Commonly referred to sayings of Warren Buffet:-

• The critical investment factor is determining the intrinsic value of a
   business and paying a fair or bargain price.
• Never invest in a business you cannot understand.
• Risk can be greatly reduced by concentrating on only a few holdings.
• Stop trying to predict the direction of the stock market, the economy,
   interest rates, or elections.
• Buy companies with strong histories of profitability and with a dominant
   business franchise.
• You are neither right nor wrong because the crowd disagrees with you.
   You are right because your data and reasoning are right.
• Be fearful when others are greedy and greedy only when others are  
   fearful.
• Unless you can watch your stock holding decline by 50% without  
   becoming panic-stricken, you should not be in the stock market.
• It is optimism that is the enemy of the rational buyer.
• As far as you are concerned, the stock market does not exist. Ignore it.
• The ability to say “no” is a tremendous advantage for an investor.
• Much success can be attributed to inactivity. Most investors cannot resist
   the temptation to constantly buy and sell.
• Lethargy, bordering on sloth, should remain the cornerstone of an
   investment style.
• An investor should act as though he had a lifetime decision card with just
   twenty punches on it.
• Wild swings in share prices have more to do with the “lemming-like”
   behavior of institutional investors than with the aggregate returns of
   the  company they own.
• As a group, lemmings have a rotten image, but no individual lemming has
   ever received bad press.
• An investor needs to do very few things right as long as he or she
   avoids big mistakes.
• “Turn-arounds” seldom turn.
• Is management rational?
• Is management candid with the shareholders?
• Does management resist the institutional imperative?
• Do not take yearly results too seriously. Instead, focus on four- or
   five-year averages.
• Focus on return on equity, not earnings per share.
• Calculate “owner earnings” to get a true reflection of value.
• Look for companies with high profit margins.
• Growth and value investing are joined at the hip.
• The advice “you never go broke taking a profit” is foolish.
• It is more important to say “no” to an opportunity than to say “yes.”
• Always invest for the long term.
• Does the business have favorable long-term prospects?
• It is not necessary to do extraordinary things to get extraordinary
   results.
• Remember that the stock market is manic-depressive.
• Buy a business, don’t rent stocks.
• Does the business have a consistent operating history?
• Wide diversification is only required when investors do not understand
   what they are doing.
• An investor should ordinarily hold a small piece of an outstanding
   business with the same tenacity that an owner would exhibit if he
   owned all of that business.


Edited by kanagala - 21/Oct/2008 at 5:06am