunity, grab it with both hands, and enjoy the windfall, do not be overly cautious.
“Turnarounds seldom turn.”
The fact is, if a business is in a crisis and needs a turnaround, then there is something wrong with the economics of the business, industry, or market. This represents a risk Buffett is unlikely to take. Although in 2008, he did invest in banks going through the financial crisis, he only did that with guaranteed returns on preference shares and debt, therefore reducing his risk significantly.
“Buy companies with strong histories of profitability and with a dominant business franchise.”
The common theme of competitive advantage and the ability to scale is the mantra here. Buffett has a set of specific investing rules that he follows to find companies with great histories of growth and stability.
“Time is the friend of the wonderful company, the enemy of the mediocre.”
Mediocre companies will eventually lose out to fitter and stronger companies. The wonderful company with a competitive advantage and long-term profitability will win over time.
“In the short term, the market is a popularity contest. In the long term, the market is a weighing machine.”
The media and Wall Street are constantly promoting fashionable stocks; Buffett rebels against this popularity contest. The weighing machine refers to the fact that good companies’ market dominance and profitability will mean eventually they will be valued highly.
“Unless you can watch your stock holding decline by 50 percent without becoming panic-stricken, you should not be in the stock market.”
This refers to having the patience and belief in an investment throughout the inevitable dips and crashes in the stock market. Mr. Market is paranoid and emotional, and the valuations it places on companies are rarely correct in the short-term.
“For the investor, a too-high purchase price for the stock of an excellent company can undo the effects of a subsequent decade of favorable business developments.”
Again the concepts of the price you pay to hold stock. If you pay a high price for those earnings (price/earnings ratio), it may cost you long-term.
Warren Buffett Quotes On Business
“In the business world, the rear-view mirror is always clearer than the windshield.”
This commentary on business decision-making essentially means that it is easy to see your errors when you look back on your historical decisions. Understanding all the ramifications of the decisions you are making now is much more difficult, do not get hung up on past decisions or people’s views of them.
“I am a better investor; because I am a businessman and a better businessman because I am an investor.”
Buffett is very proud of not just being an investor but also running and growing a huge business. Having business acumen and experience in running businesses is of great help for long-term investors. What stocks does Warren Buffett’s portfolio own?
“Amazon itself has become a brand. Kirkland is now a brand doing $39 billion. Kirkland does more business than Coke does. Certain retail systems have gained some power, and particularly in the case of Amazon and Walmart and Costco, have gained in power relative to brands.”
An insight into the fact that logistics businesses can also become the main product or service and strong branding plus global reach can help the business accelerate into industry leadership.
“The business schools reward difficult, complex behavior more than simple behavior, but simple behavior is more effective.”
Buffett never went to business school; he has a simple yet powerful approach to business based on numbers and good ethical business decision-making. Business schools, he believes, obstruct the simplicity of building and running a business.
“I try to invest in businesses that are so wonderful that an idiot can run them. Because sooner or later, one will.”
An excellent insight into the fact that many businesses begin to fail when the third generation of family owners take over. So a business that is so simple any idiot can run it is a maxim that reminds us of the risks of nepotism.
“Pricing your products is an ongoing process that requires a good mix of math and market research. All business owners need to learn how to do it right”.
Finally, in this section, Buffett believes that the correct pricing of any product can be the deciding factor in a business’s success.
Interesting Warren Buffett Quotes On Berkshire Hathaway
This is a selection of self-explanatory quotes from letters to Berkshire Hathway shareholders.
“We do not view the company itself as the ultimate owner of our business assets but instead view the company as a conduit through which our shareholders own assets.”
Berkshire Hathaway is indeed a Fortune 500 company, but the leaders, Buffett included, see it more as an active fund acquiring assets for its shareholder.
“Fortunately, it’s not necessary to evaluate each tree individually to make a rough estimate of Berkshire’s intrinsic business value. That’s because our forest contains five “groves” of major importance, each of which can be appraised, with reasonable accuracy, in its entirety.”
Buffett is intimating that Berkshire has so many individual companies under ownership that it makes more sense to evaluate each subsidiary as a whole rather than focussing on each entity separately.
“In recent years, the sensible course for us to follow has been clear: Many stocks have offered far more for our money than we could obtain by purchasing businesses in their entirety.”
This refers to the fact that if Berkshire Hathaway was interested in buying an entire company, this would instantly boost the stock price to a point where the margin of safety is destroyed. So, acquiring stock slowly over time has been the right strategy.
“When we say “earned,” moreover, we are describing what remains after all income taxes, interest payments, managerial compensation (whether cash or stock-based), restructuring expenses, depreciation, amortization, and home-office overhead.”
Buffett is here discussing real earnings or after-tax profits as opposed to the earnings often referenced in the stock market, such as accounting jargon like pre-tax earnings EBITDA (before interest, tax, depreciation, and amortization) etc.
“Despite our recent additions to marketable equities, the most valuable grove in Berkshire’s forest remains the many dozens of non-insurance businesses that Berkshire controls (usually with 100% ownership and never with less than 80%). Those subsidiaries earned $16.8 billion last year.” – Clarification: this quote comes from Buffett’s 23 February 2019 Letter to Berkshire Hathaway Stockholders.
“Daily, we do what we find interesting, working with people we like and trust. And now our new management structure has made our lives even more enjoyable.” – Buffett on his job at Berkshire Hathaway.
“It is a terrible mistake for investors with long-term horizons — among them pension funds, college endowments, and savings-minded individuals — to measure their investment’ risk’ by their portfolio’s ratio of bonds to stocks.”
“Focus on operating earnings, paying little attention to gains or losses of any variety. My saying that in no way diminishes the importance of our investments to Berkshire.”
This is essentially a comment on modern portfolio management theory, which essentially suggests that the limitation of risk is by splitting your portfolio across stocks and bonds. The focus should actually be that the stocks are of high quality with a high margin of safety. You limit risks by purchasing stocks of great companies at great prices, not by adding bonds to your portfolio.
“Berkshire, in fact, maybe the only company in the Fortune 500 that does not prepare monthly earnings reports or balance sheets. I, of course, regularly view the monthly financial reports of most subsidiaries. But Charlie and I
learn of Berkshire’s overall earnings and financial position only on a quarterly basis.”
If Buffett does not focus on the minutiae of every company’s quarterly earnings, why should you?
“Furthermore, Berkshire has no company-wide budget (though many of our subsidiaries find one useful). Our lack of such an instrument means that the parent company has never had a quarterly “number” to hit. Shunning the use of this bogey sends an important message to our many managers, reinforcing the culture we prize.”
Warren Buffett’s Best Advice on Success & Life
“The difference between successful people and really successful people is that really successful people say no to almost everything.”
Buffett clearly gets pitched on investing opportunities on an almost daily basis, but if they do not meet his investing criteria, he will usually say no. This he attributes to his immense success.
“It is not necessary to do extraordinary things to get extraordinary results.”
A self-deprecating Buffett always maintains that who he is and what he does is not particularly special, just common sense.
“Only when you combine sound intellect with emotional discipline do you get rational behavior.”
“If you cannot control your emotions, you cannot control your money.”
Referring to the emotional and logical balance required in good decision making, Buffett makes a serious statement about how to approach all decisions, not just investing.
“Without passion, you don’t have energy. Without energy, you have nothing.”
Set goals that make you passionate is you are passionate about what you do; you will be motivated. That motivation will give you the energy to keep going. Buffett is in his mid 80’s and will never retire due to his energy and passion.
“Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks.”
Here Buffett shares a pearl of wisdom regarding seeing problems for what they really are. Here the problem larger than most people would understand; you need to be able to see the big picture problem and be prepared to make drastic changes.
“If you are in a poker game and after 20 minutes, you don’t know who the patsy is, then you’re the patsy.”
I love this quote and use it all the time, but what it is really saying to you should look at the motivations of others; if you do not understand who is going to lose on a deal, it is probably you.
“Can you really explain to a fish what it’s like to walk on land? One day on land is worth a thousand years of talking about it, and one day running a business has exactly the same kind of value.”
This really means that talk is cheap; if you want to gain insight and experience, you actually have to go and do it.
“If past history was all that is needed to play the game of money, the richest people would be librarians.”
Referring to the stock chart analysis, Buffett is explaining that the past history of a stock price is no indicator of future performance. The key to investing is understanding and discovering a valuable business at a great price.
“Someone’s sitting in the shade today because someone planted a tree a long time ago.”
This refers to the fact we are all sitting on the shoulders of giants, and we all benefit from the hard work and foresight of our ancestors that went before us.
“Tell me who your heroes are, and I’ll tell you how you’ll turn out to be.”
“It’s better to hang out with people better than you. Pick out associates whose behavior is better than yours, and you’ll drift in that direction.”
These quotes share the insight that Buffett attributes his financial success to his mentor, the great Ben Graham, the author of the original work on value investing, “The Intelligent Investor.” If you choose the right mentor or heroes, you will follow them.
“If you are stuck in a hole, stop digging.”
When all you are doing is contributing to your own problems, you need to stop.
“If you don’t find a way to make money while you sleep, you will work until you die.”
This means getting your money working for you and not you working for your money. You need to make investments that will pay you back regularly, such as dividend investing for regular income.
Chains of habit are too light to be felt until they are too heavy to be broken.
This quote is incredibly philosophical, referring to everything from addiction to drugs and alcohol to the things we do every day in life.
There seems to be some perverse human characteristic that likes to make easy things difficult.
Never a truer word said, from investing to trading and in our technology, things can get very complicated quickly. Producers add features and benefits to separate themselves from the competition, but often it simply adds complications to essentially simple things.
“Those who know the edge of their own competency are safe, and those who don’t aren’t.”
This means you should really try to understand what you are good at and what you are not. We, humans, over-estimate our real abilities most of the time. Do this while investing, and you are likely to lose money through your own incompetence.
“I want to give my kids just enough so that they would feel that they could do anything, but not so much that they would feel like doing nothing.”
There have been many articles written on Buffett’s inheritance plans for his family. Still, ultimately the fortune will not go to them as he will be giving the majority to charitable causes like the Bill and Melinda Gates Foundation.
“You can’t make a good deal with a bad person.”
“It is impossible to unsign a contract, so do all your thinking before you sign.”
This is clearly about doing your due diligence, whether you are investing in the market, buying a house, or even getting married. Do the research and make the right decision.
Warren Buffett on Love and Integrity
“I measure success by how many people love me.”
“Money, to some extent, sometimes lets you be in more interesting environments. But it can’t change how many people love you or how healthy you are.”
“Basically, when you get to my age, you’ll really measure your success in life by how many of the people you want to have love you actually do love you.”
“In the world of business, the people who are most successful are those who are doing what they love.”
“If you get to my age in life and nobody thinks well of you, I don’t care how big your bank account is; your life is a disaster. That’s the ultimate test of how you have lived your life.”
Fine words from a good man; even though he is one of the richest men globally, he still does fundamentally understand that you have essentially failed in life without love.
Warren Buffett Quotes on Money & Advice
“Never ask a barber if you need a haircut.”
The point Warren is making is that, of course, stockbrokers will tell you to continually buy and sell stocks and funds because they make money when you do. However, all that is to you is cost.
“The advice ‘you never go broke taking a profit’ is foolish.”
This is indeed true; if you only take small profits, you may not cover your living expenses or the time you spend on investing. Essentially, you want to hold out for larger, more gradual profits over time.
“Honesty is a very expensive gift. Don’t expect it from cheap people.”
A social commentary suggesting that most people are not honest with you, so when someone is honest, appreciate it, and do not expect honesty from people you do not trust.
“Forecasts may tell you a great deal about the forecaster; they tell you nothing about the future.”
The next time you see someone talking extremely positively about a stock or the market direction, ask yourself why they are trying to sell you the idea.
“Calling someone who trades actively in the market an investor is like calling someone who repeatedly engages in one-night stands a romantic.”
Here the message is that people who trade stocks are not investors; they are traders, and traders are promiscuous. An investor should be in love with the investment.
“No one cares more about your money than you do.”
Wall Street has a similar phrase, “Other people’s money.” Both of these quotes refer to the fact that if you give your money to someone to invest; they will not take care of it as you would; they may take unnecessary risks with it.
“The stock market is designed to transfer money from the active to the patient.”
This is so true. Traders pay a lot of money to transact shares in companies, the more active you are is not related to your profits, only to your costs.
“Wall Street is the only place that people ride to in a Rolls Royce to get advice from those who take the subway.”
This is one of my favorites. He is, of course, referring to the fact that rich people are taking advice from the less wealthy on how to make money.
The Best Warren Buffett Quotes On Business Leadership and Ethics
“If you’ve got a good enough business, if you have a monopoly newspaper, if you have a network television station — I’m talking of the past — you know, your idiot nephew could run it. And if you’ve got a really good business, it doesn’t make any difference.”
The point here is that a really great business can be run by anyone as long as the business fundamentals remain the same.
“And if it’s okay for the boss to cheat a little, it’s easy for subordinates to rationalize similar behavior.”
“What starts as an “innocent” fudge in order to not disappoint “the Street” – say, trade-loading at quarter-end, turning a blind eye to rising insurance losses, or drawing down a “cookie-jar” reserve – can become the first step toward full-fledged fraud.”
These two quotes are an important insight on how corruption starts, small slights of hand or unethical activities can grow over time into large-scale scandals and corruption.
“It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”
Finally, a simple yet powerful warning from Buffett about how unethical activities can ruin your career, life, relationships, and even investments.
As you can see, Warren Buffett’s wisdom covers many topics. Reading Buffett will always give you valuable insight into life, ethics, philosophy, the economy, human nature, and the market.
If you have any Warren Buffett quotes that you love, leave a comment below and let us know.