The Essays of Warren Buffett Quotes

“So 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. (As they say in golf matches: “Every putt makes someone happy.”)”
― Warren Buffett, The Essays of Warren Buffett: Lessons for Corporate America

“A horse that can count to ten is a remarkable horse—not a remarkable mathematician.”
― Warren Buffett, The Essays of Warren Buffett: Lessons for Corporate America

“When a person with money meets a person with experience, the one with experience ends up with the money and the one with money leaves with experience.”
― Warren Buffett, The Essays of Warren Buffett : Lessons for Corporate America

“calling someone who trades actively in the market an investor “is like calling someone who repeatedly engages in one-night stands a romantic.”
― Warren Buffett, The Essays of Warren Buffett: Lessons for Corporate America

“(Thomas J. Watson Sr. of IBM followed the same rule: “I’m no genius,” he said. “I’m smart in spots—but I stay around those spots.”)”
― Warren Buffett, The Essays of Warren Buffett: Lessons for Corporate America

“Having firstrate people on the team is more important than designing hierarchies and clarifying who reports to whom”
― Warren Buffett, The Essays of Warren Buffett: Lessons for Corporate America

“I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful”
― Warren Buffett, The Essays of Warren Buffett : Lessons for Corporate America

“as happens in Wall Street all too often, what the wise do in the beginning, fools do in the end.”
― Warren Buffett, The Essays of Warren Buffett: Lessons for Corporate America

“It is better to be approximately right than precisely wrong.”
― Warren Buffett, The Essays of Warren Buffett : Lessons for Corporate America

“ABCs of business decay, which are arrogance, bureaucracy and complacency.”
― Warren Buffett, The Essays of Warren Buffett : Lessons for Corporate America

“If you can't tell whose side someone is on, they are not on yours.”
― Warren Buffett, The Essays of Warren Buffett : Lessons for Corporate America

“It is madness to risk losing what you need in pursuing what you simply desire.”
― Warren Buffett, The Essays of Warren Buffett : Lessons for Corporate America

“thought then that decent, intelligent, and experienced managers would automatically make rational business decisions. But I learned over time that isn’t so. Instead, rationality frequently wilts when the institutional imperative comes into play. For example: (1) As if governed by Newton’s First Law of Motion, an institution will resist any change in its current direction; (2) Just as work expands to fill available time, corporate projects or acquisitions will materialize to soak up available funds; (3) Any business craving of the leader, however foolish, will be quickly supported by detailed rate-of-return and strategic studies prepared by his troops; and (4) The behavior of peer companies, whether they are expanding, acquiring, setting executive compensation or whatever, will be mindlessly imitated.”
― Warren Buffett, The Essays of Warren Buffett: Lessons for Corporate America

“If you aren't willing to own a stock for ten years, don't even think about owning it for ten minutes.”
― Warren Buffett, The Essays of Warren Buffett : Lessons for Corporate America

“We are suspicious of those CEOs who regularly claim they do know the future—and we become downright incredulous if they consistently reach their declared targets. Managers that always promise to “make the numbers” will at some point be tempted to make up the numbers.”
― Warren Buffett, The Essays of Warren Buffett : Lessons for Corporate America

“I would rather be certain of a good result than hopeful of a great one.”
― Warren Buffett, The Essays of Warren Buffett : Lessons for Corporate America

“For investors as a whole, returns decrease as motion increases.”
― Warren Buffett, The Essays of Warren Buffett : Lessons for Corporate America

“For Buffett, managers are stewards of shareholder capital. The best managers think like owners in making business decisions.”
― Warren Buffett, The Essays of Warren Buffett: Lessons for Corporate America

“What counts for most people in investing is not how much they know, but rather how realistically they define what they don't know.”
― Lawrence A. Cunningham, The Essays of Warren Buffett: Lessons for Corporate America

“A good business is not always a good purchase - although it's a good place to look for one.”
― Warren Buffett, The Essays of Warren Buffett : Lessons for Corporate America

“Furthermore, we do not think so-called EBITDA (earnings before interest, taxes, depreciation and amortization) is a meaningful measure of performance. Managements that dismiss the importance of depreciation - and emphasize "cash flow" or EBITDA - are apt to make faulty decisions, and you should keep that in mind as you make your own investment decisions,”
― Warren Buffett, The Essays of Warren Buffett : Lessons for Corporate America

“Cash, though, is to a business as oxygen is to an individual: never thought about when it is present, the only thing in mind when it is absent.”
― Warren Buffett, The Essays of Warren Buffett : Lessons for Corporate America

“Financial staying power requires a company to maintain three strengths under all circumstances: (1) a large and reliable stream of earnings; (2) massive liquid assets; and (3) no significant near-term cash requirements. Ignoring that last necessity is what usually leads companies to experience unexpected problems.”
― Warren Buffett, The Essays of Warren Buffett : Lessons for Corporate America

“The requisites for board membership should be business savvy, interest in the job, and owner-orientation.”
― Warren Buffett, The Essays of Warren Buffett: Lessons for Corporate America

“Loss of focus is what most worries Charlie and me when we contemplate investing in businesses that in general look outstanding. All too often, we’ve seen value stagnate in the presence of hubris or of boredom that caused the attention of managers to wander.”
― Warren Buffett, The Essays of Warren Buffett: Lessons for Corporate America

“If the widget company consistently earned a superior return on capital throughout the period, or if capital employed only doubled during the CEO’s reign, the praise for him may be well deserved. But if return on capital was lackluster and capital employed increased in pace with earnings, applause should be withheld. A savings account in which interest was reinvested would achieve the same year-by-year increase in earnings—and, at only 8% interest, would quadruple its annual earnings in 18 years. The power of this simple math is often ignored by companies to the detriment of their shareholders. Many corporate compensation plans reward managers handsomely for earnings increases produced solely, or in large part, by retained earnings—i.e., earnings withheld from owners. For example, ten-year, fixed-price stock options are granted routinely, often by companies whose dividends are only a small percentage of earnings. An example will illustrate the inequities possible under such circumstances. Let’s suppose that you had a $100,000 savings account earning 8% interest and “managed” by a trustee who could decide each year what portion of the interest you were to be paid in cash. Interest not paid out would be “retained earnings” added to the savings account to compound. And let’s suppose that your trustee, in his superior wisdom, set the “pay-out ratio” at one-quarter of the annual earnings.”
― Lawrence A. Cunningham, The Essays of Warren Buffett: Lessons for Corporate America

“David Ogilvy: “If each of us hires people who are smaller than we are, we shall become a company of dwarfs. But, if each of us hires people who are bigger than we are, we shall become a company of giants.”
― Lawrence A. Cunningham, The Essays of Warren Buffett: Lessons for Corporate America

“Regardless of the impact upon immediately reportable earnings, we would rather buy 10% of Wonderful Business T at X per share than 100% of T at 2x per share. Most corporate managers prefer just the reverse.”
― Warren Buffett, The Essays of Warren Buffett : Lessons for Corporate America

“If options aren't a form of compensation, what are they? If compensation isn't an expense, what is it? And, if expenses shouldn't go into the calculation of earnings, where in the world should they go?”
― Warren Buffett, The Essays of Warren Buffett : Lessons for Corporate America

“[I]magine that a 25-year-old first-year MBA student is considering merging his future economic interests with those of a 25-year-old day laborer. The MBA student, a non-earner, would find that a “share-for-share” merger of his equity interest in himself with that of the day laborer would enhance his near-term earnings (in a big way!). But what could be sillier for the student than a deal of this kind?”
― Warren Buffett, The Essays of Warren Buffett : Lessons for Corporate America