Tuesday, June 23, 2009

Must Read Quotes from Legendary Investor - Warren Buffett

Warren Buffett is the most successful investor of our time. Some of his quotes which are useful are appended below.

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.

If a business does well, the stock eventually follows.

Investors making purchases in an overheated market need to recognize that it may often take an extended period for the value of even an outstanding company to catch up with the price they paid.

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

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.

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

Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it. Long ago, Sir Isaac Newton gave us three laws of motion, which were the work of genius. But Sir Isaac’s talents didn’t extend to investing: He lost a bundle in the South Sea Bubble, explaining later, ‘I can calculate the movement of the stars, but not the madness of men.’ If he had not been traumatized by this loss, Sir Isaac might well have gone on to discover the Fourth Law of Motion: For investors as a whole, returns decrease as motion increases

Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can’t buy what is popular and do well.

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

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

Our favorite holding period is forever.

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

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

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

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.

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