92 Investing Lessons from Warren Buffett

92 Investing Lessons from Warren Buffett

Warren Buffett turns 92 today! The super-investor from Omaha has achieved quite the investment record at Buffett Partnership and Berkshire Hathaway. He needs no introduction.

I compiled a list with 92 investing lessons I learned from him:

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

2. “Remember that the stock market is a manic depressive.”

3. “The most important thing to do if you find yourself in a hole is to stop digging.”

4. “Price is what you pay. Value is what you get.”

5. “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.”

6. “Beware the investment activity that produces applause; the great moves are usually greeted by yawns.”

7. “For the investor, a too-high purchase price for the stock of an excellent company can undo the effects of a subsequent decade of favorable business developments.”

8. “Risk comes from not knowing what you are doing.”

9. “Never invest in a business you cannot understand.”

10. “If returns are going to be 7 or 8 percent and you’re paying 1 percent for fees, that makes an enormous difference in how much money you’re going to have in retirement.”

11. “In the business world, the rearview mirror is always clearer than the windshield.”

12. “Time is the friend of the wonderful company, the enemy of the mediocre.”

13. “The three most important words in investing are margin of safety.”

14. “It’s far better to buy a wonderful company at a fair price, than a fair company at a wonderful price.”

15. “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.”

16. “On the margin of safety, which means, don’t try and drive a 9,800-pound truck over a bridge that says it’s, you know, capacity: 10,000 pounds. But go down the road a little bit and find one that says, capacity: 15,000 pounds.”

17. “If a business does well, the stock eventually follows.”18. “Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”19. “For the investor, a too-high purchase price for the stock of an excellent company can undo the effects of a subsequent decade of favorable business developments.”20. All there is to investing is picking good stocks at good times and staying with them as long as they remain good companies21. I never attempt to make money on the stock market. I buy on the assumption that they’d close the market the next day and not reopen it for 10 years22. “It is a terrible mistake for investors with long-term horizons — among them pension funds, college endowments, and savings-minded individuals — to measure their investment ‘risk’ by their portfolio’s ratio of bonds to stocks.”23. 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 1 month by getting nine women pregnant24 The stock market is designed to transfer money from the active to the patient25. “Calling someone who trades actively in the market an investor is like calling someone who repeatedly engages in one-night stands a romantic.”26. “If you aren’t thinking about owning a stock for 10 years, don’t even think about owning it for 10 minutes.”27. “Our favorite holding period is forever.”28. “An investor should act as though he had a lifetime decision card with just twenty punches on it.”29. “Do not take yearly results too seriously. Instead, focus on four or five-year averages.”30. “Time is the friend of the wonderful company, the enemy of the mediocre.”31. “Why not invest your assets in the companies you really like? As Mae West said, ‘Too much of a good thing can be wonderful.’”32. “The business schools reward difficult complex behavior more than simple behavior, but simple behavior is more effective.”33. “There seems to be some perverse human characteristic that likes to make easy things difficult.”34. “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.”35. “Success in investing doesn’t correlate with IQ … what you need is the temperament to control the urges that get other people into trouble in investing.”36. “The stock market is a no-called-strike game. You don’t have to swing at everything — you can wait […]

source 92 Investing Lessons from Warren Buffett

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