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Quotes by Warren Buffett

The following quotes by Warren Buffett are the most important quotes that best describe his thinking about many different areas of life.

Never Losing Money

“‘Never lose money’ is an unyielding standard; it forecloses the option of taking any speculative risks.”

Commentary: This is why Buffett has so outdistanced investors who earn impressive returns in many years but who, on occasion, succumb to speculation and suffer punishing losses. The effect of even an occasional severe loss on cumulative returns is devastating.

Do not try to predict the market

“We have no idea – and never have had – whether the market is going to go up, down, or sideways in the near- or intermediate term future.”

Commentary: Warren Buffett does not try to predict the market. He understands that the market is unpredictable and does not try to outsmart it. Instead, he buys when the company is sufficiently undervalued – that is, it has a strong margin of safety. To paraphrase one of his most commonly cited quotes, he is particularly cautious when others are euphoric; and euphoric when others are cautious.

Price Purchases

“We try to price, rather than time, purchases. In our view, it is folly to forego buying shares in an outstanding business whose long-term future is predictable, because of short-term worries about an economy or a stock market that we know to be unpredictable.”

Commentary: Like the previous quote, trying to time purchases is a greater fool’s game. No one can time the market, and those who pretend they can and stake big fortunes on this mysterious ability will eventually get swept away. A smarter approach is to stick to what you actually know and not to deviate from that iron discipline.

Read, read, read (*favorite Warren Buffett Quote)

“By the age of 10, I read every book in the Omaha Public Library with the word finance in the title, some twice.”

Commentary: Read everything you can. As this Warren Buffett quote suggests, a big reason for the success of Warren Buffett is the incredible amount of knowledge he has in his head. Most people chug along with only what they have learned from college; the people who have attained great success are continuous learners – they do not stop when they graduate from college.

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