The Warren Buffett Way Quotes

“Your goal as an investor should be simply to purchase, at a rational price, a part interest in an easily understood business whose earnings are virtually certain to be materially higher, five, ten, and twenty years from now. Over time, you will find only a few companies that meet those standards-so when you see one that qualifies, you should buy a meaningful amount of stock.”
― Robert G. Hagstrom, The Warren Buffett Way: Investment Strategies of the World's Greatest Investor

“The size of an investor’s brain is less important than his ability to detach the brain from the emotions.”
― Robert G. Hagstrom, The Warren Buffett Way

“Buffett quoted Keynes: “The difficulty lies not in the new ideas but in escaping from the old ones.” Buffett”
― Robert G. Hagstrom, The Warren Buffett Way

“If the price of a particular stock is going up, we assume good things are happening; if the price starts to go down, we assume something bad is happening, and we act accordingly. It’s a poor mental habit, and it is exacerbated by another: evaluating price performance over very short periods of time. Not only are we depending solely on the wrong thing (price), Buffett would say, but we’re looking at it too often and we’re too quick to jump when we don’t like what we see. This double-barreled foolishness—this price-based, short-term mentality—is a flawed way of thinking, and it shows up at every level in our business. It is what prompts some people to check stock quotes every day, sometimes every hour.”
― Robert G. Hagstrom, The Warren Buffett Way

“Being too far ahead of your time is indistinguishable from being wrong.”
― Robert G. Hagstrom, The Warren Buffett Way

“The market, like the Lord, helps those who help themselves,” Buffett says. “But unlike the Lord, the market does not forgive those who know not what they do.”
― Robert G. Hagstrom, The Warren Buffett Way

“just as work expands to fill available time, corporate projects or acquisitions will materialize to soak up available funds;”
― Robert G. Hagstrom, The Warren Buffett Way

“1. Focus on return on equity, not earnings per share. 2. Calculate “owner earnings” to get a true reflection of value. 3. Look for companies with high profit margins. 4. For every dollar retained, make sure the company has created at least one dollar of market value.”
― Robert G. Hagstrom, The Warren Buffett Way

“Do not approach the market unless you are willing to think about stocks, first and always, as part-ownership interests in businesses. Be prepared to diligently study the businesses you own, as well as the companies you compete against, with the idea that no one will know more about your business than you do. Do not even start a focus portfolio unless you are willing to invest a minimum of five years (10 years would even be better). Never leverage your focus portfolio. An unleveraged focus portfolio will help you reach your goals fast enough. Remember, an unexpected margin call on our capital will likely wreck a well-tuned portfolio. Accept the need to acquire the right temperament and personality to become a focus investor.”
― Robert G. Hagstrom, The Warren Buffett Way

“Legg Mason was a value shop, and its training program emphasized the classic works on value investing, including Benjamin Graham and David Dodd’s Security Analysis and Graham’s The Intelligent Investor. Each day, the firm’s veteran brokers would stop by and share their insights on stocks and the market. They handed us a Value Line Investment Survey of their favorite stock. Each company possessed the same attributes: a low price-to-earnings ratio, a low price-to-book ratio, and a high dividend yield. More often than not, the company was also deeply out of favor with the market, as evidenced by the long period the stock had underperformed the market. Over and over again, we were told to avoid the high-flying popular growth stocks and instead focus on the downtrodden, where the risk-reward ratio was much more favorable.”
― Robert G. Hagstrom, The Warren Buffett Way

“Thinking Fast and Slow.”
― Robert G. Hagstrom, The Warren Buffett Way

“it appears the company has a strong competitive position with a favorable long-term outlook, you would next run several dividend discount models that include different growth rates of the company’s owner earnings over different time periods to get a sense of approximate valuation. Then you would study and understand management’s long-term capital allocation strategy. Last, you might call a few friends, colleagues, or financial advisers to see if they have an opinion about your company or, better yet, your company’s competitors. Take note: None of this requires a high IQ, but it is more laborious and requires more mental effort and concentration than simply figuring out the company’s current price-to-earnings ratio.”
― Robert G. Hagstrom, The Warren Buffett Way

“Worldly wisdom teaches that it is better for reputation to fail conventionally than to succeed unconventionally.”
― Robert G. Hagstrom, The Warren Buffett Way

“Ben Graham gave us the same lesson: “In the short run the market is a voting machine but in the long run it is a weighing machine.”51”
― Robert G. Hagstrom, The Warren Buffett Way