Quotes About Investing

Loss of focus is what most worries Charlie and me when we contemplate investing in businesses that in general look outstanding. All too often, we've seen value stagnate in the presence of hubris or of boredom that caused the attention of managers to wander.

especially favourable future prospects were regarded by shrewd investors as something to look for but not to pay for

Charlie and I would follow a buy-and-hold policy even if we ran a tax-exempt institution.

While investors and managers must place their feet in the future, their memories and nervous systems often remain plugged into the past. 

Warren Buffett

When Walter and Edwin were asked in 1989 by Outstanding Investors Digest, "How would you summarize your approach?" Edwin replied, "We try to buy stocks cheap." So much for Modern Portfolio Theory, technical analysis, macroeconomic thoughts and complex algorithms.

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.

Year-to-year variances, however, cannot consistently be in our favor. Even if our partially-owned businesses continue to perform well in an economic sense, there will be years when they perform poorly in the market. At such times our net worth could shrink significantly. We will not be distressed by such a shrinkage; if the businesses continue to look attractive and we have cash available, we simply will add to our holdings at even more favorable prices.

Loss of focus is what most worries Charlie and me when we contemplate investing in businesses that in general look outstanding.

When "dumb" money acknowledges its limitations, it ceases to be dumb.

Some Thoughts About Investing

If you invested in a low-cost index fund--where you don't put the money in at one time, but average in over 10 years--you'll do better than 90% of people who start investing at the same time.

In business, I look for economic castles protected by unreachable moats.

Investing is an activity in which consumption today is foregone in an attempt to allow greater consumption at a later date. "Risk" is the possibility that this objective won't be attained. By that standard, purportedly "risk-free" long-term bonds in 2012 were a far riskier investment than a long- term investment in common stocks. At that time, even a 1% annual rate of inflation between 2012 and 2017 would have decreased the purchasing-power of the government bond

I think that, every time you see the word EBITDA, you should substitute the words "bullshit earnings.

It's not possible for investors to consistently outperform the market. Therefore you're best served investing in a diversified portfolio of low-cost index funds [or exchange-traded funds].

Never invest in any idea you can't illustrate with a crayon.

What counts for most people in investing is not how much they know, but rather how realistically they define what they don't know.

The business side of real estate investing is fraught with risk. Unlike purchasing mutual funds or savings bonds, with real estate, you can lose money; this is one of the reasons that seasoned real estate investors caution neophytes never to get too emotional about a property and always be willing to walk away.

I have never been a fan of bond funds. Unlike a direct investment in an individual bond that you can hold to maturity and be assured you will get your principal back (assuming no default), a fund has no finite maturity date and most funds are actively traded.

Most philanthropists want to be effective altruists. But the problem isn't intention: it's measurement. Unlike financial investing, which has reporting standards, audit processes, and educational requirements, social investing is notoriously tricky to evaluate.

If a product's future is unlikely to be remarkable - if you can't imagine a future in which people are once again fascinated by your product - it's time to realize that the game has changed. Instead of investing in a dying product, take profits and reinvest them in building something new.

Investing is about predicting the future, and the future is inherently unpredictable. Therefore, the only way you can do better is to assess all the facts and truly know what you know and know what you don't know. That's your probability edge.

It's waiting that helps you as an investor, and a lot of people just can't stand to wait. If you didn't get the deferred-gratification gene, you've got to work very hard to overcome that.