3 Investing Quotes from Warren Buffett You Can Apply Immediately

Avid Foolish readers may have heard that Warren Buffett hosted the annual general meeting for Berkshire Hathaway Inc. over the weekend.

It is estimated that more than 40,000 people descended into the town of Omaha, Nebraska to listen to the Oracle of Omaha speak. One of these 40,000 people is our fellow Singapore Fool Stanley. He attended the meeting and has been sharing his outtakes here and here. 

With the annual general meeting now past us, let’s take a quick look back at three Buffett quotes that you may use immediately in investing:

It would best for Foolish investors if they can leave their ego at the door as they head out to invest. Greed, after all, may be the biggest investing sin of all.

Whenever we are attracted to a big potential payoff, we may want to pause and think about the probability of actually obtaining the payoff. Case to point: the grand prize for Singapore’s TOTO Jackpot may offer millions of dollars, but the odds of winning is an equally daunting 13,983,816 to one.

Instead, on a 20-year rolling basis from 1988 to 2013, the Straits Time Index (SGX: ^STI) has yet to turn in any negative returns. I know where I would rather put my money.

Similarly, investing is not only about making the intelligent investing decisions. Its also about making investing decisions in the face of uncertainty, and noise from the financial media. 

Take a look at the graph below from my fellow Fool Ser Jing. It shows the number of days in each calendar year from 1988 to 2014 in which the STI had gained or lost 1% or more:

Chart of Straits Times Index's volatility

Source: S&P Capital IQ

Said another way, the Singapore stock market can be considered inherently volatile.

And yet, volatility and uncertainty may provide us with opportunities in the form of lower share prices. Or as my fellow Fool David Kuo would put it:

“Economic worries could quite easily unsettle markets. But if you are prepared, it can’t hurt you. It could even benefit you. Stock market declines can be good opportunities to pick up bargains left behind by investors who are ill prepared.”

The future, as Buffett reminds us, is inherently unpredictable.

For instance, while smartphones can be considered a staple mobile device in Singapore today, the iconic iPhone by Apple Inc was only introduced in the year 2007 – less than eight years ago. In ten years time, there may be more changes to come. Some of it may be beyond our imagination.

As a Foolish investor, this bring us to the concept of margin of safety.

It is up to us to demand a margin of safety for all our investments to cater for things which we do not know. The margin may be adjusted according to our own knowledge and familiarity of the company and its industry.

Foolish takeway

Finally, on the lighter side, Buffett had one more quote to make:

So, have fun while you invest. The many benefits of investing may surprise you in more way than you expect.

If you want to learn more about Warren Buffett and to keep up to date on the latest financial and stock market news, sign up for a FREE subscription to The Motley Fool's weekly investing newsletter, Take Stock Singapore

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong owns shares in Berkshire Hathaway Inc and Apple Inc.