I have this complicated procedure I go through every morning, which is to look in the mirror and decide what I'm going to do. And I feel at that point, everybody's had their say.
A low-cost index fund is the most sensible equity investment for the great majority of investors. My mentor, Ben Graham, took this position many years ago, and everything I have seen since convinces me of its truth.
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.
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.
If you understood a business perfectly and the future of the business, you would need very little in the way of a margin of safety. So, the more vulnerable the business is, assuming you still want to invest in it, the larger margin of safety you'd need. If you're driving a truck across a bridge that says it holds 10,000 pounds and you've got a 9,800 pound vehicle, if the bridge is 6 inches above the crevice it covers, you may feel okay, but if it's over the Grand Canyon, you may feel you want a little larger margin of safety.
It's a nightmare to administer some of this sort of thing, but I want to tell the shareholders of Berkshire, to the percent we own marketable securities or things for which there are market, even if those markets - I want to tell them what it's all about.
The greatest investment a young person can make is in their own education, in their own mind. Because money comes and goes. Relationships come and go. But what you learn once stays with you forever.
As an investor with small capital, one should prefer businesses that have high returns on capital and that require little incremental investment to grow.
Consciously paying more for a stock than its calculated value - in the hope that it can soon be sold for a still-higher price - should be labelled speculation
I understand Goldman Sachs businesses. We do lot of business with him, and GE has been - I think it's the longest running stock in the Dow Jones industrial average. It will be 100 years now it will be around. I hope I'm around then, too. And it was an attractive investment. And we have had a lot of money around, over the last two years, and we're seeing things that are attractive now.