Most Quoted Investor: Warren Buffet

Warren Buffet, the "Oracle of Omaha"

Dubbed the "Oracle of Ohama" after his Nebraska hometown, Buffet is noted for his belief in investing and for his personal frugality despite his immense wealth. In the past he has said he believed the financial markets should be more tightly regulated.

The young Buffet was a financial prodigy but also something of a juvenile deliquent. Born Aug. 30, 1930, Buffet came into the world less than a year after the stock market crash. The little boy Buffet proved that no matter how dire the arena, it’s possible to make money. Warren sold chewing gum door to door, sold soft drinks, threw newspapers. Mostly, though, he saved money. By age 14, he was filing federal tax returns on his income. By 16, he had thrown half a million newspapers and had made US$ 5,000. That sum in today’s money would be more than US$ 50,000.

As a child, Buffet announced he would be a millionaire by the age of 35. He achieved that goal and much more. How exactly did he do it ?
At a dinner party Buffet once attended, the host asked the table: What factor is most important in your success. Buffet answered "focus". Notably, one other guest at the dinner had the same answer: Bill gates.

Once, when asked why he this drive to make so much money, he replied: "It’s not that I want money. It’s the fun of making money and watching it grow. Buffet’s attitude towards money is futere-oriented. When he loses -or even spend- a dollar he doesn’t think of the dollar, but what the dollar could have become.

Buffet’s wife was a virtuoso shopper. She dropped $15,000 on a home refurnishing, which "just about killed Warren," according to Bob Billig, one of his golfing pals, Buffet gripped to Billig, "do you know how much that is if you compound it over 20 years ?"

This attitude towards money permeates his investment thinking. For example, at the 1992 Berkshire annual meeting he said: "I guess my worst decision was that I went into a service station when I was 20 or 21. And I lost 20% of my net worth. So that service station’s cost me about $800 million now, I gues."

Warren Buffett is mistakenly called a "value investor." He isn’t — or at least he hasn’t been since the early 1960s. Buffett is more of a demographic investor. His long-term nature means he generally doesn’t do what value guys do: buy when stock that is worth less than its value; sell when it hits its value. He’s got too much money to work with and so takes a much longer term view.

"Rule No. 1: Never Lose Money. Rule No. 2: Never Forget Rule No. 1."

Buffett personally lost about $23 billion in the financial crisis of 2008, and his company, Berkshire Hathaway, lost its revered AAA ratings. So how can he tell us to never lose money?

He’s referring to the mindset of a sensible investor. Don’t be frivolous. Don’t gamble. Don’t go into an investment with a cavalier attitude that it’s OK to lose. Be informed. Do your homework. Buffett invests only in companies he thoroughly researches and understands. He doesn’t go into an investment prepared to lose. Buffett believes the most important quality for an investor is temperament, not intellect. A successful investor doesn’t focus on being with or against the crowd.

WARREN BUFFET QUOTES

"It is not risky to buy securities at a fraction of what they are worth."

Warren Buffet


"If you don’t understand it, don’t do it."

Warren Buffet


"The trick is, when there’s nothing to do, do nothing."

Warren Buffet


"An investor needs to do very few things as long as he or she avoids big mistakes."

Warren Buffet


"My idea of a group decision is to look in the mirror."

Warren Buffet


"A public-opinion poll is no substitute for thought."

Warren Buffet


"Beware of geeks bearing formulas."

Warren Buffet


"Chains of habit are too light to be felt until they are too heavy to be broken."

Warren Buffet


"Derivatives are financial weapons of mass destruction."

Warren Buffet


"I buy expensive suits. They just look cheap on me."

Warren Buffet


"I don’t look to jump over 7-foot bars: I look around for 1-foot bars that I can step over. "

Warren Buffet


"I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years."

Warren Buffet


"If a business does well, the stock eventually follows."

Warren Buffet


"In the business world, the rearview mirror is always clearer than the windshield."

Warren Buffet


"It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently."

Warren Buffet


"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.."

Warren Buffet


"It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price."

Warren Buffet


"Let blockheads read what blockheads wrote."

Warren Buffet


"Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it."

Warren Buffet


"Of the billionaires I have known, money just brings out the basic traits in them. If they were jerks before they had money, they are simply jerks with a billion dollars. "

Warren Buffet


"Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years."

Warren Buffet


"Only when the tide goes out do you discover who’s been swimming naked."

Warren Buffet


"Our favorite holding period is forever. "

Warren Buffet


"Price is what you pay. Value is what you get."

Warren Buffet


"Risk comes from not knowing what you’re doing."

Warren Buffet


"Risk is a part of God’s game, alike for men and nations."

Warren Buffet


"Rule No.1: Never lose money. Rule No.2: Never forget rule No.1."

Warren Buffet


"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."

Warren Buffet


"Someone’s sitting in the shade today because someone planted a tree a long time ago."

Warren Buffet


"The business schools reward difficult complex behavior more than simple behavior, but simple behavior is more effective."

Warren Buffet


"The investor of today does not profit from yesterday’s growth."

Warren Buffet


"The only time to buy these is on a day with no "y" in it. "

Warren Buffet


"The smarter the journalists are, the better off society is. For to a degree, people read the press to inform themselves-and the better the teacher, the better the student body."

Warren Buffet


"There are 309 million people out there that are trying to improve their lot in life. And we’ve got a system that allows them to do it."

Warren Buffet


"There seems to be some perverse human characteristic that likes to make easy things difficult."

Warren Buffet


"Time is the friend of the wonderful company, the enemy of the mediocre."

Warren Buffet


"Wall Street is the only place that people ride to in a Rolls Royce to get advice from those who take the subway."

Warren Buffet


"We believe that according the name ‘investors’ to institutions that trade actively is like calling someone who repeatedly engages in one-night stands a ‘romantic.’"

Warren Buffet


"We enjoy the process far more than the proceeds."

Warren Buffet


"We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful."

Warren Buffet


"When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact."

Warren Buffet


"When you combine ignorance and leverage, you get some pretty interesting results."

Warren Buffet


"Why not invest your assets in the companies you really like? As Mae West said, ‘Too much of a good thing can be wonderful’."

Warren Buffet


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

Warren Buffet


"You only have to do a very few things right in your life so long as you don’t do too many things wrong."

Warren Buffet


"Your premium brand had better be delivering something special, or it’s not going to get the business."

Warren Buffet