Warren Buffett: Quotes about business

Warren Buffett is American business magnate, investor, and philanthropist. Explore interesting quotes on business.

Warren Buffett: 292 quotes25 likes

“I call investing the greatest business in the world … because you never have to swing.”

Interview in Forbes magazine (1 November 1974)
Variant: The stock market is a no-called-strike game. You don't have to swing at everything — you can wait for your pitch. The problem when you're a money manager is that your fans keep yelling, "Swing, you bum!"
1999 Berkshire Hathaway Annual Meeting, as quoted in The Tao of Warren Buffett by Mary Buffett and David Clark p. 145
Context: I call investing the greatest business in the world … because you never have to swing. You stand at the plate, the pitcher throws you General Motors at 47! U. S. Steel at 39! and nobody calls a strike on you. There's no penalty except opportunity lost. All day you wait for the pitch you like; then when the fielders are asleep, you step up and hit it.

“The worst sort of business is one that grows rapidly, requires significant capital to engender the growth, and then earns little or no money.”

2007 Chairman's Letter http://www.berkshirehathaway.com/letters/2007ltr.pdf <br class="br">Letters to Shareholders (1957 - 2012) <br class="br">Context: The worst sort of business is one that grows rapidly, requires significant capital to engender the growth, and then earns little or no money. Think airlines. Here a durable competitive advantage has proven elusive ever since the days of the Wright Brothers. Indeed, if a farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville down.

“After 25 years of buying and supervising a great variety of businesses, Charlie and I have not learned how to solve difficult business problems. What we have learned is to avoid them.”

1989 Chairman's Letter http://www.berkshirehathaway.com/letters/1989.html <br class="br">Letters to Shareholders (1957 - 2012) <br class="br">Context: After 25 years of buying and supervising a great variety of businesses, Charlie and I have not learned how to solve difficult business problems. What we have learned is to avoid them. To the extent we have been successful, it is because we concentrated on identifying one-foot hurdles that we could step over because we acquired any ability to clear seven-footers.

“In the business world, the rearview mirror is always clearer than the windshield.”

“In the world of business, the people who are most successful are those who are doing what they love.”

“I learned to go into business only with people whom I like, trust, and admire.”

“We're more comfortable in that kind of business. It means we miss a lot of very big winners. But we wouldn't know how to pick them out anyway. It also means we have very few big losers - and that's quite helpful over time. We're perfectly willing to trade away a big payoff for a certain payoff.”

1999 Berkshire Hathaway Annual Meeting, as quoted in "Why Won't Buffett Invest in Tech Stocks?" at Motley Fool (6 March 2000) http://www.fool.com/boringport/2000/boringport000306.htm

“It’s simply to say that managers and investors alike must understand that accounting numbers is the beginning, not the end, of business valuation.”

1982 Chairman's Letter http://www.berkshirehathaway.com/letters/1982.html <br class="br">Letters to Shareholders (1957 - 2012)

“Upon leaving [the derivatives business], our feelings about the business mirrored a line in a country song: "I liked you better before I got to know you so well."”

2008 Chairman's Letter
Letters to Shareholders (1957 - 2012)

“The most common cause of low prices is pessimism — some times pervasive, some times specific to a company or industry. We want to do business in such an environment, not because we like pessimism but because we like the prices it produces. It's optimism that is the enemy of the rational buyer.”

1990 Chairman's Letter http://www.berkshirehathaway.com/letters/1990.html <br class="br">Letters to Shareholders (1957 - 2012)

“In fact, when we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”

1988 Chairman's Letter http://www.berkshirehathaway.com/letters/1988.html <br class="br">Letters to Shareholders (1957 - 2012)

“I try to buy stock in businesses that are so wonderful that an idiot can run them. Because sooner or later, one will.”

In a panel discussion after the premier of the 2008 documentary I.O.U.S.A.. Panel at the Premier, 0:05:42ff., DVD extras, I.O.U.S.A. (2008)

“For example: (1) As if governed by Newton's First Law of Motion, an institution will resist any change in its current direction; (2) Just as work expands to fill available time, corporate projects or acquisitions will materialize to soak up available funds; (3) Any business craving of the leader, however foolish, will be quickly supported by detailed rate-of-return and strategic studies prepared by his troops; and (4) The behavior of peer companies, whether they are expanding, acquiring, setting executive compensation or whatever, will be mindlessly imitated.”

1989 Chairman's Letter http://www.berkshirehathaway.com/letters/1989.html <br class="br">Letters to Shareholders (1957 - 2012)

“Intrinsic value can be defined simply: It is the discounted value of the cash that can be taken out of a business during its remaining life. The calculation of intrinsic value, though, is not so simple. As our definition suggests, intrinsic value is an estimate rather than a precise figure, and it is additionally an estimate that must be changed if interest rates move or forecasts of future cash flows are revised.”

Berkshire Hathaway Inc.: An Owner's Manual http://www.berkshirehathaway.com/owners.html (1999) <br class="br">Letters to Shareholders (1957 - 2012)

“Of course, Charlie and I can identify only a few Inevitables, even after a lifetime of looking for them. Leadership alone provides no certainties: Witness the shocks some years back at General Motors, IBM and Sears, all of which had enjoyed long periods of seeming invincibility. Though some industries or lines of business exhibit characteristics that endow leaders with virtually insurmountable advantages, and that tend to establish Survival of the Fattest as almost a natural law, most do not. Thus, for every Inevitable, there are dozens of Impostors, companies now riding high but vulnerable to competitive attacks.”

1996 Chairman's Letter http://www.berkshirehathaway.com/letters/1996.html <br class="br">Letters to Shareholders (1957 - 2012)

“I like to study failure, actually. My partner says, "I want to know where I'll die so I'll never go there." We want to see what has caused businesses to go bad. The biggest thing that kills them is complacency…. The danger would always be that you rest on your laurels.”

Rules for success

“If you understood a business perfectly and the future of the business, you would need very little in the way of a margin of safety. So, the more vulnerable the business is, assuming you still want to invest in it, the larger margin of safety you'd need. If you're driving a truck across a bridge that says it holds 10,000 pounds and you've got a 9,800 pound vehicle, if the bridge is 6 inches above the crevice it covers, you may feel okay, but if it's over the Grand Canyon, you may feel you want a little larger margin of safety…”

1997 Berkshire Hathaway Annual Meeting, as quoted in Of Permanent Value : The Story of Warren Buffett, by Andrew Kilpatrick, Vol. 2 (2007), p. 1615

“Just because Charlie and I can clearly see dramatic growth ahead for an industry does not mean we can judge what its profit margins and returns on capital will be as a host of competitors battle for supremacy. At Berkshire we will stick with businesses whose profit picture for decades to come seems reasonably predictable. Even then, we will make plenty of mistakes.”

1994 Chairman's Letter http://www.berkshirehathaway.com/letters/1994.html <br class="br">Letters to Shareholders (1957 - 2012)

“I insist on a lot of time being spent, almost every day, to just sit and think. That is very uncommon in American business. I read and think. So I do more reading and thinking, and make less impulse decisions than most people in business. I do it because I like this kind of life.”

http://www.entrepreneur.com/article/239763 "10 Brilliant Quotes From Warren Buffett, America's Second-Richest Person " entrepreneur.com (13 November 2014)
Quotes from the press

“The strategy we've adopted precludes our following standard diversification dogma. Many pundits would therefore say the strategy must be riskier than that employed by more conventional investors. We disagree. We believe that a policy of portfolio concentration may well decrease risk if it raises, as it should, both the intensity with which an investor thinks about a business and the comfort-level he must feel with its economic characteristics before buying into it. In stating this opinion, we define risk, using dictionary terms, as "the possibility of loss or injury."”

1993 Chairman's Letter http://www.berkshirehathaway.com/letters/1993.html <br class="br">Letters to Shareholders (1957 - 2012)