Warren Buffett's Ground Rules: Words of Wisdom from the Partnership Letters of the World's Greatest Investor

by Jeremy C. Miller

The market can and will at times be completely deranged and irrational in the short term, but over the long term it will price securities in line with their underlying intrinsic values.

Investors, as we’ll come to define the term, buy businesses; speculators “play” markets.

“In the short term, the market is like a voting machine, but in the long term, it’s more like a weighing machine.”

It’s a mathematical certainty that a company’s shares, in aggregate and over the entire span of the corporation’s lifetime, must produce a return exactly in line with the results of the company’s business.