Quotes  

有个做投资的朋友发了个他自己整理的巴菲特等人说过的一些话________段永平

 

C.M(Charlie Munger):  Above all, never fool yourself, and remember that you are the easiest person to fool.

B.G(Ben Graham):      Wall Street people learn nothing and forget everything.

P.F(Philip Fisher):        I don't want a lot of good investments; I want a few outstanding ones. If the job has been correctly done when a comm stock is purchased, the time to sell it is almost never.

B.F(Ben Franklin):        After crosses and losses, men grow humbler and wiser.

W.B(Warren Buffett):   You only have to do a very few things right in your life so long as you don't do too many things wrong.

W.B:   You know, people talk about this being an uncertain time. You know, all time is uncertain, I mean, it was uncertain back in- in 2007, we just didn't know it was uncertain. It was-uncertain on September 10th, 2001. It was uncertain on October 18th, 1987, you just didn't know it.

W.B:    You're neither right nor wrong because other people agree with you. You're right because your facts are right and your reasoning is right--that's the only thing that makes you right. And if your facts and reasoning are right, you don't have to worry about anybody else.W.B: We Simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.

W.B:  We will only do with your money what we would do with our own.

W.B:  We will reject interesting opportunities rather than over-leverage our balance sheet.

W.B:  Wide diversification is only required when investors do not understand what they are doing.

W.B:  Without passion, you don't have energy. Without energy, you have nothing.

W.B:   Working with people who cause your stomach to churn seems much like marrying for money--probably a bad idea under any circumstances, but absolute madness if you are already rich.

C.M: A great business at a fair price is superior to a fair business at a great price.（个人认为就是未来现金流折现的意思）

What's your acquisition criteria? What has made you successful in this area where most others have failed?

We look for people who have a passion for their business. We frequently buy businesses the owners still manage, where they are monetizing a lifetime of work. They often don’t want to sell but need to for estate planning or other reasons.

They need to have a passion because we don’t have any employment contracts – because we don’t think they work – we don’t stand over them with whips, and they’re already rich. We just try not to kill or dampen their love for their business.

We also look for three things: intelligence, energy and integrity. If you don’t have the latter, then you should hope they don’t have the first two either. If someone doesn’t have integrity, then you want them to be dumb and lazy. (Laughter)

We look them in the eyes and ask, “Do they love the business or the money?” If someone wants to cash out, then we have a problem because we only have 16 people at Berkshire’s headquarters and can’t run it ourselves.

Munger: The interesting thing is how well it [our acquisition strategy/process] has worked over a great many decades, and how few people copy it. (Laughter)

We criticize it [acquisitions], but then we do it. But we have different motivations.

We’ve been reasonably successful in having people run their businesses with the same passion as before we bought them.

Gillette, the oil companies, etc. all went out and bought a lot of businesses and tried to run them themselves. We’re under no illusions that we can do that. We think that having lots of Executive Vice Presidents, directives from headquarters, centralized Human Resources etc. can destroy the incentives of the people who’ve already gotten rich, and we’re counting on them making us rich.

The successor to me will come from Berkshire, knows our system, has seen that it works, and will be surrounded by people who believe in it. So it’s not going to be so hard to keep this train going down the tracks at 90 miles per hour.

CM: Our success has come from the lack of oversight we’ve provided, and our success will continue to be from a lack of oversight. (Laughter)

But if you’re going to provide minimal oversight, you have to buy carefully. It’s a different model from GE’s. GE’s works – it’s just very different from ours.]

We are a conglomerate – and we hope to become more of a conglomerate.

We’re successful because of simplicity itself: We let people who play the game very well keep doing it. Our successor won’t change this. The big worry is that the culture is tampered with and there’s oversteering. But our board and owners won’t allow this.

 

这是我的一个西雅图的朋友发给我的， 

Charlie Munger’s Quotes

Here is my list of “Mungerisms”.Over time I have used many of them to my advantage and the rest are in my list as reminders of ways I could improve my condition or as cautions against folly.I hope you too find them just as helpful as I do.
If you don’t know who Charlie Munger is , here is a small introduction: http://wealthymatters.com/2011/02/12/charlie-munger/

(1)”Most people are too fretful, they worry too much.Success means being very patient, but aggressive when it’s time.”

看完这条可不要too aggressive哈。芒格本人曾经就因为用margin给自己带来过大麻烦。我这个朋友也喜欢用margin，非常危险。

(2)”Using [a stock’s] volatility as a measure of risk is nuts. Risk to us is 1) the risk of permanent loss of capital, or 2) the risk of inadequate return. Some great businesses have very volatile returns – for example, See’s [a candy company owned by Berkshire] usually loses money in two quarters of each year – and some terrible businesses can have steady results.”

(3)”I think that, every time you saw the word EBITDA [earnings], you should substitute the word “bullshit” earnings.”

(4)“Warren talks about these discounted cash flows. I’ve never seen him do one.”?”It’s true,” replied Buffett. “If the value of a company doesn’t just scream out at you, it’s too close.” 就是毛估估的意思？
(5)”If you buy something because it’s undervalued, then you have to think about selling it when it approaches your calculation of its intrinsic value. That’s hard. But if you buy a few great companies, then you can sit on your ass. That’s a good thing.”

这条大概要花很多年才能真明白，大概就是未来现金流折现的意思。我觉得自己现在大概有点明白了。
(6)”We bought a doomed textile mill [Berkshire Hathaway] and a California S&L [Wesco] just before a calamity. Both were bought at a discount to liquidation value.”

(7)”For society, the Internet is wonderful, but for capitalists, it will be a net negative. It will increase efficiency, but lots of things increase efficiency without increasing profits. It is way more likely to make American businesses less profitable than more profitable.  This is perfectly obvious, but very little understood.” 我也这么认为：internet 实际上是就业杀手，需要很多年才能消化。但是，如果能看懂这个变化则会非常有收获。

(8)”Virtually every investment expert’s public assessment is that he is above average, no matter what is the evidence to the contrary.”

这可是芒格说的哈。
(9)”Investing is where you find a few great companies and then sit on your ass.”

(10)”Warren spends 70 hours a week thinking about investing.”

(11)”People calculate too much and think too little.” 投资上看起来确实如此。

(12)”Whenever you think something or some person is ruining your life, it’s you. A victimization mentality is so debilitating.”

(13)”The tax code gives you an enormous advantage if you can find some things you can just sit with.” 对美国人尤其如此，外国人投美股有点不同。

(14)”If you’re going to buy something which compounds for 30 years at 15% per annum and you pay one 35% tax at the very end, the way that works out is that after taxes, you keep 13.3% per annum.  In contrast, if you bought the same investment, but had to pay taxes every year of 35% out of the 15% that you earned, then your return would be 15% minus 35% of 15%—or only 9.75% per year compounded. So the difference there is over 3.5%. And what 3.5% does to the numbers over long holding periods like 30 years is truly eye-opening…” 同上句。

(15)”The number one idea, is to view a stock as an ownership of the business [and] to judge the staying quality of the business in terms of its competitive advantage. Look for more value in terms of discounted future cash flow than you’re paying for. Move only when you have an advantage. It’s very basic. You have to understand the odds and have the discipline to bet only when the odds are in your favor.” 很稀饭这句。

(16)”Failure to handle psychological denial is a common way for people to go broke. You’ve made an enormous commitment to something.You’ve poured effort and money in. And the more you put in, the more that the whole consistency principle makes you think,” Now it has to work. If I put in just a little more, then it ’all work…. People go broke that way —because they can ’t stop,rethink,and say,’ I can afford to write this one off and live to fight again. I don’t have to pursue this thing as an obsession —in a way that will break me .’ “

想起沉入成本。还想起老巴说的，如果是个坑就别再往下挖了。看看有多少人在给自己挖坑就明白了。
(17)”…in terms of business mistakes that I’ve seen over a long lifetime, I would say that trying to minimize taxes too much is one of the great standard causes of really dumb mistakes. I see terrible mistakes from people being overly motivated by tax considerations. Warren and I personally don’t drill oil wells. We pay our taxes. And we’ve done pretty well, so far. Anytime somebody offers you a tax shelter from here on in life, my advice would be don’t buy it.”

让我想起那些为避税而搬离加州的有钱的朋友们，为了省那些未来不属于自己的钱而搬到一个自己未必喜欢的地方好像有点滑稽。当然，搬过去

后又喜欢上了那是有智慧的表现啊，至少我还没听说哪位搬家后说新地方不好的。
(18)”I believe that we are at or near the apex of a great civilization….In 50-100 years, if we’re a poor third to some countries in Asia, I wouldn’t be surprised. If I had to bet, the part of the world that will do best will be Asia.” 或许50-100年也许稍微短了一点。
(19)”To some extent, stocks are like Rembrandts. They sell based on what they’ve sold in the past. Bonds are much more rational. No-one thinks a bond’s value will soar to the moon.” “Imagine if every n fund in America bought Rembrandts. Their value would go up and they would create their own constituency.”

(20)”It’s crazy to assume that what’s happening in Argentina and Japan is inconceivable here.”
(21)”REITs are way more suitable for individual shareholders than for corporate shareholders. And Warren has enough residue from his old cigar-butt personality that when people became disenchanted with the REITs and the market price went down to maybe a 20% discount from what the companies could be liquidated for, he bought a few shares with his personal money. So it’s nice that Warren has a few private assets with which to pick up cigar butts in memory of old times – if that’s what keeps him amused.”

(22)”Smart people aren’t exempt from professional disasters from overconfidence. Often, they just run aground in the more difficult voyages they choose, relying on their self-appraisals that they have superior talents and methods.”

(23))”The whole concept of the house advantage is an interesting one in modern money management. The terms of the managers of the private partnerships look a lot like the take of the croupier at Monte Carlo, only greater.”

(24)”There are always people who will be better at some thing than you are.You have to learn to be a follower before you become a leader.”

(25)”We all are learning, modifying, or destroying ideas all the time. Rapid destruction of your ideas when the time is right is one of the most valuable qualities you can acquire. You must force yourself to consider arguments on the other side. If you can’t state arguments against what you believe better than your detractors, you don’t know enough.”

(26)“I remember the $0.05 hamburger and a $0.40-per-hour minimum wage, so I’ve seen a tremendous amount of inflation in my lifetime. Did it ruin the investment climate? I think not.”

(27)”A lot of success in life and business comes from knowing what you want to avoid: early death, a bad marriage, etc.”

就是坚持不做不对的事情的意思。
(28)”There are two types of mistakes: 1) doing nothing[We saw it, but didn’t act on it]; what Warren calls “sucking my thumb” and 2) buying with an eyedropper things we should be buying a lot of.”

(29)”Checklist routines avoid a lot of errors. You should have all of this elementary wisdom, and you should go through a mental checklist in order to use it. There is no other procedure that will work as well.” 还是坚持不做不对的事情的意思。

(30)”Litigation is notoriously time-consuming, inefficient, costly and unpredictable.”

(31)”Finding a single investment that will return 20% per year for 40 years tends to happen only in dreamland. In the real world, you uncover an opportunity, and then you compare other opportunities with that. And you only invest in the most attractive opportunities. That’s your opportunity cost. That’s what you learn in freshman economics. The game hasn’t changed at all. That’s why Modern Portfolio Theory is so asinine.”

这游戏没变过，在哪里都一样。
(32)”The more hard lessons you can learn vicariously rather than through your own hard experience, the better.”
“Well, some of our success we predicted and some of it was fortuitous.”

(33)”The general assumption is that it must be easy to sit behind a desk and people will bring in one good opportunity after another — this was the attitude in venture capital until a few years ago. This was not the case at all for us — we scrounged around for companies to buy. For 20 years, we didn’t buy more than one or two per year. …It’s fair to say that we were rooting around. There were no commissioned salesmen. Anytime you sit there waiting for a deal to come by, you’re in a very dangerous seat.” 这个有点累。

(34)”Our biggest mistakes, were things we didn’t do, companies we didn’t buy.”

(35)”You can progress only when you learn the method of learning.”

(36)”It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.” 小聪明和大智慧的差别，也是坚持不做不对的事情的意思。
(37)”Berkshire’s past record has been almost ridiculous. If Berkshire had used even half the leverage of, say, Rupert Murdoch, it would be five times its current size.”

经常有很多人用很多margin，然后去和BRK比某年的回报，但没多少人可以把30年的总回报拿来比的，30年以后可能还是如此。
(38)”It took us months of buying all the Coke stock we could to accumulate $1 billion worth — equal to 7% of the company. It’s very hard to accumulate major positions.”

(39)”All large aggregations of capital eventually find it hell on earth to grow and thus find a lower rate of return”

(40)”If you have only a little capital and are young today, there are fewer opportunities than when I was young. Back then, we had just come out of a depression. Capitalism was a bad word. There had been abuses in the 1920s. A joke going around then was the guy who said, ‘I bought stock for my old age and it worked — in six months, I feel like an old man!’ “It’s tougher for you, but that doesn’t mean you won’t do well — it just may take more time. But what the heck, you may live longer.”

(41)”Regarding the demographic trend called Baby Boomers, it’s peanuts compared to the trend of economic growth.? Over the last century, [our] GNP is up seven times.? This was not caused by Baby Boomers, but by the general success of capitalism and the march of technology.? Those trends were so favorable that little blips in the birth rate were not that significant.??We can keep social peace as long as GNP rises 3% annually – this can pay for spending by politicians.? If we ever got to stasis [no growth], then with all the promises, you’d get real tensions between the generations.? The Baby Boomers would exacerbate it, but the real cause would be lack of growth.”

(42)”Practically everybody overweighs the stuff that can be numbered, because it yields to the statistical techniques they’re taught in academia, and doesn’t mix in the hard-to-measure stuff that may be more important. That is a mistake I’ve tried all my life to avoid, and I have no regrets for having done that.”

(43)”You must know the big ideas in the big disciplines, and use them routinely — all of them, not just a few. Most people are trained in one model — economics, for example — and try to solve all problems in one way. You know the old saying: to the man with a hammer, the world looks like a nail. This is a dumb way of handling problems.”

(44)”The whole concept of dividing it up into ‘value’ and ‘growth’ strikes me as twaddle. It’s convenient for a bunch of n fund consultants to get fees prattling about and a way for one advisor to distinguish himself from another. But, to me, all intelligent investing is value investing.”

(45)”In my whole life, I have known no wise people who didn’t read all the time – none, zero. You’d be amazed at how much Warren reads, at how much I read. My children laugh at me. They think I’m a book with a couple of legs sticking out.”

(46)”We read a lot.? I don’t know anyone who’s wise who doesn’t read a lot.? But that’s not enough: You have to have a temperament to grab ideas and do sensible things.? Most people don’t grab the right ideas or don’t know what to do with them.”

(47)”We get these questions a lot from the enterprising young. It’s a very intelligent question: You look at some old guy who’s rich and you ask, ‘How can I become like you, except faster?”

(48)”It takes almost no capital to open a new See’s candy store. We’re drowning in capital of our own that has almost no cost. It would be crazy to franchise stores like some capital-starved pancake house. We like owning our own stores as a matter of quality control”

(49)”It’s dangerous to short stocks.”

(50)”Being short and seeing a promoter take the stock up is very irritating. It’s not worth it to have that much irritation in your life.”

(51)”It would be one of the most irritating experiences in the world to do a lot of work to uncover a fraud and then at have it go from X to 3X and and have the crooks happily partying with your money while you’re meeting margin calls. Why would you want to go within hailing distance of that?”

(52)”…the cost of being a publicly traded stock has gone way, way up. It doesn’t make sense for a little company to be public anymore. A lot of little companies are going private to be rid of these burdensome requirements….”?

(53)”Well the open-outcry auction is just made to turn the brain into mush: you’ve got social proof, the other guy is bidding, you get reciprocation tendency, you get deprival super-reaction syndrome, the thing is going away… I mean it just absolutely is designed to manipulate people into idiotic behavior.”

(54)”The problem with closed bid auctions is that they are frequently won by people making a technical mistake, as in the case with Shell paying double for Belridge Oil. You can’t pay double the losing bid in an open outcry auction.”

(55)”We’re partial to putting out large amounts of money where we won’t have to make another decision.”

(56)”Understanding how to be a good investor makes you a better business manager and vice versa.”

(57)”What’s fascinating . . .is that you could now have a business that might have been selling for $10 billion where the business itself could probably not have borrowed even $100 million. But the owners of that business, because its public, could borrow many billions of dollars on their little pieces of paper- because they had these market valuations. But as a private business, the company itself couldn’t borrow even 1/20th of what the individuals could borrow.”

(58)”I constantly see people rise in life who are not the smartest – sometimes not even the most diligent. But they are learning machines; they go to bed every night a little wiser than when they got up. And, boy, does that habit help, particularly when you have a long run ahead of you.”

(59)”The basic concept of value to a private owner and being motivated when you’re buying and selling securities by reference to intrinsic value instead of price momentum – I don’t think that will ever be outdated.”

(60)”Warren and I have not made our way in life by making successful macroeconomic predictions and betting on our conclusions.”

(61)”Well, the questioner came from Singapore which has perhaps the best economic record in the history of any developing economy and therefore he referred to 15% per annum as modest. It’s not modest–it’s arrogant. Only someone from Singapore would call it modest.”

 

(62)”I don’t spend much time? regretting the past, once I’ve taken my lesson from it. I don’t dwell on it.”

(63)”If you took our top fifteen decisions out, we’d have a pretty average record. It wasn’t hyperactivity, but a hell of a lot of patience. You stuck to your principles and when opportunities came along, you pounce on them with vigor.”

(64)”We just throw some decisions into the ‘too hard’ file and go onto the others.”

(65)”Forgetting your mistakes is a terrible error if you are trying to improve your cognition.”

(66)”In the 1930s, there as a stretch here you could borrow more against the real estate than you could sell it for. I think that’s hat’s going on in today’s private-equity?world”?

(67)”Mimicking the herd invites regression to the mean.”

(68)”A lot of opportunities in life tend to last a short while, due to some temporary inefficiency… For each of us, really good investment opportunities aren’t going to come along too often and won’t last too long, so you’ve got to be ready to act and have a prepared mind.”

(69)”Everywhere there is a large commission, there is a high probability of a ripoff.”

(70)”Acknowledging what you don’t know is the dawning of wisdom.”

(71)”Recognize reality even when you don’t like it – especially when you don’t like it.”

(72)”We try more to profit from always remembering the obvious than from grasping the esoteric.”

(73)?“Over the long term, it’s hard for a stock to earn a much better return that the business which underlies it earns. If the business earns six percent on capital over forty years and you hold it for that forty years, you’re not going to make much different than a six percent return – even if you originally buy it at a huge discount. Conversely, if a business earns eighteen percent on capital over twenty or thirty years, even if you pay an expensive looking price, you’ll end up with one hell of a result.”

(74)”Just as a man working with his tools should know its limitations, a man working with his cognitive apparatus must know its limitations.”

(75)”Many markets get down to two or three big competitors—or five or six. And in some of those markets, nobody makes any money to speak of. But in others, everybody does very well.? Over the years, we’ve tried to figure out why the competition in some markets gets sort of rational from the investor’s point of view so that the shareholders do well, and in other markets, there’s destructive competition that destroys shareholder wealth.? If it’s a pure commodity like airline seats, you can understand why no one makes any money. As we sit here, just think of what airlines have given to the world—safe travel, greater experience, time with your loved ones, you name it. Yet, the net amount of money that’s been made by the shareholders of airlines since Kitty Hawk, is now a negative figure—a substantial negative figure. Competition was so intense that, once it was unleashed by deregulation, it ravaged shareholder wealth in the airline business.? Yet, in other fields—like cereals, for example—almost all the big boys make out. If you’re some kind of a medium grade cereal maker, you might make 15% on your capital. And if you’re really good, you might make 40%. But why are cereals so profitable—despite the fact that it looks to me like they’re competing like crazy with promotions, coupons and everything else? I don’t fully understand it.? Obviously, there’s a brand identity factor in cereals that doesn’t exist in airlines. That must be the main factor that accounts for it.And maybe the cereal makers by and large have learned to be less crazy about fighting for market share—because if you get even one person who’s hell-bent on gaining market share…. For example, if I were Kellogg and I decided that I had to have 60% of the market, I think I could take most of the profit out of cereals. I’d ruin Kellogg in the process. But I think I could do it.”
“You must have the confidence to override people with more credentials than you whose cognition is impaired by incentive-caused bias or some similar psychological force that is obviously present. But there are also cases where you have to recognize that you have no wisdom to add – and that your best course is to trust some expert.”

(76)”In business we often find that the winning system goes almost ridiculously far in maximizing and or minimizing one or a few variables — like the discount warehouses of Costco.”
(77)”There are worse situations than drowning in cash and sitting, sitting, sitting. I remember when I wasn’t awash in cash — and I don’t want to go back.”

(78)”If you always tell people why, they’ll understand it better, they’ll consider it more important, and they’ll be more likely to comply.”

(79)”Spend less than you make; always be saving something. Put it into a tax-deferred account. Over time, it will begin to amount to something. This is such a no-brainer.”

(80)”I try to get rid of people who always confidently answer questions about which they don’t have any real knowledge.”

(81)”I believe in the discipline of mastering the best that other people have ever figured out. I don’t believe in just sitting down and trying to dream it all up yourself. Nobody’s that smart…”

(82)”I know someone who lives next door to what you would actually call a fairly modest house that just sold for $17 million. There are some very extreme housing price bubbles going on .”

(83)”Experience tends to confirm a long-held notion that being prepared, on a few occasions in a lifetime, to act promptly in scale, in doing some simple and logical thing, will often dramatically improve the financial results of that lifetime. A few major opportunities, clearly recognizable as such, will usually come to one who continuously searches and waits, with a curious mind that loves diagnosis involving multiple variables. And then all that is required is a willingness to bet heavily when the odds are extremely favorable, using resources available as a result of prudence and patience in the past.”

(84)”The present era has no comparable referent in the past history of capitalism. We have a higher percentage of the intelligentsia engaged in buying and selling pieces of paper and promoting trading activity than in any past era. A lot of what I see now reminds me of Sodom and Gomorrah. You get activity feeding on itself, envy and imitation. It has happened in the past that there came bad consequences.”

(85)”Our investment style has been given a name – focus investing – which implies ten holdings, not one hundred or four hundred. The idea that it is hard to find good investments, so concentrate in a few, seems to me to be an obvious idea. But 98% of the investment world does not think this way. It’s been good for us.”

(86)”You want to be very careful with intense ideology. It presents a big danger for the only mind you’re ever going to get.”

(87)”Like Warren, I had a considerable passion to get rich. “Not because I wanted Ferraris– I wanted the independence. I desperately wanted it.”

(88)”Anyone with an engineering frame of mind will look at [accounting standards] and want to throw up.”

(89)”You can progress only when you learn the method of learning.”

(90)”It’s a good habit to trumpet your failures and be quiet about your successes.”

(91)”In effect about half our spare cash was stashed in currencies other than the dollar. I consider that a non-event. As it happens it’s been a very profitable non-event.”

(92)”As for what we like least, we don’t want kleptocracies. We need a rule of law. If people are stealing from the companies, we don’t need that.”

(93)”I agree with Peter Drucker that the culture and legal systems of the United States are especially favorable to shareholder interests, compared to other interests and compared to most other countries. Indeed, there are many other countries where any good going to public shareholders has a very low priority and almost every other constituency stands higher in line.”

(94)”Berkshire in its history has made money betting on sure things.”

(95)”I don’t think there’s any business that we’ve bought that would have sold itself to a hedge fund. There’s a class of businesses that doesn’t want to deal with private-equity and hedge funds…thank God”

(96)”We’re guessing at our future opportunity cost. Warren is guessing that he’ll have the opportunity to put capital out at high rates of return, so he’s not willing to put it out at less than 10% now. But if we knew interest rates would stay at 1%, we’d change. Our hurdles reflect our estimate of future opportunity costs.”

(97)”Our ideas are so simple that people keep asking us for mysteries when all we have are the most elementary ideas.”

(98)”The idea of a margin of safety, a Graham precept, will never be obsolete. The idea of making the market your servant will never be obsolete. The idea of being objective and dispassionate will never be obsolete. So Graham had a lot of wonderful ideas.”

(99)”Ben Graham could run his Geiger counter over this detritus from the collapse of the 1930s and find things selling below their working capital per share and so on….? But he was, by and large, operating when the world was in shell shock from the 1930s—which was the worst contraction in the English-speaking world in about 600 years. Wheat in Liverpool, I believe, got down to something like a 600-year low, adjusted for inflation. the classic Ben Graham concept is that gradually the world wised up and those real obvious bargains disappeared. You could run your Geiger counter over the rubble and it wouldn’t click. … Ben Graham followers responded by changing the calibration on their Geiger counters. In effect, they started defining a bargain in a different way. And they kept changing the definition so that they could keep doing what they’d always done. And it still worked pretty well.”

(100)”Warren and I don’t feel like we have any great advantage in the high-tech sector. In fact, we feel like we’re at a big disadvantage in trying to understand the nature of technical developments in software, computer chips or what have you. So we tend to avoid that stuff, based on our personal inadequacies. Again, that is a very, very powerful idea. Every person is going to have a circle of competence. And it’s going to be very hard to advance that circle. If I had to make my living as a musician…. I can’t even think of a level low enough to describe where I would be sorted out to if music were the measuring standard of the civilization.? So you have to figure out what your own aptitudes are. If you play games where other people have the aptitudes and you don’t, you’re going to lose. And that’s as close to certain as any prediction that you can make. You have to figure out where you’ve got an edge. And you’ve got to play within your own circle of competence.? If you want to be the best tennis player in the world, you may start out trying and soon find out that it’s hopeless—that other people blow right by you. However, if you want to become the best plumbing contractor in Bemidji, that is probably doable by two-thirds of you. It takes a will. It takes the intelligence. But after a while, you’d gradually know all about the plumbing business in Bemidji and master the art. That is an attainable objective, given enough discipline. And people who could never win a chess tournament or stand in center court in a respectable tennis tournament can rise quite high in life by slowly developing a circle of competence—which results partly from what they were born with and partly from what they slowly develop through work.”

(101)”Beta and modern portfolio theory and the like – none of it makes any sense to me.”

(102)”Today, it seems to be regarded as the duty of CEOs to make the stock go up. This leads to all sorts of foolish behavior. We want to tell it like it is.”

(103)”Our standard prescription for the know-nothing investor with a long-term time horizon is a no-load index fund. I think that works better than relying on your stock broker. The people who are telling you to do something else are all being paid by commissions or fees. The result is that while index fund investing is becoming more and more popular, by and large it’s not the individual investors that are doing it. It’s the institutions.”

(104)”closet indexing….you’re paying a manager a fortune and he has 85% of his assets invested parallel to the indexes. If you have such a system, you’re being played for a sucker.”

(105)”Black-Scholes is a know-nothing system. If you know nothing about value — only price — then Black-Scholes is a pretty good guess at what a 90-day option might be worth. But the minute you get into longer periods of time, it’s crazy to get into Black-Scholes.”

(106)”Black-Scholes works for short-term options, but if it’s a long-term option and you think you know something [about the underlying asset], it’s insane to use Black-Scholes.”

(107)”It’s hard to predict what will happen with two brands in a market.? Sometimes they will behave in a gentlemanly way, and sometimes they’ll pound each other.? I know of no way to predict whether they’ll compete moderately or to the death.? If you could figure it out, you could make a lot of money.”

(108)”We’ve really made the money out of high quality businesses. In some cases, we bought the whole business. And in some cases, we just bought a big block of stock. But when you analyze what happened, the big money’s been made in the high quality businesses. And most of the other people who’ve made a lot of money have done so in high quality businesses.”

(109)”A lot of share-buying, not bargain-seeking, is designed to prop stock prices up. Thirty to 40 years ago, it was very profitable to look at companies that were aggressively buying their own shares. They were motivated simply to buy below what it was worth.”

(110)”There are two kinds of businesses: The first earns 12%, and you can take it out at the end of the year. The second earns 12%, but all the excess cash must be reinvested — there’s never any cash. It reminds me of the guy who looks at all of his equipment and says, “There’s all of my profit.” We hate that kind of business. “
(111)”There are actually businesses, that you will find a few times in a lifetime, where any manager could raise the return enormously just by raising prices—and yet they haven’t done it. So they have huge untapped pricing power that they’re not using. That is the ultimate no-brainer. … Disney found that it could raise those prices a lot and the attendance stayed right up.? So a lot of the great record of Eisner and Wells … came from just raising prices at Disneyland and Disneyworld and through video cassette sales of classic animated movies… At Berkshire Hathaway, Warren and I raised the prices of See’s Candy a little faster than others might have. And, of course, we invested in Coca-Cola—which had some untapped pricing power. And it also had brilliant management. So a Goizueta and Keough could do much more than raise prices. It was perfect.”

(112)”At Berkshire Hathaway we do not like to compete against Chinese manufacturers.”

(113)”Berkshire is in the business of making easy predictions ?If a deal looks too hard, the partners simply shelve it.”

(114)”We’re the tortoise that has outrun the hare because it chose the easy predictions.”

(115)”"Warren and I avoid doing anything that someone else at Berkshire can do better. You don’t really have a competency if you don’t know the edge of it.”

(116)”Understanding both the power of compound return and the difficulty of getting it is the heart and soul of understanding a lot of things.”?

(117)”Generally speaking, it can’t be good to be running a big current account deficit and a big fiscal deficit and have them both growing. You would be thinking the end there would be a comeuppance.” “[But] it isn’t as though all the other options look wonderful compared to the US. It gives me some feeling that what I regard as fiscal misbehavior on our part could go on some time without paying the price.”

(118)”We started from such a strong position. It’s not as if the alternatives are all so great. I can understand why people would rather invest in the? U.S. Do you want to be in Europe, where 12-13% of people are unemployed and most 28-year-olds are living at home and being paid by state to do it? Or be in Brazil or Venezuela with the political instability that you fear? It’s not totally irrational that? people still like the U.S., despite its faults. Whatever misbehavior there is could go on quite a long time without a price being paid.”

(119)”Almost all good businesses engage in ‘pain today, gain tomorrow’ activities.”

(120)”No CEO examining books today understands what the hell is going on.”

(121)”Generally speaking, if you’re counting on outside directors to act [forcefully to protect your interests as a shareholder, then you’re crazy].? As a general rule in? America, boards act only if there’s been a severe disgrace. My friend Joe was asked to be on the board of Northwestern Bell and he jokes that ‘it was the last thing they ever asked me.’?I think you get better directors when you get directors who don’t need the money. ?When it’s half your income and all your retirement, you’re not likely to be very independent.? But when you have money and an existing reputation that you don’t want to lose, then you’ll act more independently.”

(122)”If mutual fund directors are independent, then I’m the lead character in the Bolshoi Ballet.”

(123)”Of course I’m troubled by huge consumer debt levels – we’ve pushed consumer credit very hard in the US.? Eventually, if it keeps growing, it will stop growing. As Herb Stein said, “If something cannot go on forever, it will stop.”? When it stops, it may be unpleasant.? Other than Herb Stein’s quote, I have no comment.”

(124)”?I think it would be a great improvement if there were no D&O insurance . The counter-argument is that no-one with any money would serve on a board. But I think net net you’d be better off.”

(125)”We don’t care about quarterly earnings (though obviously we care about how the business is doing over time) and are unwilling to manipulate in any way to make some quarter look better.”

(126)”What we don’t like in modern capitalism is the expectations game. It’s not the kissing cousin of evil; it’s the blood brother.”

(127)”There are a lot of things we pass on. We have three baskets: in, out, and too tough…We have to have a special insight, or we’ll put it in the ‘too tough’ basket. All of you have to look for a special area of competency and focus on that.”

(128)”We have a history when things are really horrible of wading in when no one else will.”

(129)”We have monetized houses in this country in a way that’s never occurred before. Ask Joe how he bought a new Cadillac [and he’ll say] from borrowing on his house. We are awash in capital. [Being] awash is leading to very terrible behavior by credit cards and subprime lenders -a very dirty business, luring people into a disadvantageous position. It’s a new way of getting serfs, and it’s a dirty business. We have financial institutions, including those with big names, extending high-cost credit to the least able people. I find a lot of it revolting. Just because it’s a free market doesn’t mean it’s honorable.”

(130)”We don’t believe that markets are totally efficient and we don’t believe that widespread diversification will yield a good result.? We believe almost all good investments will involve relatively low diversification. Maybe 2% of people will come into our corner of the tent and the rest of the 98% will believe what they’ve been told.”

(131)”Efficient market theory [is]? a wonderful economic doctrine that had a long vogue in spite of the experience of Berkshire Hathaway. In fact one of the economists who won — he shared a Nobel Prize — and as he looked at Berkshire Hathaway year after year, which people would throw in his face as saying maybe the market isn’t quite as efficient as you think, he said, “Well, it’s a two-sigma event.” And then he said we were a three-sigma event. And then he said we were a four-sigma event. And he finally got up to six sigmas — better to add a sigma than change a theory, just because the evidence comes in differently.And, of course, when this share of a Nobel Prize went into money management himself, he sank like a stone.”

(132)”I know just enough about? thermodynamics to understand that if it takes too much fossil-fuel energy to create ethanol, that’s a very stupid way to solve an energy problem.”

(133)”It is entirely possible that you could use our mental models to find good IPOs to buy. There are countless IPOs every year, and I’m sure that there are a few cinches that you could jump on. But the average person is going to get creamed. So if you’re talented, good luck. IPOs are too small for us, or too high tech, so we won’t understand them. So, if Warren’s looking at them, I don’t know about it.”

我对刚刚IPO的公司也不感兴趣，主要是没足够时间和资料去搞懂。
(134)”Well envy/jealousy made, what, two out of the ten commandments? Those of you who have raised siblings you know about envy, or tried to run a law firm or investment bank or even a faculty? I’ve heard Warren say a half a dozen times, “It’s not greed that drives the world, but envy.”

(135)”Suppose, any one of you knew of a wonderful thing right now that you were overwhelmingly confident- and correctly so- would produce about 12% per annum compounded as far as you could see. Now, if you actually had that available, and by going into it you were forfeiting all opportunities to make money faster- there’re a lot of you who wouldn’t like that. But a lot of you would think, “What the hell do I care if somebody else makes money faster?” There’s always going to be somebody who is making money faster, running the mile faster or what have you. So in a human sense, once you get something that works fine in your life, the idea of caring terribly that somebody else is making money faster strikes me as insane.”  这里我看到两点：1.平常心地呆在自己能力圈内; 2. 12%是个可接受的年复合回报率。