I have read in a Book that “Buffett’s investment principles are “simple, old and few”. Most of his success came because of his personality, character, and willingness to learn from and teach others. Of his many outstanding qualities, the role as a teacher is the one for which he would most like to be remembered.”
Recently, I have made Warren Buffett my teacher, mentor and guide by reading, re-reading his quotes so that I can implement some bit of it in my life also, especially, in the journey of Financial Market.
Over his lifetime, he has experienced several bear market and has learned how to stay the course and stick to his investing principles, when other investors were selling or rethinking their strategies. Therefore, discipline is an essential element in becoming a successful long term investor. Some of his quotes have helped me become a more disciplined investor. Therefore, sharing some quotes which might help you as well:
1. In the business world, the rearview mirror is always clearer than the windshield.
American business will do just fine over time. And stocks will do well just as certainly, since their fate is tied to business performance. Periodic setbacks will occur, yes, but investors and managers are in a game heavily stacked in their favor. (The Dow Jones Industrials advanced from 66 to 11,497 in the twentieth century, a staggering 17,320% increase that materialized despite four costly wars, a Great Depression, and many recessions. And don’t forget that shareholders received substantial dividends throughout the century as well.)
2. Risk comes from not knowing what you are doing.
3. 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.
4. Rule No. 1: Never lose money.
Rule No. 2: Don’t forget No. 1.
5. I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful.
6. If you buy things you do not need, soon you will have to sell things you need.
7. Before looking at new investments, we consider adding to old ones. If a business is attractive enough to buy once, it may well pay to repeat the process.
8. The ability to say “no” is a tremendous advantage for an investor.
9. If you own See’s Candy, and you look in the mirror and say, “Mirror, mirror on the wall, how much do I charge for candy this fall?” and it says, “More,” that’s a good business.
10. If a business does well, the stock eventually follows.
11. The definition of a great company is one that will be great for 25 or 30 years.
12. Do not take yearly results too seriously. Instead, focus on four-or five-year averages.
13. What the wise do in the beginning, fools do in the end.
14. We always live in an uncertain world. What is certain is that the United States will go forward over time.
15. You can’t make a good deal with a bad person.
16. There are some parts of the game that we don’t understand, so we don’t play with them.
17. When you’re associating with the people that you love, doing what you love, it doesn’t get any better than that.
18. Great investment opportunities come around when excellent companies are surrounded by unusual circumstances that cause the stock to be misappraised.
19. I read annual reports of the company I’m looking at, and I read the annual reports of the competitors—that is the main source of material.
20. All there is to investing is picking good stocks at good times and staying with them as long as they remain good companies.
21. Diversification is a protection against ignorance. It makes very little sense for those who know what they’re doing.
A lot of great fortunes in the world have been made by owning a single wonderful business. If you understand the business, you don’t need to own very many of them.
22. If you are in a poker game and after 20 minutes you don’t know who the patsy is, then you’re the patsy.
23. It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.
24. Smile when you read a headline that says, “Investors lose as market falls.” Edit it in your mind to, “Disinvestors lose as market falls—but investors gain.” Though writers often forget this truism, there is a buyer for every seller and what hurts one necessarily helps the other.
25. I always knew I was going to be rich. I don’t think I ever doubted it for a minute.
26. The market, like the Lord, helps those who help themselves.
If “investors” frenetically bought and sold farmland to each other, neither the yields nor prices of their crops would be increased. The only consequence of such behavior would be decreases in the overall earnings realized by the farm-owning population because of the substantial costs it would occur as it sought advice and switched properties. Nevertheless, both individuals and institutions will constantly be urged to be active by those who profit from giving advice or effecting transactions. The resulting frictional costs can be huge and, for investors in aggregate, devoid of benefit. So ignore the chatter, keep your costs minimal, and invest in stocks as you would in a farm.
27. Beware of geeks bearing formulas.
28. The difference between successful people and very successful people is that very successful people say “no” to almost everything.
29. Do not save what is left after spending, but spend what is left after saving.
30. It’s a mistake paying attention to the day to day fluctuations of a stock —it makes no difference.