Warren Buffett: Pin lies in wait for every bubble

033student

Image by Tulane Publications via Flickr

“A pin lies in wait for every bubble. And when the two eventually meet, a new wave of investors learns some very old lessons: First, many in Wall Street – a community in which quality control is not prized – will sell investors anything they will buy. Second, speculation is most dangerous when it looks easiest.” Warren Buffett.

Warren Buffett: Impious

“Questioning GAAP figures may seem impious to some. After all, what are we paying the accountants for if it is not to deliver us the “truth” about our business. But the accountants’ job is to record, not to evaluate. The evaluation job falls to investors and managers.” Warren Buffett.

Warren Buffett: Fourth Law of Motion

“Long ago, Sir Isaac Newton gave us three laws of motion, which were the work of genius. But Sir Isaac’s talents didn’t extend to investing: He lost a bundle in the South Sea Bubble, explaining later, ‘I can calculate the movement of the stars, but not the madness of men.’ If he had not been traumatized by this loss, Sir Isaac might well have gone on to discover the Fourth Law of Motion: For investors as a whole, returns decrease as motion increases.” Warren Buffett

Warren Buffett: Pickpocket of enterprise

“One of the ironies of the stock market is the emphasis on activity. Brokers, using terms such as ‘marketability’ and ‘liquidity‘ sing the praises of companies with high share turnover… but investors should understand that what is good for the croupier is not good for the customer. A hyperactive stock market is the pick pocket of enterprise.”

—Warren Buffett.

Reblog this post [with Zemanta]