Quotes About Risk

as happens in Wall Street all too often, what the wise do in the beginning, fools do in the end.

Derivatives are financial weapons of mass destruction.

If you wait till you know everything it's too late

You should never test the depth of the water with both feet.

From this irritating reality comes The First Law of Corporate Survival for ambitious CEOs who pile on leverage and run large and unfathomable derivatives books: Modest incompetence simply won't do; it's mindboggling screw-ups that are required.

The stock market is a device for transferring money from the impatient to the patient.

It is madness to risk losing what you need in pursuing what you simply desire.

For investors as a whole, returns decrease as motion increases.

A good business is not always a good purchase - although it's a good place to look for one.

A small chance of distress or disgrace cannot, in our view, be offset by a large chance of extra returns.

Wide diversification is only required when investors do not understand what they are doing.

Risk comes from not knowing what you're doing.

Instead, he takes those coupons from his low-return bond and—if inclined to reinvest—looks for the highest return with safety currently available.  Good money is not thrown after bad.

say, a 2:1 ratio than it is to have far greater coverage provided by a single utility. A catastrophic event can render a single utility insolvent—witness what

For these investors, it would have been far better if Orville had failed to get off the ground at Kitty Hawk: The more the industry has grown, the worse the disaster for owners.

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. In stating this opinion, we define risk, using dictionary terms, as "the possibility of loss or injury.

I've never believed in risking what my family and friends have and need in order to pursue what they don't have and don't need.

an unvaryingly strong liquid position and avoidance of money-market borrowings;

In our book, alignment means being a partner in both directions, not just on the upside. Many "alignment" plans flunk this basic test, being artful forms of "heads I win, tails you lose.

Warren Buffett

Predicting the long-term economics of companies that operate in fast-changing industries is simply far beyond our perimeter.

Our basic principle is that if you want to shoot rare, fast-moving elephants, you should always carry a loaded gun. p217

Our aversion to leverage has dampened our returns over the years. But Charlie and I sleep well. Both of us believe it is insane to risk what you have and need in order to obtain what you don't need. We held this view 50 years ago when we each ran an investment partnership, funded by a few friends and relatives who trusted us. We also hold it today after a million or so "partners" have joined us at Berkshire.

When Charlie and I finish reading the long footnotes detailing the derivatives activities of major banks, the only thing we understand is that we don't understand how much risk the institution is running.