He is one of the most Successful Investors of all time. He bought his first stock at age 11 and filed taxes at age 13.
Warren Buffett is exceptional at expressing immense amount of wisdom in only a few words.
Here are 25 quotes from the Oracle of Omaha.
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| Source: "Warren Buffett - Caricature" by DonkeyHotey Under Creative Commons license |
These quotes would be more helpful and beneficial for you if you not just read them but also take your time to think about them and try to understand what the authors wants to say. So let's start,
1. Price is what you pay. Value is what you get.
Price and value are not always the same and understanding the differences between them is the basic principle of value Investing.
For eg:- You bought a laptop from the store at 480 today at discount of 20%. The next day your friend went to buy the same laptop at the same store but he had to pay 600 because there was no discount on that day.
So here the value of the both laptops is same but you both have paid different prices for it.
2. Time is the friend of the wonderful company, the enemy of the mediocre.
Buffett only focuses on the quality stocks and businesses, he says, "Only buy something that you'd be perfectly happy to hold if the market shut down for 10 years."
3. Risk comes from not knowing what you're doing.
Warren always says that if an Investor understands the business, the risk involved is significantly reduced as he can understand the economic characteristic of the business. On the other hand if the Investor doesn't understand what he is doing, what is the business about, then he increase the degree of the risk he is taking on a particular investment.
4. I always knew I was going to be rich. I don't think I ever doubted it for a minute.
If you read about great personalities, almost everyone would say they had unwavering confidence in them that they would succeed in their life.
5. The most important thing to do if you find yourself in a hole is to stop digging.
Buffett says its a human tendency to justify old decisions. But its important to accept your mistakes as soon as you know about it.
Then find a way to get out of it instead of keep doing the same mistake.
6. 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.
The person you would be in 5 years depends on the books you read and the people you surround yourself with.
7. There seems to be some perverse human characteristic that likes to make easy things difficult.
Warren Buffett always like to keep things simple. This can be seen in the "two rules of Investing" given by him;
Rule #1 is never lose money
Rule #2 is never forget rule #1.
8. The investor of today does not profit from yesterday's growth.
The past performance of the stock or business doesn't guarantee the future returns.
9. I don't look to jump over 7-foot bars, I look around for 1-foot bars that I could step over.
Buffett tells here the importance of the small steps in Investing and in life.
It's the small steps everyday that gets compounded and make the big difference.
10. You can't make a good deal with a bad person.
Always know who you are dealing with.
11. Wide diversification is only required when Investors do not understand what they are doing.
If you are not an expert investor with a deep understanding of your investments then wide diversification might help you. But if you understand your investments then wide diversification would only hold you back from creating wealth.
12. Never invest in a business you cannot understand.
Buffett have very few investments in technology.
He passed on an investment opportunity in google because he didn't understand how google would produce a profitable competitive advantage over its peers.
He says he don't want to expose himself and his Berkshire Investors to the risks associated with Investing in something he doesn't fully understand.
13. No matter how great the talent or efforts, some things just take time. You can't produce a baby in one month by getting nine women pregnant.
This quote is equally humorous and relevant. When you invest in a business, you can't expect immediate returns. You have to give some time to your investments.
Expecting immediate returns can negatively effect your strategy towards your investment.
14. Cash combined with courage in a time of crisis is priceless.
Wealth is build during the bear market. If you can handle your emotions, the bear markets could be your best friends.
15. Only when the tide goes out do you discover who's been swimming naked.
Buffett is saying here that in a business., debt, mismanagement, misleading balance sheet could be hidden from the general public and Investors and only when the whistle blows, everything starts coming out one after another and that could result in a great loss for the Investors.
Therefore the Investors should be cautious and aware of what is happening in the businesses they have invested.
16. The best business returns are usually achieved by companies that are doing something quite similar today to what they were doing five or ten years ago.
Some of the investments of Warren Buffett through Berkshire Hathaway are Coca-cola, Bank of America and Apple and they are doing almost similar to what they were doing 10-20 years ago.
17. I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful.
Buffett made some of his biggest Investments in stocks like Bank of America, Goldman Sachs, Burlington Northern Railroad during or in aftermath of the 2008 financial crisis.
18. Wall street is the only place that people ride to in a Rolls Royce to get advice from those who take the subway.
Be careful who you take advice from.
19. Diversification may preserve wealth, but concentration builds wealth.
Warren Buffett has two answers on Diversification.
(1)He says if you are not a professional investor, if your goal is average returns than you must have a wide diversification.
(2) But if you are a person who is determined to learn and understand everything about investment and business, if you are going to educate yourself and put the efforts than diversification would be a terrible mistake.
20. Once Warren Buffett was speaking to teenager's. He says, "When I was sixteen, I had just two things on my mind- girls and cars. I wasn't very good with girls. So I thought about cars. I thought about girls, too, but I had more luck with cars.
Let's say that when I turned sixteen, a genie had appeared to me. And that genie said, 'Warren, I'm going to give you the car of your choice. It'll be here tomorrow morning with a big bow tied on it. Brand new. And it's all yours'. Having heard all the genie stories, I would say, "what's the catch?" And the genie would answer, 'There's only one catch. This is the last car you're ever going to get in your life. So it's got to last a lifetime.'
If that had happened I would have picked out that car. But, can you imagine knowing it had to last a lifetime, what I would do with it? I would read the manual about five times. I would always keep it garaged. If there was the least little dent or scratch, I'd have it fixed right away because I wouldn't want it rusting. I would baby that car, because it would have to last a lifetime.
That's exactly the position you are in concerning your mind and body. And it's got to last a lifetime. Now, it's very easy to let then ride for many years. But if you don't take care of that mind and that body,they'll be a wreck forty years later, just like the car would be.
It's what you do right now,today, that determines how your mind and body will operate ten, twenty and thirty years from now".
21. If you buy things you do not need, soon you will have to sell things you need.
Next time when you're buying something, remember this simple yet effective personal finance advice from Warren Buffett.
22. I read 500 pages ... everyday. That's how knowledge works. It builds up, like compound interest. All of you can do it, but I guarantee not many of you will do it.
Warren Buffett credits his voracious reading habits for his wisdom. He stress a lot of importance to reading.
A quality that's common in every successful people.
23. Honesty is a very expensive gift. Don't expect it from cheap people.
Warren Buffett has always believe in higher values like integrity, honesty and morality.
He says that "In looking for people to hire, look for three qualities; integrity, intelligence and energy. And if they don't have the first, the other two will kill you."
24. The most important Investment you can make is in yourself.
Buffett said that the best investment he ever made was not a stock or bond or in real estate, but buying a copy of 'The Intelligent Investor'.
He says, 'The Intelligent Investor' book still guides his Investment decisions today.
25. Opportunities come infrequently, when it rains gold, put out the bucket, not the thimble.
When you see an opportunity, don't hesitate just go for it. When Warren Buffett finds a good opportunity in a particular Stock, he goes Big for it and not invests just the small amount.
These were 25 best quotes from Warren Buffett. If you liked the article share it with your future business partner and Investor friend.
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