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""Like most trends, at the beginning it's driven by fundamentals, at some point speculation takes over. What the wise man does in the beginning, the fool does in the end."
- Warren Buffett; 2006 Berkshire Hathaway annual meeting

"Too often, executive compensation in the U.S. is ridiculously out of line with performance. That won't change, moreover, because the deck is stacked against investors when it comes to the CEO's pay."
- Warren Buffett; 2005 Letter to Shareholders

"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."
- Warren Buffett (quote from Wikiquote)

"Investment managers frenetically trade long-term securities on a very short-term basis...hundreds of billions of dollars are invested in virtual or complete ignorance of underlying business fundamentals, often using indexing strategies designed to avoid significant underperformance at the cost of assured mediocrity."
- Seth Klarman, Margin of Safety

"The tough years for us were '98 and '99, when we were only making a little bit of money, and everybody else out there was making tons of money for their clients. It got easier as the market started to come down and our stocks were going up. The cheap stocks went up; expensive stocks went down. That convergence was great for value investors, including the Oakmark family, from 2000 through about mid-2003. "
- Bill Nygren, July 2004
Fund manager of Oakmark which has achieved a 20% average annual rate of return since 1996.

"I talk with some aggressive growth managers I know. I asked them when this thing (the tech meltdown) was blowing off, why didn't you get out of that crap. They said, 'Then we'd underperform relative to the market.' And if you underperform, I assume you'll get redeemed (in that shareholders redeem, or sell, their fund shares) right? They say, 'Right.' So let me get this straight: You own this crap, you get destroyed and you get redeemed anyway."
- Bob Rodriguez, April 2004
Fund manager of FPA Capital Fund which has achieved a 20-year annual return of 17.6%

"Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good results."
- Warren Buffett, 1974 Letter to Shareholders

"Despite three years of falling prices, which have significantly improved the attractiveness of common stocks, we still find very few that even mildly interest us. That dismal fact is testimony to the insanity of valuations reached during The Great Bubble. Unfortunately, the hangover may prove to be proportional to the binge."
- Warren Buffett, March 2003

"From where did this loony idea emerge that a cowlicked midwesterner who buys stock in companies that turn out syrupy fizz water, bland ice milk and lefty newspapers should thus be known as a Value Investor?...Tech will roar back. It will continue its merry dash toward infinite powers at zero cost. It will transform all in its path. Markets may (and just did) correct for overvalue, but they can't abjure the laws of physics... Bottom line: In such an explosive economy, there will be no safe harbors for traditional 'value' stocks."
- Richard Karlgaard, Publisher of Forbes Magazine in May 2000 just before the tech bubble burst

"I like to go for cinches. I like to shoot fish in a barrel. But I like to do it after the water has run out."
- Warren Buffett, Oct. 2003 talking with Wharton MBA students

"The important thing is to keep playing, to play against weak opponents and to play for big stakes."
- Warren Buffett, Nov. 2002 talking with students at Gaston Hall

"Sometimes you're outside your core competency. Level 3 is one of those times but I've made a bet on the people and I feel I understand the people. There was a time when people made a bet on me."
- Warren Buffett, Oct. 2002 when questioned about his investment in Level 3

"The definition of hell in the legal system is: endless due process and no justice; (in the corporate world) it would be: endless due diligence and no horse sense."
- Charlie Munger, 2002 Berkshire Hathaway Shareholder Meeting

"This time Congress should listen to the slim accountants. The logic behind their thinking is simple:

"1) If options aren't a form of compensation, what are they?

"2) If compensation isn't an expense, what is it?

"3) And if expenses shouldn't go into the calculation of earnings, where in the world should they go?"
- Warren Buffett

"We don't use price-to-earnings multiples anymore at Cramer Berkowitz. If we talk about price-to-book, we have already gone astray. If we use any of what Graham and Dodd teach us, we wouldn't have a dime under management."
- James Cramer at the height of the dot com frenzy

"The only way to be loved is to be loveable, which really irritates me."
- Warren Buffett, speaking at the CityClub in Seattle (July 21, 2001)

"We've had public companies in the past in that business and they bleed. We've got a lot more blood than they do."
- Warren Buffett talking about Executive Jet in a rare show of teeth at the Berkshire Hathaway annual meeting

"First, many in Wall Street - a community in which quality control is not prized - will sell investors anything they will buy."
- Warren Buffett, 2000 Letter to Shareholders

"The whole concept of dividing it up into 'value' and 'growth' strikes me as twaddle. It's convenient for a bunch of pension 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."
- Charlie Munger

"When they open that envelope, the first instruction is to take my pulse again."
- Warren Buffett, 2001 Annual Meeting after mentioning that the instructions of his succession are sealed in an envelope at headquarters.

"Charlie and I decided long ago that in an investment lifetime it's too hard to make hundreds of smart decisions. That judgment became ever more compelling as Berkshire's capital mushroomed and the universe of investments that could significantly affect our results shrank dramatically. Therefore, we adopted a strategy that required our being smart - and not too smart at that - only a very few times. Indeed, we'll now settle for one good idea a year. (Charlie says it's my turn.)"
- Warren Buffett

"Somewhere in the middle of the Bull market the first common-stock flotations make their appearance. These are priced not unattractively, and some large profits are made by the buyers of the early issues. As the market rise continues, this brand of financing grows more frequent; the quality of the companies becomes steadily poorer; the prices asked and obtained verge on exorbitant. One fairly dependable sign of the approaching end of a bull swing is the fact that new common stocks of small and nondescript companies are offered at prices somewhat higher than the current level for many medium-sized companies with a long market history. The heedlessness of the public and the willingness of the selling organization to sell whatever may be profitably sold can have only one result - price collapse."
- Benjamin Graham

"When companies start measuring success by clicks that doesn't compute to us, the only thing that computes to us is cash."
- Bruce Berkowitz, Fairholme Funds

"The analysts and the brokers. They don't know anything. Why do they always downgrade stocks after the bad earnings come out? Where's the guy that downgrades them before the bad earnings come out? That's the smart guy. But I don't know any of them. They're rare, they're very rare. They're rarer than Jesse Jackson at a Klan meeting."
- Marc Perkins, 2000 TheStreet.com

"Volatility is a symptom that people have no idea of the underlying value--that they have stopped playing the asset game. They're not buying because it's a company with certain attributes. They're buying because the price is rising. People are playing games not related to any concept at all of what the long-term value of the enterprise is. And they know it."
- Jeremy Grantham, Grantham, Mayo, Van Otterloo & Co.

"The fact that people will be full of greed, fear or folly is predictable. The sequence is not predicatable."
- Warren Buffett, Financial Review, 1985

"When you mix raisins with turds, they are still turds."
- Charlie Munger

"All intelligent investing is value investing - to acquire more than you are paying for. Investing is where you find a few great companies and then sit on your ass.
- Charlie Munger at Berkshire Hathaway's 2000 Shareholder Meeting

"Opportunity does not knock, it presents itself when you beat down the door."
- Kyle Chandler

"People who soar are those who refuse to sit back, sigh and wish things would change."
- Charles Swindoll

"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."
- Charlie Munger at the 1999 Wesco Annual Meeting

"The secret now is to be disciplined. It's so easy to get carried away with things valued on the hereafter."
- Alan Patricof, founder of Patricof & Co.

"Those who attended (the annual meeting) last year saw your Chairman pitch to Ernie Banks.

"This encounter proved to be the titanic duel that the sports world had long awaited. After the first few pitches...I fired a brushback at Ernie just to let him know who was in command. Ernie charged the mound, and I charged the plate. But a clash was avoided because we became exhausted before reaching each other."
- Warren Buffett, 1999 Letter to Shareholders

"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."
- Warren Buffett, 1999 Berkshire Hathaway Annual Meeting

"When it comes to the future, there are three kinds of people: those who make it happen, those who let it happen, and those who wonder what happened."
- John M. Richardson, Jr.

"I am out of step with present conditions. When the game is no longer played your way, it is only human to say the new approach is all wrong, bound to lead to trouble, and so on. On one point, however, I am clear. I will not abandon a previous approach whose logic I understand ( although I find it difficult to apply ) even though it may mean foregoing large, and apparently easy, profits to embrace an approach which I don't fully understand, have not practiced successfully, and which possibly could lead to substantial permanent loss of capital."
- Warren Buffett in a letter to his partners in the stock market frenzy of 1969.

"A conventional valuation which is established as the outcome of the mass psychology of a large number of ignorant individuals is liable to change violently as the result of a sudden fluctuation of opinion due to factors which do not really make much difference to the prospective yield; since there will be no strong roots of conviction to hold it steady."
- John Maynard Keynes, 1935 The State of Long-Term Expectation

"We've long felt that the only value of stock forecasters is to make fortune tellers look good. Even now, Charlie and I continue to believe that short-term market forecasts are poison and should be kept locked up in a safe place, away from children and also from grown-ups who behave in the market like children."
- Warren Buffett

"I just don't see anything available that gives any reasonable hope of delivering such a good year and I have no desire to grope around, hoping to 'get lucky' with other people's money. I am not attuned to this market environment, and I don't want to spoil a decent record by trying to play a game I don't understand just so I can go out a hero."
- Warren Buffett

"It always seemed, and still seems, ridiculously simple to say that if one can acquire a diversified group of common stocks at a price less than the applicable net current assets alone - after deducting all prior claims, and counting as zero the fixed and other assets - the results should be quite satisfactory."
- Benjamin Graham, The Intelligent Investor

"The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company and, above all, the durability of that advantage."
- Warren Buffett, July 1999 at Herb Allen's Sun Valley, Idaho Retreat

"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."
- Warren Buffett, 1990 Chairman's Letter to Shareholders

"I don't read economic forecasts. I don't read the funny papers."
- Warren Buffett

"There was nothing wrong with these ideas, except that it was almost impossible not to carry them too far. With encouragement from the past and a rosy prospect in the future, the buyers of 'growth stocks' were certain to lose their sense of proportion and pay excess prices. For no clear-cut arithmetic sets a limit to the present value of a constantly increasing earning power. Such issues could become worth any value set upon them by an optimistic market."
- Benjamin Graham

"We have been trying to point out that this concept of an indefinitely favorable future is dangerous, even if it is true; because even if it is true you can easily overvalue the security, since you make it worth anything you want it to be worth. Beyond this, it is particularly dangerous too, because sometimes your ideas of the future turn out to be wrong. Then you have paid an awful lot for a future that isn't there. Your position then is pretty bad."
- Benjamin Graham

"Set your expectations high; find men and women whose integrity and values you respect; get their agreement on a course of action; and give them your ultimate trust."
- John Akers

"Yes, risk-taking is inherently failure-prone. Otherwise, it would be called sure-thing taking."
- Tim McMahon

"Pick battles big enough to matter, small enough to win."
- Jonathan Kozol

"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!'"
- Warren Buffett
1999 Berkshire Hathaway Annual Meeting

"Success in investing doesn't correlate with I.Q. once you're above the level of 25. Once you have ordinary intelligence, what you need is the temperament to control the urges that get other people into trouble in investing."
- Warren Buffett
BusinessWeek Interview
June 25 1999

"Based on my own personal experience - both as an investor in recent years and an expert witness in years past - rarely do more than three or four variables really count. Everything else is noise."
- Marty Whitman

"Not everything that can be counted counts, and not everything that counts can be counted."
- Albert Einstein (1879-1955)

"I was suffering from my chronic delusion that one good share is safer than ten bad ones, and I am always forgetting that hardly anyone else shares this particular delusion."
- John Maynard Keynes, 1942
contributed by Paul Nelson

"Our future rates of gain will fall far short of those achieved in the past. Berkshire's capital base is now simply too large to allow us to earn truly outsized returns. If you believe otherwise, you should consider a career in sales but avoid one in mathematics (bearing in mind that there are really only three kinds of people in the world: those who can count and those who can't). "
- Warren Buffett, 1998 Chairman's Letter to Shareholders

"There are all kinds of businesses that Charlie and I don't understand, but that doesn't cause us to stay up at night. It just means we go on to the next one, and that's what the individual investor should do."
- Warren Buffett, Morningstar Interview

"Many are looking for technical corrective reactions from time to time, but do not expect these to disturb the upward trend for any prolonged period."
- Wall Street Journal
September 9, 1929
(months before the worst disaster in financial history)

"Investors making purchases in an overheated market need to recognize that it may often take an extended period for the value of even an outstanding company to catch up with the price they paid."
- Warren Buffett
Berkshire Hathaway 1998 Annual Meeting

"We don't get paid for activity, just for being right. As to how long we'll wait, we'll wait indefinitely."
- Warren Buffett, 1998 Berkshire Hathaway Annual Meeting

"Thousands of experts study overbought indicators, oversold indicators, head-and-shoulder patterns, put-call ratios, the Fed's policy on money supply, foreign investment, the movement of the constellations through the heavens, and the moss on oak trees, and they can't predict markets with any useful consistency, any more than the gizzard squeezers could tell the Roman emperors when the Huns would attack."
- Peter Lynch, One Up On Wall Street

"There are 60,000 economists in the U.S., many of them employed full-time trying to forecast recessions and interest rates, and if they could do it successfully twice in a row, they'd all be millionaires by now...as far as I know, most of them are still gainfully employed, which ought to tell us something."
- Peter Lynch, One Up On Wall Street

"Time is the enemy of the poor business and the friend of the great business. If you have a business that's earning 20%-25% on equity, time is your friend. But time is your enemy if your money is in a low return business."
- Warren Buffett, 1998 Berkshire Annual Meeting

"Well, the questioner came from Singapore which has perhaps the best economic record in the history of developing an 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. "
- Charlie Munger, 1997 Berkshire Hathaway Annual Meeting

"Ben's Mr. Market allegory may seem out-of-date in today's investment world, in which most professionals and academicians talk of efficient markets, dynamic hedging and betas. Their interest in such matters is understandable, since techniques shrouded in mystery clearly have value to the purveyor of investment advice. After all, what witch doctor has ever achieved fame and fortune by simply advising 'Take two aspirins'?"
- Warren Buffett, 1987 Chairman's Letter to Shareholders

"We will reject interesting opportunities rather than over-leverage our balance sheet."
- Warren Buffett, Berkshire Hathaway Owners Manual

"We attracted a lot of market timers and asset allocators. I don't need those goddamn amateurs in my fund."
- Martin Whitman, Morningstar Article

"If you expect to be a net saver during the next 5 years, should you hope for a higher or lower stock market during that period?
"Many investors get this one wrong. Even though they are going to be net buyers of stocks for many years to come, they are elated when stock prices rise and depressed when they fall.
"This reaction makes no sense. Only those who will be sellers of equities in the near future should be happy at seeing stocks rise. Prospective purchasers should much prefer sinking prices."
- Warren Buffett, 1997 Chairman's Letter to Shareholders

"In the short run, the market is a voting machine but in the long run it is a weighing machine."
- Benjamin Graham

"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."
- Warren Buffett, 1993 Chairman's Letter to Shareholders

"An irrisistable footnote: in 1971, pension fund managers invested a record 122% of net funds available in equities - at full prices they couldn't buy enough of them. In 1974, after the bottom had fallen out, they committed a then record low of 21% to stocks."
- Warren Buffett, 1978 Chairman's Letter to Shareholders

"I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful."
- Warren Buffett lecturing to a group of students at Columbia U. He was 21 years old.

Buffett: Don't you think Dairy Queen is more important than that? [Warren Buffett's question to Bill Gates after Bill explained why he had the best job; Berkshi re Hathaway bought International Dairy Queen last fall, for $585 million.]
Gates: You can manage Dairy Queen, Warren. I'll go and buy the Dilly Bars.
Buffett: We'll raise the price when you come.
- Warren Buffett and Bill Gates speaking to a group of students at the University of Washington (1998)

"Of the 2,692 diversified stock mutual funds tracked by Lipper Analytical Services, only 134 have beaten the S&P 500 this year."
- USA Today; June 18, 1998

"We have tried occasionally to buy toads at bargain prices with results that have been chronicled in past reports. Clearly our kisses fell flat. We have done well with a couple of princes - but they were princes when purchased. At least our kisses didn't turn them into toads. And, finally, we have occasionally been quite successful in purchasing fractional interests in easily-identifiable princes at toad-like prices."
- Warren Buffett, 1981 Chairman's Letters to Shareholders

"When returns on capital are ordinary, an earn-more-by-putting-up-more record is no great managerial achievement. You can get the same result personally while operating from your rocking chair. just quadruple the capital you commit to a savings account and you will quadruple your earnings. You would hardly expect hosannas for that particular accomplishment. Yet, retirement announcements regularly sing the praises of CEOs who have, say, quadrupled earnings of their widget company during their reign - with no one examining whether this gain was attributable simply to many years of retained earnings and the workings of compound interest."
- Warren Buffett, 1985 Chairman's Letter to Shareholders

"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..."
- Warren Buffett, 1997 Berkshire Hathaway Annual Meeting

"If you're an investor, you're looking on what the asset is going to do, if you're a speculator, you're commonly focusing on what the price of the object is going to do, and that's not our game."
- Warren Buffett, 1997 Berkshire Hathaway Annual Meeting

"I have owned one stock since 1969, two since 1988 and one I started buying in 1986 or so. That's my portfolio. Six stocks. I once owned 17, but that was way too much."
- Philip Fisher, Forbes

"The stock market is filled with individuals who know the price of everything, but the value of nothing."
- Philip Fisher, Common Stocks Uncommon Profits