“What we learn from history is that people don’t learn from history.”
“Two super-contagious diseases, fear and greed, will forever occur in the investment community. The timing of these epidemics will be unpredictable. … We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.” This is the simple recipe for being a contrarian investor.
“Price is what you pay. Value is what you get.”
“No matter how great the talent or efforts, some things just take time. You can’t produce a baby in one month by getting nine women pregnant.”
“Our favorite holding period is forever.” This is buy-and-hold investing, pure and simple.
“I don’t look to jump over seven-foot bars: I look around for one-foot bars that I can step over.” In my own view, index funds are the ultimate one-foot bar.
“Risk comes from not knowing what you’re doing.”
“Diversification is a protection against ignorance.” I think he’s right on target here, and we all need this protection. We cannot possibly understand all the moving parts of the global economy and the myriad of investment choices available to us.
“Only when the tide goes out do you discover who’s been swimming naked.” In a bull market, everybody’s a genius. But a bear market reveals who’s got what it takes to achieve long-term success — and who doesn’t.
“Never invest in a business you cannot understand.” This is a good reason not to invest in individual stocks. I find it virtually impossible to understand the intricacies of any single company or a single industry. I can, however, understand an asset class with nearly 90 years of historical data. And I can invest in an index fund that captures that asset class.
“What counts for most people in investing is not how much they know, but rather how realistically they define what they don’t know.” Unfortunately, know-it-alls tend to place big financial bets. Failing to learn from their own history (see above), they keep doing so again and again.
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 far better to buy a wonderful company at a fair price than a fair company at a wonderful price.
Someone’s sitting in the shade today because someone planted a tree a long time ago.
Risk comes from not knowing what you’re doing.
You only have to do a very few things right in your life so long as you don’t do too many things wrong.
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.
We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.
Rule No.1: Never lose money. Rule No.2: Never forget rule No.1.
In the business world, the rearview mirror is always clearer than the windshield.