Warren Buffett: Individual businesses

“Charlie and I don’t think about the market. And Ben [Graham] didn’t very much. I think he made a mistake to occasionally try and place a value on it. We look at individual businesses. And we don’t think of stocks as little items that wiggle around on the paper and that have charts attached to them. We think of them as parts of businesses…. I know of no one that has been successful at…[making] a lot of money predicting the actions of the market itself. I know a lot of people who have done well picking businesses and buying them at sensible prices. And that’s what we’re hoping to do.”

—Warren Buffett. 

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Warren Buffett: Haystacks, not needles

“The speed of information really doesn’t make any difference to us. It’s the processing and finally coming to some judgment that actually has some utility…it’s a judgment about the price of a business or a part of a business, a security, versus what it’s essentially worth. And none of that involves anything to do, really, with quick information. It involves getting good information…. We’re not looking for needles in haystacks or anything of the sort…We like haystacks, not needles, basically. And we want it to shout at us.”

—Warren Buffett. 

Warren Buffett: No degree of difficulty factor

“One of the interesting things about investment is that there’s no degree of difficulty factor. I mean, if you’re going to go diving in the Olympics and try to win a gold medal, you get paid more, in effect, for certain kinds of dives than others because they’re more difficult. And they properly adjust for that factor. But in terms of investing, there is no degree of difficulty. If something is staring you right in the face and the easiest decision in the world, the payoff can be huge. And we get paid, not for jumping over 7-foot bars, but for stepping over 1-foot bars…. Now maybe we cast out too many things as being too hard and thereby narrow our universe. But I’d rather have the universe be…interpreted as being a little smaller than it really is, than being interpreted as larger than it is.”

—Warren Buffett. 

Warren Buffett: Avoid being wrong

“You don’t have to do — we’ve said this before — but you don’t have to do exceptional things to get exceptional results. And some people think that if you jump over a seven-foot bar that the ribbon they pin on you is going to be worth more money than if you step over a one-foot bar. And it just isn’t true in the investment world, at all…. The big thing to do is avoid being wrong.”

—Warren Buffett (1994 Berkshire Hathaway Annual Meeting).