REUTERS/Rick Wilking

A huge picture of Berkshire Hathaway Chairman Warren Buffett looks overshareholders swarming the exhibit floor where companies owned by Berkshiredisplay and sell their products, at the company's annual meeting in Omaha May 4,2013.

Warren Buffett's 23 Best QuotesAbout Investing

SAM RO MAR. 3, 2014, 4:45 PM

Warren Buffett published his 2013 annual letter to Berkshire Hathaway shareholders onSaturday.

In it, he bulleted six "fundamentals of investing."

Not only is Buffett the most successful investor in history. He also shares his wisdom in anapproachable and entertaining manner.

Vintage Coca Cola ad

We compiled a few of Buffett's best quotes from his TV appearances, newspaper op-eds,magazine interviews, and of course his annual letters.

Investing novices and experts alike can learn from the advice that the he has articulatedthrough the years.

If we've missed any of your favorites, let us know in the comments.

Buying a stock is about more than just the price."It's far better to buy a wonderfulcompany at a fair price than a faircompany at a wonderful price."

Source: Letter to shareholders, 1989

AP Photo

You don't have to be a genius to invest well."You don't need to be a rocketscientist. Investing is not a gamewhere the guy with the 160 IQ beatsthe guy with 130 IQ."

Source: Warren Buffet Speaks, viamsnbc.msn

REUTERS/Jim Young

University of Chicago professor Eugene F. Fama,father of the efficient markets hypothesis.

But, master the basics."To invest successfully, you neednot understand beta, efficientmarkets, modern portfolio theory,option pricing or emerging markets.You may, in fact, be better offknowing nothing of these. That, ofcourse, is not the prevailing view atmost business schools, whosefinance curriculum tends to bedominated by such subjects. In ourview, though, investment studentsneed only two well-taught courses -How to Value a Business, and Howto Think About Market Prices."

Source: Chairman's Letter, 1996

Flickr / Mark Rain

tavopp / Flickr

Don't buy a stock just because everyone hates it."None of this means, however, thata business or stock is an intelligentpurchase simply because it isunpopular; a contrarian approachis just as foolish as a follow-the-crowd strategy. What's required isthinking rather than polling.Unfortunately, Bertrand Russell'sobservation about life in generalapplies with unusual force in thefinancial world: "Most men wouldrather die than think. Many do."

Source: Chairman's Letter, 1990

Bad things aren't obvious when times are good."After all, you only find out who isswimming naked when the tide goesout."

Source: Letter to shareholders, 2001

flickr / Doug Wertman

Reuters

Always be liquid."I have pledged – to you, the ratingagencies and myself – to always runBerkshire with more than amplecash. We never want to count onthe kindness of strangers in orderto meet tomorrow’s obligations.When forced to choose, I will nottrade even a night’s sleep for thechance of extra profits."

Source: Letter to shareholders,2008

The best time to buy a company is when it's in trouble."The best thing that happens to us iswhen a great company gets intotemporary trouble...We want to buythem when they're on theoperating table."

Source: Businessweek, 1999

AP

Stocks have always come out of crises."Over the long term, the stockmarket news will be good. In the20th century, the United Statesendured two world wars and othertraumatic and expensive militaryconflicts; the Depression; a dozen orso recessions and financial panics;oil shocks; a flu epidemic; and theresignation of a disgraced president.Yet the Dow rose from 66 to11,497."

Source: The New York Times,October 16, 2008

Instagram/disneycl

Don't be fooled by that Cinderella feeling you get fromgreat returns."The line separating investment andspeculation, which is never brightand clear, becomes blurred stillfurther when most marketparticipants have recently enjoyedtriumphs. Nothing sedatesrationality like large doses ofeffortless money. After a headyexperience of that kind, normallysensible people drift into behaviorakin to that of Cinderella at theball. They know that overstayingthe festivities ¾ that is, continuingto speculate in companies that havegigantic valuations relative to thecash they are likely to generate inthe future ¾ will eventually bring onpumpkins and mice. But theynevertheless hate to miss a singleminute of what is one helluva party. Therefore, the giddy participants all plan to leave just secondsbefore midnight. There’s a problem, though: They are dancing in a room in which the clocks have nohands."

Source: Letter to shareholders, 2000

Wikimedia Commons

Think long-term."Your goal as an investor shouldsimply be to purchase, at a rationalprice, a part interest in an easily-understandable business whoseearnings are virtually certain to bematerially higher five, ten andtwenty years from now. Over time,you will find only a few companiesthat meet these standards - so whenyou see one that qualifies, youshould buy a meaningful amount ofstock. You must also resist thetemptation to stray from yourguidelines: If you aren't willing toown a stock for ten years, don'teven think about owning it for tenminutes. Put together a portfolio ofcompanies whose aggregateearnings march upward over theyears, and so also will the portfolio'smarket value."

Source: Chairman's Letter, 1996

Wikimedia Commons

Forever is a good holding period."When we own portions ofoutstanding businesses withoutstanding managements, ourfavorite holding period is forever."

Source: Letter to shareholders, 1988

MovieClips / YouTube

Dumb & Dumber

Buy businesses that can be run by idiots."I try to buy stock in businessesthat are so wonderful that an idiotcan run them. Because sooner orlater, one will."

Source: Business Insider

IMDB, Twentieth Century Fox

Gordon Gekko, "Wall Street"

Be greedy when others are fearful."Investors should remember thatexcitement and expenses are theirenemies. And if they insist on tryingto time their participation inequities, they should try to befearful when others are greedyand greedy only when others arefearful."

Source: Letter to shareholders, 2004

@PeterMcEvoy2

You don't have to move at every opportunity."The stock market is a no-called-strike game. You don't have toswing at everything--you can waitfor your pitch. The problem whenyou're a money manager is that yourfans keep yelling, 'Swing, youbum!'"

Source: The Tao of Warren Buffettvia Engineeringnews.com

AP Photo/Horst Faas

Ignore politics and macroeconomics when picking stocks."We will continue to ignore politicaland economic forecasts, which arean expensive distraction for manyinvestors and businessmen. Thirtyyears ago, no one could haveforeseen the huge expansion of theVietnam War, wage and pricecontrols, two oil shocks, theresignation of a president, thedissolution of the Soviet Union, aone-day drop in the Dow of 508points, or treasury bill yieldsfluctuating between 2.8% and17.4%.

"But, surprise - none of theseblockbuster events made theslightest dent in Ben Graham'sinvestment principles. Nor did theyrender unsound the negotiatedpurchases of fine businesses at sensible prices. Imagine the cost to us, then, if we had let a fear ofunknowns cause us to defer or alter the deployment of capital. Indeed, we have usually made our bestpurchases when apprehensions about some macro event were at a peak. Fear is the foe of the faddist,but the friend of the fundamentalist.

Source: Chairman's Letter, 1994

Wikimedia Commons

Isaac Newton

The more you trade, the more you underperform."Long ago, Sir Isaac Newton gaveus three laws of motion, which werethe work of genius. But Sir Isaac’stalents didn’t extend to investing:He lost a bundle in the South SeaBubble, explaining later, “I cancalculate the movement of the stars,but not the madness of men.” If hehad not been traumatized by thisloss, Sir Isaac might well have goneon to discover the Fourth Law ofMotion: For investors as a whole,returns decrease as motionincreases."

Source: Letters to shareholders,2005

REUTERS/Eric Gaillard

Price and value are not the same"Long ago, Ben Graham taught methat 'Price is what you pay; value iswhat you get.' Whether we’retalking about socks or stocks, Ilike buying quality merchandisewhen it is marked down."

Source: Letter to shareholders, 2008

REUTERS/Kai Pfaffenbach

There are no bonus points for complicated investments."Our investments continue to be fewin number and simple in concept:The truly big investment idea canusually be explained in a shortparagraph. We like a business withenduring competitive advantagesthat is run by able and owner-oriented people. When theseattributes exist, and when we canmake purchases at sensible prices, itis hard to go wrong (a challenge weperiodically manage to overcome).

"Investors should remember thattheir scorecard is not computedusing Olympic-diving methods:Degree-of-difficulty doesn’t count.If you are right about a businesswhole value is largely dependenton a single key factor that is botheasy to understand and enduring, the payoff is the same as if you had correctly analyzed aninvestment alternative characterized by many constantly shifting and complex variables."

Source: Chairman's Letter, 1994

REUTERS/James Lawler Duggan

Warren Buffett

A good businessperson makes a good investor."I am a better investor because I ama businessman, and a betterbusinessman because I am noinvestor."

Source: Forbes.com - Thoughts OnThe Business Life

MoneyBlogNewz / Flickr

Wikimedia Commons

Higher taxes aren't a dealbreaker."SUPPOSE that an investor youadmire and trust comes to you withan investment idea. “This is a goodone,” he says enthusiastically. “I’min it, and I think you should be, too.”

Would your reply possibly be this?“Well, it all depends on what my taxrate will be on the gain you’resaying we’re going to make. If thetaxes are too high, I would ratherleave the money in my savingsaccount, earning a quarter of 1percent.” Only in Grover Norquist’simagination does such a responseexist."

Source: New York Times

Companies that don't change can be great investments."Our approach is very muchprofiting from lack of change ratherthan from change. With Wrigleychewing gum, it's the lack ofchange that appeals to me. I don'tthink it is going to be hurt by theInternet. That's the kind of businessI like."

Source: Businessweek, 1999

Flickr/Dadune

YouTube

Time will tell."Time is the friend of the wonderfulbusiness, the enemy of themediocre."

Source: Letters to shareholders 1989

This is the most important thing."Rule No. 1: never lose money; ruleNo. 2: don't forget rule No. 1"

Source: The Tao of Warren Buffett

CarSpotter / Flickr

YouTube / MrNChoudhury

BONUS: On Wall Street advice"Wall Street is the only place thatpeople ride to in a Rolls-Royce toget advice from those who take thesubway."

Source: The Tao of Warren Buffett

For more great quotes...

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