By Wall Street Physician –Lawrence B. Keller CFP,CLU,CHFC,RHU
Warren Buffett is famous not only for his astonishing long-term success as an investor, but for his folksy, down-to-earth personality. He is so quotable, and you can glean a lot of wisdom about personal finance, investing, and just life in general from the “Oracle of Omaha.”
Here are fifteen quotes from Warren Buffett that I really like, taken from various sources, including Motley Fool, The Street, Marketwatch, Business Insider and WikiQuote.
Warren Buffett Quotes On investing
We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.
This is one of Warren Buffett’s best quotes, and he lives by this mantra. He repeated this quote in an editorial in the New York Times during the lowest points of the financial crisis, encouraging investors to buy when most were selling.
Only when the tide goes out do you discover who’s been swimming naked.
This quote could apply to many situations, but there’s a Wall Street adage that “a rising tide lifts all boats.” In a bull market, everyone is making money and looks like a genius, but many fund managers are exposed when the market goes south.
You don’t need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beats the guy with 130 IQ.
Simpler is even better, and being smarter or harder-working than the next guy won’t necessarily give you better returns.
We have long felt that the only value of stock forecasters is to make fortune-tellers look good.
For many years, the Wall Street Journal would run a dartboard challenge , where the picks of professional investors would be compared with the picks of a reporter throwing darts at the stock quotes page of the WSJ newspaper. Warren Buffett is skeptical that the professional investors would win.
The most important quality for an investor is temperament, not intellect. You need a temperament that neither derives great pleasure from being with the crowd or against the crowd.
Investing can be very emotional, and Buffett believes that the dispassionate investor, who doesn’t desire to pick the hot stock so that he can brag about it to his co-workers in the surgical lounge or doctor’s dining room, will be the most successful.
In the short term, the market is a popularity contest. In the long term, the market is a weighing machine.
Buffett believes that the daily or even monthly changes in the stock market are about supply and demand, but in the long-term, stock prices (and therefore returns) are about what companies are worth.
But a pin lies in wait for every bubble. And when the two eventually meet, a new wave of investors learns some very old lessons: First, many in Wall Street — a community in which quality control is not prized — will sell investors anything they will buy. Second, speculation is most dangerous when it looks easiest.
This quote was written in Warren Buffett’s letter to shareholders to shareholders in 2001, during the middle of the bursting of the tech bubble. Bubbles come and go, sweeping a new wave of investors each time. It was tulips in Holland in the 1600s, tech stocks in 2000, and possibly cryptocurrencies in 2017. Tread lightly when it looks easy to make money.
There seems to be some perverse human characteristic that likes to make easy things difficult.
It’s really not that hard to invest. Warren Buffett would argue to just buy the S&P 500 and a bond index fund. But he knows that investors, particularly intelligent and wealthy investors, pay a lot of money to fund managers in a usually futile effort to achieve better returns.
No matter how great the talent or the efforts, some things just take time. You can’t produce a baby in one month by getting nine women pregnant.
Warren Buffett isn’t afraid to make a crude joke or two. You can’t double your money in a year without taking big risks, but you’ll probably double your money in 10 years with a diversified portfolio.
You only have to do a very few things right in your life so long as you don’t do too many things wrong.
There are two ways to succeed in investing: one way is to make money, and the other way is to not lose money. Avoid mistakes like trading too often, paying high fees, and saving too little and you don’t have to do too much else right.
Warren Buffett Quotes on Personal Finance
Do not save what is left after spending, but spend what is left after saving.
This is all about paying yourself first. If you need to set a personal “retirement tax” to get yourself to save, then do it. Saving should not be optional.
Someone’s sitting in the shade today because someone planted a tree a long time ago.
This quote could apply to many areas of life. In personal finance, you need to plant the seeds for your retirement early in life and you’ll be sitting under a giant tree in retirement.
Warren Buffett’s Life Advice
It’s better to hang out with people better than you. Pick out associates whose behavior is better than yours and you’ll drift in that direction.
It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.
Tiger Woods, Bill Cosby, and Harvey Weinstein would probably agree with Warren Buffett on this one.
I’d give away every cent I have to be your age again.
Warren Buffett is one of the richest men in the world, but he can’t turn back time. This was his answer to a question asked by a young man in his 20s at one of his annual meetings. Time is a finite, non-renewable resource, no matter how much money you have.
So there you have it. Fifteen quotes from Warren Buffett that hopefully inspired you and reinforced your investment philosophy.
What do you think? What is your favorite Warren Buffett quote? Any other Buffett quotes you like that I did not include here?