Warren Buffett Quotes

References to EBITDA make us shudder — does management think the tooth fairy pays for capital expenditures?

Losing some money is an inevitable part of investing and there is nothing you can do to prevent it.

How the record has been achieved is crucial, as is the manager’s understanding of — and sensitivity to — risk (which in no way should be measured by beta, the choice of too many academics).

During 1983 our book value increased from $737.43 per share to $975.83 per share, or by 32%. We never take the one-year figure very seriously. After all, why should the time required for a planet to circle the sun synchronize precisely with the time required for business actions to pay off? Instead, we recommend not less than a five-year test as a rough yardstick of economic performance. Red lights should start flashing if the five-year average annual gain falls much below the return on equity earned over the period by American industry in aggregate.

If you are not happy being in the top one tenth of one percent wealthiest people on earth, being in the top one hundreth of one percent isn't going to do anything for you.

When Walter and Edwin were asked in 1989 by Outstanding Investors Digest, “How would you summarize your approach?” Edwin replied, “We try to buy stocks cheap.” So much for Modern Portfolio Theory, technical analysis, macroeconomic thoughts and complex algorithms.

Temperament is also important. Independent thinking, emotional stability, and a keen understanding of both human and institutional behavior is vital to long-term investment success.

The difference between successful people and really successful people is that really successful people say no to almost everything

Predicting the long-term economics of companies that operate in fast-changing industries is simply far beyond our perimeter.

Because we are the largest lender in the manufactured homes sector and are also normally lending to lower-and-middle-income families, you might expect us to suffer heavy losses during a housing meltdown. But by sticking to old-fashioned loan policies — meaningful down payments and monthly payments with a sensible relationship to regular income — Clayton has kept losses to acceptable levels. It has done so even though many of our borrowers have had negative equity for some time.

Diversification may preserve wealth, but concentration builds wealth.

We set no volume goals in our insurance business generally — and certainly not in reinsurance — as virtually any volume can be achieved if profitability standards are ignored.

If you invested in a low-cost index fund — where you don't put the money in at one time, but average in over 10 years — you'll do better than 90% of people who start investing at the same time.

Habits of happy people: 1. Don't show off 2. Talk less 3. Learn daily 4. Help less fortunate 5. Laugh more 6. Ignore nonsense 7. No entitlement.

Accounting numbers, of course, are the language of business and as such are of enormous help to anyone evaluating the worth of a business and tracking its progress. Charlie and I would be lost without these numbers: they invariably are the starting point for us in evaluating our own businesses and those of others. Managers and owners need to remember, however, that accounting is but an aid to business thinking, never a substitute for it.