Warren Buffett celebrated his 88th birthday yesterday.
The Oracle of Omaha is widely regarded as the best investor of our generation. His track record is awe-inspiring, but Buffett may be best loved for his ability in presenting investing ideas in the simplest terms. He makes investing accessible — something that we at The Motley Fool Singapore hold dear in our hearts.
With this in mind, I passed the hat around our Foolish writers to collect their favourite Buffett quotes. Given Buffett’s stature, his quotes are presented with minimal context. Onward.
On being knowledgeable on your investments
“Risk comes from not knowing what you’re doing.”
On finding simple investments
“I don’t look to jump over 7-foot bars, I look for 1-foot bars I can step over.”
It’s not about smarts alone
“Smart doesn’t always equal rational. To be a successful investor you must divorce yourself from the fears and greed of the people around you, although it is almost impossible.”
On thinking long-term
“Someone’s sitting in the shade today because someone planted a tree a long time ago.”
On thinking long-term, again
“Our favourite holding period is forever.”
Just in case you missed it, think long-term
“I made my first investment at age eleven. I was wasting my life up until then”
From Buffett’s 1994 Annual Letter to Shareholders: uncertainty will certainly happen
“We will continue to ignore political and economic forecasts, which are an expensive distraction for many investors and businessmen. Thirty years ago, no one could have foreseen the huge expansion of the Vietnam War, wage and price controls, two oil shocks, the resignation of a president, the dissolution of the Soviet Union, a one-day drop in the Dow of 508 points, or treasury bill yields fluctuating between 2.8% and 17.4%.”
The final exam from Buffett’s 1997 Annual Letter to Shareholders:
“A short quiz: If you plan to eat hamburgers throughout your life and are not a cattle producer, should you wish for higher or lower prices for beef? Likewise, if you are going to buy a car from time to time but are not an auto manufacturer, should you prefer higher or lower car prices? These questions, of course, answer themselves.”
But now for the final exam: If you expect to be a net saver during the next five years, should you hope for a higher or lower stock market during that period? Many investors get this one wrong. Even though they are going to be net buyers of stocks for many years to come, they are elated when stock prices rise and depressed when they fall. In effect, they rejoice because prices have risen for the “hamburgers” they will soon be buying. This reaction makes no sense. Only those who will be sellers of equities in the near future should be happy at seeing stocks rise. Prospective purchasers should much prefer sinking prices.”
Happy birthday and thank you, Mr Buffett.
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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 writer Chin Hui Leong does not own any of the shares mentioned.