Wise Investment Sayings by Warren Buffett 1

Wise Investment Sayings by Warren Buffett 1

Here are some wise investment sayings by billionaire Warren Buffett, the Chairman of Berkshire Hathaway and the so-called Sage of Omaha. He is currently the best in value investment in the world and operates according to an investment paradigm taught to him by Benjamin Graham. At the same time, this very humble man has a lot of home-spun wisdom and ideas that make him sound very old-fashioned and down-to-earth.

Here are some of my favourites:

Quotes and quips from Warren Buffett:

A public opinion poll is no substitute for thought.

The chains of habit are too light to be felt until they are too heavy to be broken.

I don't look to jump over 7-foot bars; I look around for 1-foot bars that I can step over.

Great investment opportunities come around when excellent companies are surrounded by unusual circumstances that cause the stock to be misappraised.

I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years. (The idea of buying and holding)

Our favorite holding period is forever. (There, proof!)

If a business does well, the stock eventually follows. (Value investing, and fundamental analysis)

If past history was all there was to the game, the richest people would be librarians. (It's more than analysing the history of the company)

It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently.

It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.

Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it.

Of the billionaires I have known, money just brings out the basic traits in them. If they were jerks before they had money, they are simply jerks with a billion dollars.

Price is what you pay. Value is what you get.

(I think this is one of the keys to his sayings)

Ideas on how to become rich - Warren Buffett is my hero :)

What is value investing?

What is value investing?

Value investing is an important investment paradigm that comes from investment ideas that Benjamin Graham preached. Value investing generally involves buying stocks which appear underpriced by some form of fundamental analysis, i.e. an analysis of the fundamentals of a company. For instance, one might look for indicators of an excellent company (or stock) such as discounts to book value, net asset value, dividend returns, low price-earning ratios (PE ratios), or the like.

Proponents of value investing, especially my favourite Warren Buffett, have argued that the essence of value investing is buying stocks at less than their intrinsic value. This discount of market price to value is called the "margin of safety". Simply put, the price is right if what you pay is lower than the value that you are getting for that price. Margin of safety has to do with both price and value, and that difference is the margin; the bigger the margin of safety, the better.

However, fundamental analysis is not as simple as it seems. Again, Buffett has taken the value investing concept even further and his focus has been basically on "finding an outstanding company at a sensible price". He has made a lot of money using value investing, becoming a billionaire in his outstanding career. I am a fan of Buffett and will be revisiting him in later posts here in this blog, as I consider him a role model.