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Sunday, 9 June 2013

My Favourite Warren Buffett Quotes

"Your goal as an investor should be simply to purchase, at a rational price, a part interest in an easily understood business whose earnings are virtually certain to be materially higher, five, ten, and twenty years from now. Over time, you will find only a few companies that meet those standards - so when you see one that qualifies, you should buy a meaningful amount of stock."

"The basic ideas of investing are to look at stocks as businesses, use market fluctuations to your advantage, and seek a margin of safety. That's what Ben Graham taught us. A hundred years from now they will still be the cornerstones of investing."

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

"All we want is to be in businesses that we understand, run by people whom we like, and priced attractively relative to their future prospects."

"It makes no sense to invest in a company or an industry you don't understand, because you won't be able to figure out what it's worth or to track what it's doing."

"I buy businesses, not stocks, businesses I would be willing to own forever."

"I want to be in businesses so good that even a dummy can make money."

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

"Investment success is not a matter of how much you know but how realistically you define what you don't know."

"It can be more profitable to expend energy purchasing good businesses at reasonable prices than difficult businesses at cheaper prices."

Warren Buffet defines a franchise as a company whose product or service (1) is needed or desired, (2) has no close substitute, and (3) is not regulated.

"The key to investing is determining the competitive advantage of any given company and, above all, the durability of that advantage."

"Look for the durability of the franchise. The most important thing to me is figuring out how big a moat there is around the business. What I love, of course, is a big castle and a big moat with piranhas and crocodiles."

"What needs to be reported is data - whether GAAP, non-GAAP, extra GAAP - that helps the financially literate readers answer three key questions : (1) Approximately how much is this company worth? (2) What is the likelihood that it can meet its future obligations? and (3) How good a job are its managers doing, given the hands they have been dealt?"

"In evaluating people, you look for three qualities: integrity, intelligence, and energy. If you don't have the first, the other two will kill you"

"I read annual reports of the company I'm looking at and I read the annual reports of the competitors. That's the main source material."

"If you can't understand them, don't assume it's your shortcoming; it's a favored tool for hiding something management doesn't want you to know." - Warren Buffett on unintelligible footnotes of annual report.

"Be suspicious of companies that trumpet earnings projections and growth expectations."

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