1) Rule No. 1: never lose money; rule No. 2: don’t forget rule No. 1.
2) The stock market is a no-called-strike game. You don’t have to swing at everything — you can wait for your pitch. The problem when you’re a money manager is that your fans keep yelling, ‘Swing, you bum!’
3) 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.
4) Wall Street is the only place that people ride to in a Rolls-Royce to get advice from those who take the subway.
5) The line separating investment and speculation, which is never bright and clear, becomes blurred still further when most market participants have recently enjoyed triumphs. Nothing sedates rationality like large doses of effortless money. After a heady experience of that kind, normally sensible people drift into behavior akin to that of Cinderella at the ball. They know that overstaying the festivities — that is, continuing to speculate in companies that have gigantic valuations relative to the cash they are likely to generate in the future — will eventually bring on pumpkins and mice. But they nevertheless hate to miss a single minute of what is one helluva party. Therefore, the giddy participants all plan to leave just seconds before midnight. There’s a problem, though: They are dancing in a room in which the clocks have no hands.
6) 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.
7) You only find out who is swimming naked when the tide goes out.
8) When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.
9) Our approach is very much profiting from lack of change rather than from change. With Wrigley chewing gum, it’s 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.
10) Time is the friend of the wonderful business, the enemy of the mediocre.
11) The best thing that happens to us is when a great company gets into temporary trouble … We want to buy them when they’re on the operating table.
12) I have pledged — to you, the rating agencies and myself – to always run Berkshire with more ample cash. We never want to count on the kindness of strangers in order to meet tomorrow’s obligations. When forced to choose, I will not trade even a night’s sleep for the chance of extra profits.
13) I try to buy stock in businesses that are so wonderful that an idiot can run them. Because sooner or later, one will.
14) Over the long term, the stock market news will be good. In the 20th century, the United States endured tow world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a fly epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.
15) It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.
