I finished reading, ìThe Tao of Warren Buffett,î shortly before Christmas.† I loved it.† I actually regret not having read it much earlier.† I take consolation in one of Buffettís more popular advice:† itís never too late to start.† I just hope I have the heart to get started in applying Buffettís investing wisdom not any minute later.
I have taken pains transcribing all the 125 Warren Buffett aphorisms featured in the book.† Posting them here in my blog may be bordering to possible intellectual properly infringement.† Copying and pasting the whole book would have been outright plagiarism.† I hope the bookís authors, and Warren Buffett himself, would not mind me posting this list.† Like other lists I have posted in my blog, it is intended only as a handy reference for me and other people who may have some use for it.† If you want a detailed explanation of each aphorism you have to go buy the book.† I strongly recommend it, and youíll find it very much worth the cost.
Image Model: Lara Marielle
Getting and Staying Rich
- Rule No. 1:† Never lose money.† Rule No. 2:† Never forget Rule No. 1.
- I made my first investment at age eleven.† I was wasting my life up until then.
- Never be afraid to ask for too much when selling or offer to little when buying.
- You canít make a good deal with a bad person.
- The great personal fortunes in this country werenít built on a portfolio of fifty companies.† They were built by someone who identified one wonderful business.
- It is impossible to unsign a contract, so do all your thinking before you sign.
- It is easier to stay out of trouble than it is to get out of trouble.
- You should invest lie a Catholic marries ñ for life.
- Wall Street is the only place that people ride to in a Rolls-Royce to get advice from those who take the subway.
10. Happiness does not buy you money.
11. It takes twenty years to build a reputation and five minutes to lose it.† If you think about that, you will do things differently.
12. The market, like the Lord, helps those who help themselves.† But unlike the Lord, the market does not forgive those who know not what they do.
13. I donít try to jump over seven-foot bars;† I look around for one-foot bars that I can step over.
14. The chains of habit are too light to be felt until they are too heavy to be broken.
15. Marrying for money is probably a bad idea under any circumstances, but it is absolutely nuts if you are already rich.
16. Itís not necessary to do extraordinary things to get extraordinary results.
17. You should look at stocks as small pieces of a business.
18. My idea of a group decision is to look in the mirror.
19. If I canít make money in a $5 trillion US market, it ay be a little bit of wishful thinking to think that all I have to do is get a few thousand miles offshore and Iíll start showing my stuff.
20. You should invest in a business that even a fool can run, because someday a fool will.
21. With each investment you make, you should have the courage and the conviction to place at least 10% of your net worth in that stock.
22. †Money, to some extent, sometimes lets you be in more interesting environments.† But it canít change how many people love you or how healthy you are.
Business
23. Anything that canít go on forever will end.
24. When management with a reputation for brilliance tackles a business with a reputation for poor fundamental economics, it is the reputation of the business that remains intact.
25. Accounting is the language of business.
26. Turnarounds seldom turn.
27. If a business does well, the stock eventually follows.
28. Managing your career is like investing ñ the degree of difficulty does not count.† So you can save yourself money and pain by getting on the right train.
29. The reaction of weak management to weak operations is often weak accounting.
30. There is a huge difference between the business that grows and requires lots of capital to do so and the business that grows and doesnít require capital.
31. In a difficult business, no sooner is one problem solved than another surfaces ñ never is there just one cockroach in the kitchen.
32. You can always juice sales by going down-market but itís hard to go back upmarket.
33. When a chief executive officer is encouraged by his advisers to make deals, he responds much as would a teenage boy who is encouraged by his father to have a normal sex life.† Itís not a push he needs.
34. You donít have to make money back the same way you lost it.
35. I look for businesses in which I think I can predict what theyíre going to look like in ten to fifteen yearsí time.† Take Wrigleyís chewing gum.† I donít think the Internet is going to change how people chew gum.
Warrenís Mentors
36. Someone is sitting in the shade today because someone planted a tree a long time ago.
37. With enough inside information and a million dollars, you can go broke in a year.
38. Read Ben Graham and Phil Fisher, read annual reports, but donít do equations with Greek letters in them.
39. I am a better investor because I am a businessman, and a better businessman because I am an investor.
40. If principles become dated, theyíre no longer principles.
41. You pay a very high price in the stock market for a cheery consensus.
Education
42. If Calculus or Algebra were required to be a great investor, Iíd have to go back to delivering newspapers.
43. You have to think for yourself.† It always amazes me how high-IQ people mindlessly imitate.† I never get good ideas talking to other people.
44. The smarter the journalists are, the better off society is.
45. You want to learn from experience, but you want to learn from other peopleís experience when you can.
The Workplace
46. Itîs hard to teach a young dog old tricks.
47. In looking for someone to hire, look for three qualities: integrity, intelligence, and energy.† But the most important is integrity, because if they donít have that, the two other qualities, intelligence and energy, are going to kill you.
48. Can you really explain to a fish what it is like to walk on land?† One day on land is worth a thousand years talking about it, and one day running a business has exactly the same kind of value.
49. Itís only when the tide goes out that you learn whoís swimming naked.
50. When ideas fail, words come in very handy.
51. The really good business manager does not wake up in the morning and say, ëThis is the day that I am going to cut costs,í any more than he wakes up and decides to practice breathing.
52. Wouldnít it be great if we could buy love for $1 million?† But the only way to be loved is to be lovable.† You always get back more than you give away.† If you donít give any, you wonít get any.† Thereís nobody I know who commands the love others who doesnít feel like a success.† And I canít imagine people arenít loved feel very successful.
53. We enjoy the process far more than the proceeds, though I have learned to live with those also.
54. If you hit a hole in one in every hole, you wouldnít be playing golf for very long.
55. There comes a time when you ought to start doing what you want.† Take a job that you love.† You will jump out of bed every morning.† I think you are out of your mind if you keep taking jobs that you donít like because you think that it will look good in your resume.† Isnít that a little like saving up sex for your old age?
56. A friend of mine spent twenty years looking for the perfect woman; unfortunately, when he found her, he discovered that she was looking for the perfect man.
Analysts, Advisers, Brokers ñ Follies to Avoid
57. Never ask a barber if you need a haircut.
58. Forecasts usually tell us more of the forecaster than of the forecast.
59. A public-opinion poll is no substitute for thought.
60. The business schools reward difficult, complex behavior more than simple behavior, but simple behavior is more effective.
61. There seems to be some perverse human characteristic that likes to make easy things difficult.
62. Recommending something to be held for thirty years is a level of self-sacrifice youíll rarely see in a monastery, let alone a brokerage house.
Why Not to Diversify
63. <to be continued in a future post a week or two from now>
Pingback: Warren Buffett Wisdom – 2nd of 2 parts | A ëWonderfulí Blog