I have been listening and collecting quotes which Warren Buffett and Charlie Munger had said in interviews as they give you greater understanding of business and life on how it should be handled but thing is i didn't know there was a book with some of his best quotes.
Below quotes are from book The TAO of Warren Buffett by Mary Buffett and David Clark. I recommend to buy the book to refer and audiobook to listen as well.
Hearst family made their money in publishing, the Walton family in retailing (WalMart), the Wrigley family in chewing gum, the Mars family in candy, the Gates family in software, and the Coors and Busch families in brewing.
The key to Warren’s success is that he has been able to identify exactly what the economic characteristics of a wonderful business are—a business that has a durable competitive advantage that owns a piece of the consumer’s mind. Warren has learned that sometimes the shortsighted nature of the stock market grossly undervalues these wonderful businesses, and when it does he steps up to the plate and buys as many shares as he can.
once you sign, the deal is done. Imagine all the things that could go wrong because they often do go wrong. So do all your thinking before you sign. This is easier said than done.
Warren forgot to put a non-compete clause in his contract with eighty-nine-year-old Rose Blumkin when he bought her Omaha based Nebraska Furniture Mart. A few years later Mrs. B. got angry at the way things were being done at the store, so she quit and started up a new store across the street—stealing tons of business from NFM. After a few years of suffering the stiff competition, Warren caved in and agreed to buy her new store for a cool $5 million. The second time around he had her sign a non-compete agreement, and it is lucky for him that he did since she continued on in the business until she was 103.
Happiness does not buy you money.
It takes twenty years to build a reputation and five minutes to lose it. If you think about that, you will do things differently.
The stock market is there to make you rich if you know what you are doing. But if you don’t know what you are doing, it will show no mercy in making you poor.
In 1969, WB thought market was overpriced and he got out of stock market completely. By 1973–74 the stock market had completely reversed it’self and stocks were selling at bargain prices. Warren bought them up with the appetite of, as he said, “a sex-starved man in the middle of a harem filled with beautiful women.”
This quote is by Bertrand Russell.
Cost-cutting/cost-containment, cutting off unnecessary expenses should be part of BAU in a business not during the crisis.
Benjamin Graham inspired investment strategy of buying bargain stocks that were selling below Book Value worked between 1950s to 1960s but it didn't work after 60s but Warren continued to stay with that strategy for a decade as it had become a habit which is hard to change. Later he woke up in the late 1970s to the fact that the Graham bargain ride was over, he shifted over to a strategy of buying exceptional businesses at reasonable prices and then holding them for long periods. With old strategy he made millions with new strategy he made billions.
Marrying for money is probably a bad idea under any circumstances, but it is absolutely nuts if you are already rich.
it’s not necessary to do extraordinary things to get extraordinary results
Long term value of the company has a way of rectifying the situation no matter which direction.
For stock price to improve business must do well and to do well it will help immensely if it was a great business to begin with Washington post, coke, Disney, American Express, general foods, Wells Fargo and GEICO were all companies that had excellent economics working in their favor at the time warren bought them. But stock prices did suffer from either one-time solvable problem or industry recession or bear market eventually with these companies long term economics they possessed caused stock market to revalue their stock prices upward.
This is the big secret in warrens buy and hold forever strategy
If you buy a business that requires lots of capital to grow your stock is never going to grow in value, reason is constant drain of capital just to keep the business from sinking in the wake of competition. If you are spending billions in redesigning that can't be spent on expanding operation, buying new businesses or buying back stock. Eg-GM or Intel
Business that can grow without new infusion of capital can afford to spend it’s excess cash doing those things all of these will increase company per share earnings which will inturn cause share price to increase. Eg-Wrigleys and Coke
Beginning investors, buy stocks they lost money on thinking their luck will change, just like in the casino.
In stocks risk is based largely on two factors
If it wasn’t for mentor Benjamin Graham in developing the Value Investing concept, warren would have been a normal business man.
It’s easy to become brilliant at what you do, when you stand on the shoulders of giant. Trick is picking the right giant. In warrens case, he chose Graham, the dean of Wall Street.
Time to get vaccinations is not the day after you contract the diseases.
Warren believes in proactive management fixing the potential problem before it becomes a problem, you keep costs low from the start which keeps more powder dry for an attack from your competitors and creates more profit’s when things are good.
If you read a company is instigating a cost cutting program then you know the management has been slacking in keeping costs low from the start. What do you think of a company that doesn't have grip on costs ? Do you think t hey are going to make their shareholders a lot of money
There comes a time when you ought to start doing what you want. Take a job that you love. You will jump out of bed in the morning. I think you are out of your mind if you keep taking jobs that you don't like because you think it will look good on your resume, isn't that like saving up sex for old age.
A friend of mine spent 20 years looking for the perfect woman unfortunately when he found her he discovered that she was looking for the perfect man.
Wall street makes it money on activity, you make your money on inactivity.
Why not invest your assets in the companies you really like as May West said too much of a good thing can be wonderful
If you let yourself be undisciplined on the small things you will probably be undisciplined on large things as well.
There is nothing like writing to force you to think and get your thoughts straight.
Imagine that you had a car and that was the only car you'd have for your entire lifetime. Of course, you'd care for it well, changing the oil more frequently than necessary, driving carefully, etc. Now, consider that you only have one mind and one body. Prepare them for life, care for them. ou can enhance your mind over time. A person’s main asset is themselves, so preserve and enhance yourself.
I buy expensive suit’s they just look cheap on me.
A stock doesn't know that you own it
When you combine ignorance and borrowed money the consequences can get interesting
We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful. Remember when the prices are in the sky it’s time to say goodbye but when prices fall it’s time to give your broker a call.
The most important thing to do if you find yourself in a hole is to stop digging. If you find you're in a bad investment, stop throwing money at it. Though it's painful to pull out, in the end it is far more profitable
We do not have, never have had and never will have an opinion about where the stock market interest rates or business activity will be a year from now
Of the billionaires I have known, money just brings out the basic traits in them. If they were jerks before they had money, they are simply jerks with a billion dollars