“The line separating investment and speculation, which is never bright and clear, becomes blurred still further when most market participants have recently enjoyed triumphs. Nothing sedates rationality like large doses of effortless money. After a heady experience of that kind, normally sensible people drift into behavior akin to that of Cinderella at the ball. They know that overstaying the festivities—that is, continuing to speculate in companies that have gigantic valuations relative to the cash they are likely to generate in the future—will eventually bring on pumpkins and mice. But they nevertheless hate to miss a single minute of what is one helluva party. Therefore, the giddy participants all plan to leave just seconds before midnight. There's a problem, though: They are dancing in a room in which the clocks have no hands.”

—  Warren Buffett

2000 Chairman's Letter http://www.berkshirehathaway.com/letters/2000.html
Letters to Shareholders (1957 - 2012)

Adopted from Wikiquote. Last update June 3, 2021. History

Help us to complete the source, original and additional information

Do you have more details about the quote "The line separating investment and speculation, which is never bright and clear, becomes blurred still further when mos…" by Warren Buffett?
Warren Buffett photo
Warren Buffett 146
American business magnate, investor, and philanthropist 1930

Related quotes

Edmund Burke photo

“Hypocrisy, of course, delights in the most sublime speculations; for, never intending to go beyond speculation, it costs nothing to have it magnificent.”

Edmund Burke book Reflections on the Revolution in France

Reflections on the Revolution in France (1790)

Joan Robinson photo

“But, as soon as speculators become an important influence in the market, their business is to speculate on each others behaviour.”

Joan Robinson (1903–1983) English economist

Source: Contributions to Modern Economics (1978), Chapter 5, The Rate of Interest, p. 46

Sophie Kinsella photo

“Honestly, do these people have nothing better to do than engage in stupid mindless speculation about people they don't know?”

Sophie Kinsella book Can You Keep a Secret?

Source: Can You Keep a Secret?

Manuel Castells photo

“If valuation in the financial markets provides the bottom line for the performance of the company, it is labor that remains the source of productivity, innovation, and competitiveness.”

Manuel Castells (1942) Spanish sociologist (b.1942)

Source: The Internet Galaxy - Reflections on the Internet, Business, and Society (2001), Chapter 3, e-Business and the New Economy, p. 90

“If you defend a behavior by arguing that people are programmed directly for it, then how do you continue to defend it if your speculation is wrong, for the behavior then becomes unnatural and worthy of condemnation. Better to stick resolutely to a philosophical position on human liberty: what free adults do with each other in their own private lives is their business alone. It need not be vindicated — and must not be condemned—by genetic speculation.”

Stephen Jay Gould book Ever Since Darwin

"So Cleverly Kind an Animal", p. 267
Ever Since Darwin (1977)

Rob Enderle photo

“I do think it is likely a tad frustrating for Gates to watch his own company pivot and be successful with new initiatives while Apple gets a huge valuation even though its latest efforts have underperformed or, like the HomePod, largely failed in market.”

Rob Enderle (1954) American financial analyst

Satya Nadella Keynote at Microsoft Build: Showcasing a Balance of Vision, Product, Customer Empathy http://itbusinessedge.com/blogs/unfiltered-opinion/satya-nadella-keynote-at-microsoft-build-showcasing-a-balance-of-vision-product-customer-empathy.html in IT Business Edge (7 May 2018)

Chen Ruolin photo

“Diving is relatively niche and not so market-oriented. It is one aspect that audiences like to watch, but in terms of participation, there will be fewer people participating.”

Chen Ruolin (1992) Chinese diver

"从跳台女皇转身裁判席，陈若琳对跳水造星难有了更深的体会" http://m.thepaper.cn/kuaibao_detail.jsp?contid=3109243&from=kuaibao

John Kenneth Galbraith photo

“This view that the action of the Federal Reserve authorities in 1927 was responsible for the speculation and collapse which followed has never been seriously shaken. There are reasons why it is attractive. It is simple, and it exonerates both the American people and the economic system from substantial blame… Yet the explanation obviously assumes that people will always speculate if only they can get the money to finance it. Nothing could be farther from the case. There were times before and there has been long periods since when credit was plentiful and cheap -- far cheaper than in 1927-29 -- and when speculation was negligible. Nor was speculation out of control after 1927, except that it was beyond the reach of men who did not want in the least to control it. The explanation is a tribute only to a recurrent preference, in economic matters, for formidable nonsense.”

John Kenneth Galbraith book The Great Crash, 1929

Source: The Great Crash, 1929 (1954 and 1997 https://openlibrary.org/books/OL25728842M/The_Great_Crash_1929), Chapter I, "Vision and Boundless Hope and Optimism" p. 10

Linda McQuaig photo

“Under the market system, there is demand for a product if a lot of people want it - but that demand counts for nothing if those people have no money. If they lack money, their demand essentially doesn't exist…This explains why the drug industry is not investing money to develop a cure for a disease known as sleeping sickness, which leaves its victims in a coma. The disease…killed 66,000 people last year and threatens to infect 60 million more - but the only people who are afflicted by it are poverty-stricken Africans with no clout in the marketplace. Interestingly, there is a drug called eflornithine that is effective in lifting victims out of their comas. But drug companies stopped producing eflornithine in 1995 because it was no longer profitable to continue. The drug was still desperately needed, but only by people without money. So, following modern market practices, these people were simply left in a coma.”

Linda McQuaig (1951) journalist and author

All You Can Eat: Greed, Lust and the New Capitalism (2001)

Related topics