Dancing in and out of securities (stocks)

"If you feel you can dance in and out of securities (stocks) in a way that defeats the inflation tax, I would like to be your broker, but not your partner"
[Warren Buffett in Warren Buffett Speaks by Janet Lowe]

Never have an opinion on the market

“Charlie and I never have an opinion on the market because it wouldn’t be any good and it might interfere with the opinions we have that are good.”
[Warren Buffett in Berkshire Hathaway's 1994 Annual Meeting]

On Diversification

"The strategy we've adopted precludes our following standard diversification dogma. Many pundits would therefore say the strategy must be riskier than that employed by more conventional investors. We disagree. We believe that a policy of portfolio concentration may well decrease risk if it raises, as it should, both the intensity with which an investor thinks about a business and the comfort-level he must feel with its economic characteristics before buying into it."

[Warren Buffett in Berkshire Hathaway's 1993 Annual Report]

The stock market is a no-called-strike game

"The stock market is a no-called-strike game. You don't have to swing at everything--you can wait for your pitch. The problem when you're a money manager is that your fans keep yelling, 'Swing, you bum!'"

[Warren Buffett in Berkshire Hathaway's 1998 Annual Meeting]

We don't get paid for activity

"We don't get paid for activity, just for being right. As to how long we'll wait, we'll wait indefinitely."

[Warren Buffett in Berkshire Hathaway's 1998 Annual Meeting]

If you expect to be a net saver during the next 5 years....

"If you expect to be a net saver during the next 5 years, should you hope for a higher or lower stock market during that period?"Many investors get this one wrong. Even though they are going to be net buyers of stocks for many years to come, they are elated when stock prices rise and depressed when they fall."This reaction makes no sense. Only those who will be sellers of equities in the near future should be happy at seeing stocks rise. Prospective purchasers should much prefer sinking prices."

[Warren Buffett in Berkshire Hathaway's 1997 Annual Report]

Benjamin Graham's Mr. Market allegory may seem out-of-date

"Ben's Mr. Market allegory may seem out-of-date in today's investment world, in which most professionals and academicians talk of efficient markets, dynamic hedging and betas. Their interest in such matters is understandable, since techniques shrouded in mystery clearly have value to the purveyor of investment advice. After all, what witch doctor has ever achieved fame and fortune by simply advising 'Take two aspirins'? "

[Warren Buffett in Berkshire Hathaway's 1987 Annual Report]

Time is the enemy of a poor business and the friend of a great business

"Time is the enemy of the poor business and the friend of the great business. If you have a business that's earning 20%-25% on equity, time is your friend. But time is your enemy if your money is in a low return business."

[Warren Buffett in Berkshire Hathaway's 1998 Annual Meeting]

Success in investing doesn't correlate with IQ

"Success in investing doesn't correlate with I.Q. once you're above the level of 125. Once you have ordinary intelligence, what you need is the temperament to control the urges that get other people into trouble in investing."

[Warren Buffett in BusinessWeek Interview June 25 1999]

The most common cause of low prices

"The most common cause of low prices is pessimism - some times pervasive, some times specific to a company or industry. We want to do business in such an environment, not because we like pessimism but because we like the prices it produces. It's optimism that is the enemy of the rational buyer."

[Warren Buffett in Berkshire Hathaway's 1990 Annual Report]

One must avoid the error of the preening duck that quacks boastfully after a torrential rainstorm

"In a bull market, one must avoid the error of the preening duck that quacks boastfully after a torrential rainstorm, thinking that its paddling skills have caused it to rise in the world. A right-thinking duck would instead compare its position after the downpour to that of the other ducks on the pond."

[Berkshire Hathaway Annual Report 1997]

Warren Buffett mentioning about succession planning in an envelope

"When they open that envelope, the first instruction is to take my pulse again."

[Warren Buffett in Berkshire Hathaway's 2001 Annual Meeting after mentioning that the instructions of his succession are sealed in an envelope at headquarters.]

Staying within circle of competence

"There are all kinds of businesses that Charlie and I don't understand, but that doesn't cause us to stay up at night. It just means we go on to the next one, and that's what the individual investor should do."

[Warren Buffett in Morningstar Interview]

Keep playing

"The important thing is to keep playing, to play against weak opponents and to play for big stakes"

[Warren Buffett talking with students at Gaston Hall in November 2002]

I like to shoot fish in a barrel

"I like to go for cinches. I like to shoot fish in a barrel. But I like to do it after the water has run out."

[Warren Buffett talking with Wharton MBA students in October 2003]

Investor vs Speculator

"If you're an investor, you're looking on what the asset is going to do, if you're a speculator, you're commonly focusing on what the price of the object is going to do, and that's not our game."

[Warren Buffett in Berkshire Hathaway 1998 Annual Meeting]

Making purchases in an overheated market

"Investors making purchases in an overheated market need to recognize that it may often take an extended period for the value of even an outstanding company to catch up with the price they paid."

[Warren Buffett in Berkshire Hathaway 1998 Annual Meeting]

Never count on making a good sale

"Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good results."

[Warren Buffett in Berkshire Hathaway's 1974 Annual Report]

About Gold

"[Gold] gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head"

[Warren Buffett in Harvard 1998]

Start early

"Someone's sitting in the shade today because someone planted a tree a long time ago."

[Warren Buffett in The Real Warren Buffett : Managing Capital, Leading People (2002) by James O'Loughlin]