"Much success can be attributed to inactivity. Most investors cannot resist the temptation to constantly buy and sell." 

"When a management with a reputation for brilliance tackles a business with a 
poor reputation for fundamental economics, it is the reputation of the 
business that stays intact."

"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

"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 in a  Morningstar Interview

“A market downturn, doesn't bother us. For us and our long term investors, 
it is an opportunity to increase our ownership of great companies with great 
management at good prices. Only for short term investors and market timers 
is a correction not an opportunity." 

“What counts for most people in investing is not how much they know, but 
rather how realistically they define what they don't know. An investor needs 
to do very few things right as long as he or she avoids big mistakes.”

1992 Letter to Berkshire Hathaway shareholders

"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."

1997 Berkshire Hathaway Annual Meeting

“Obviously, every investor will make mistakes. But by confining himself to a relatively few, easy-to-understand cases, a reasonably intelligent, informed and diligent person can judge investment risks with a useful degree of accuracy.”

1993 Letter to Berkshire Hathaway shareholders

"It is our job to help our clients be fearful when others are greedy, and 
look at opportunities when others are fearful." 

"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 

"You pay a high price for a cheery consensus."  

"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 

“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." 

1985 Chairman's Letter to Shareholders

"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."

1981 Chairman's Letters to Shareholders

"The only way to be loved is to be loveable, which really irritates me." 

Warren Buffett speaking at the City Club in Seattle (July 21, 2001) 

"First, many in Wall Street - a community in which quality control is not 
prized - will sell investors anything they will buy." 

2000 Letter to Shareholders

"When they open that envelope, the first instruction is to take my pulse 
again." 

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."

"The fact that people will be full of greed, fear or folly is predictable. 
The sequence is not predictable." 

Warren Buffett, Financial Review, 1985

"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.

"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."

"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." 

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." 

1990 Chairman's Letter to Shareholders

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

"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

"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." 

BusinessWeek Interview June 25 1999

"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). " 

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 in a Morningstar Interview

"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."

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." 

Berkshire Hathaway 1998 Annual Meeting

"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

1998 Berkshire 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'?"

1987 Chairman's Letter to Shareholders

"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."

1997 Chairman's Letter to Shareholders

"The strategy (of portfolio concentration ) 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."

1993 Chairman's Letter to Shareholders

"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."

“What counts for most people in investing is not how much they know, but 
rather how realistically they define what they don't know. An investor needs 
to do very few things right as long as he or she avoids big mistakes.”

1992 Letter to Berkshire Hathaway shareholders

“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 Letter to Berkshire Hathaway shareholders

“We think diversification, as practiced generally, makes very little sense 
for anyone who knows what they're doing. Diversification serves as protection 
against ignorance. If you want to make sure that nothing bad happens to you 
relative to the market, you should own everything. There's nothing wrong with 
that. It's a perfectly sound approach for somebody who doesn't know how to 
analyze businesses.

"But if you know how to value businesses, it's crazy to own 50 stocks or 40 
stocks or 30 stocks, probably because there aren't that many wonderful 
businesses understandable to a single human being in all likelihood. To 
forego buying more of some super-wonderful business and instead put your 
money into #30 or #35 on your list of attractiveness just strikes Charlie and 
me as madness.”

1996 Berkshire Hathaway Annual Meeting

“The most important thing in terms of your circle of competence is not how 
large the area of it is, but how well you've defined the perimeter. If you 
know where the edges are, you're way better off than somebody that's got one 
that's five times as large but they get very fuzzy about the edges.”

“Warren Buffett Talks Business,” The University of North Carolina, Center for 
Public Television, Chapel Hill, 1995

“Our policy is to concentrate holdings. We try to avoid buying a little of 
this or that when we are only lukewarm about the business or its price. When 
we are convinced as to attractiveness, we believe in buying worthwhile 
amounts.”

1978 Letter to Berkshire Hathaway shareholders

“I put a heavy weight on certainty. If you do that, the whole idea of a risk 
factor doesn't make sense to me. Risk comes from not knowing what you're 
doing.”

“Buffett Talks Strategy with Students”, Omaha World-Herald 1994

“John Maynard Keynes, whose brilliance as a practicing investor matched his 
brilliance in thought, wrote a letter to a business associate, F. C. Scott, 
on August 15, 1934 that says it all: 'As time goes on, I get more and more 
convinced that the right method in investment is to put fairly large sums 
into enterprises which one thinks one knows something about and in the 
management of which one thoroughly believes. It is a mistake to think that 
one limits one's risk by spreading too much between enterprises about which 
one knows little and has no reason for special confidence… One's knowledge 
and experience are definitely limited and there are seldom more than two or 
three enterprises at any given time in which I personally feel myself 
entitled to put full confidence.”

1991 Letter to Berkshire Hathaway shareholders

“I made a study back when I ran an investment partnership of all our larger 
investments versus the smaller investments. The larger investments always did 
better than the smaller investments. There is a threshold of examination and 
criticism and knowledge that has to be overcome or reached in making a big 
decision that you can get sloppy about on small decisions. Somebody says 'I 
bought a hundred shares of this or that because I heard about it at a party 
the other night.' Well there is that tendency with small decisions to think 
you can do it for not very good reasons.”

“Warren Buffett Talks Business,” The University of North Carolina, Center for 
Public Television, Chapel Hill, 1995

“In our opinion, the real risk that an investor must assess is whether his 
aggregate after-tax receipts from an investment (including those he receives 
on sale) will, over his prospective holding period, give him at least as much 
purchasing power as he had to begin with, plus a modest rate of interest on 
that initial stake. Though this risk cannot be calculated with engineering 
precision, it can in some cases be judged with a degree of accuracy that is 
useful..."

“Thirty years ago, no one could have foreseen the huge expansion of the 
Vietnam War, wage and price controls, two oil shocks, the resignation of a 
president, the dissolution of the Soviet Union, a one-day drop in the Dow of 
508 points, or treasury bill yields fluctuating between 2.8 % and 17.4 %. 
But, surprise – none of these blockbuster events made the slightest dent in 
Ben Graham’s investment principles. Nor did they render unsound the 
negotiated purchases of fine businesses at sensible prices. Imagine the cost 
to us, then, if we had let a fear of the unknowns cause us to defer or alter 
the deployment of capital. Indeed, we have usually made our best
purchases when apprehensions about some macro event were at a peak. Fear is 
the foe of the faddist, but the friend of the fundamentalist. A different set 
of major shocks is sure to occur in the next 30 years. We will neither try to 
predict these nor profit from them. If we can identify businesses similar to 
those we have purchased in the past, external surprises will have little 
effect on our long-term results.”

Warren E. Buffett, March 7,1995

"Can you really explain to a fish what it's like to walk on land? One day on 
land is worth a thousand years of talking about it. And one day running a 
business has exactly the same kind of value."

Warren E. Buffett quoted in Fortune, April 11, 1988

“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."

2000 Letter to Shareholders

"We will reject interesting opportunities rather than over-leverage our 
balance sheet."

Warren Buffett, Berkshire Hathaway Owners Manual 

“View Mr. Market as having a disorder and being in a manic depressive state 
and take advantage of this state of disorder."