Investors hang on every word billionaire investor Warren Buffett utters. It's understandable - he built those billions off the back of many, many shrewd investment decisions.
But it's about more than that. The "Sage of Omaha", aged 87, has a way with words which, together with being a dab-hand at investing, has given him messiah status. Thousands flock to the annual shareholder meetings of his company, Berkshire Hathaway.
We love how he writes and how he speaks. Before we get into the pithy investment quotes, allow us to share his explanation of how he makes investing interesting - with the help of Doris and Bertie...
"When writing Berkshire Hathaway's annual report, I pretend that I'm talking to my sisters. I have no trouble picturing them: though highly intelligent, they are not experts in accounting or finance. They will understand plain English, but jargon may puzzle them. My goal is simply to give them the information I would wish them to supply me if our positions were reversed. To succeed, I don't need to be Shakespeare; I must, though, have a sincere desire to inform.
"No siblings to write to? Borrow mine: Just begin with 'Dear Doris and Bertie'."
Now for the quotes that we think will help make you a better-informed investor.
Buffett on investing
1. The most important quality for an investor is temperament, not intellect. You need a temperament that neither derives great pleasure from being with the crowd or against the crowd.
2. Successful investing takes time, discipline and patience. No matter how great the talent or effort, some things just take time: You can't produce a baby in one month by getting nine women pregnant.
3. The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company and, above all, the durability of that advantage.
4. I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful.
5. I don't look to jump over seven-foot bars; I look around for one-foot bars that I can step over.
6. Only buy something that you'd be perfectly happy to hold if the market shut down for 10 years.
On compound interest, or in other words interest on interest
7. My wealth has come from a combination of living in America, some lucky genes, and compound interest.
On business
8. In the business world, the rear-view mirror is always clearer than the windshield.
9. I am a better investor because I am a businessman, and a better businessman because I am an investor.
On history
10. What we learn from history is that people don't learn from history.
On value investing, investing in stocks trading at prices below their value
11. 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's marked down.
On opportunities
12. Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble.
On careers
13. The important thing is to look for the job you would take if you didn't need a job.
On life
14. You only have to do a very few things right in your life so long as you don't do too many things wrong.
On success
15. I tell college students, when you get to be my age you will be successful if the people who you hope to have love you, do love you.
On love
16. It's a very strange thing, love: you can't get rid of it. If you try to give it out you get more back. If you try to hang on to it, you lose it.
On borrowing
17. I've seen more people fail because of liquor and leverage - leverage being borrowed money. You really don't need leverage in this world much. If you're smart, you're going to make a lot of money without borrowing.
On gender equality
18. The initial example is really my mother. She came from a generation where the main function of the wife was to help her husband in the job. My sisters are fully as smart as I am. They got better personalities. But they got the message a million different ways that their future was limited and I got the message that the sky is the limit and it wasn't due to a lack of love or anything of the sort. It was just the culture. On the flip side of that you could say it's quite encouraging, because if you look at what this country accomplished only using half of its talent, just think of the potential for the future... we, by some rather stupid decisions, essentially put half of our talent on the sidelines.
On luck
19. I was lucky. I was born in the United States. The odds were 30 to 40-to-1 against that. I had some lucky genes. I was born at the right time. If I'd been born thousands of years ago I'd be some animal's lunch because I can't run very fast or climb trees. So there's so much chance in how we enter the world.
On giving to those less fortunate
20. If you're in the luckiest 1% of humanity, you owe it to the rest of humanity to think about the other 99%.
On picking your associates carefully
21. It's better to hang out with people better than you. Pick out associates whose behaviour is better than yours and you'll drift in that direction.
View the original article on MoneyLens. MoneyLens is a website aimed at helping millennials manage their money.
Topics