Warren Buffet Quotes

Warren Buffet is my guru now. Here are his quotes and my interpretations in brackets:

"Chains of habit are too light to be felt until they are too heavy to be broken."
(It's hard to realize your bad habits and difficult to break them)

"Derivatives are financial weapons of mass destruction."

(Financial derivatives are pure speculation-a gamble.)

"I always knew I was going to be rich. I don't think I ever doubted it for a minute."
(Do not doubt yourself and your capabilities)

"I don't look to jump over 7-foot bars: I look around for 1-foot bars that I can step over."

(Set realistic goals; not over ambitious ones)

"I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years."

(Make long term investments-the kind of investments that are not largely affected by the market conditions)

"If a business does well, the stock eventually follows."

(Analyze the nature of the business and the financial statements rather look at the stock movements; as stock movements will follow/reflect whether the company makes loss or a profit)

If past history was all there was to the game, the richest people would be librarians.
(Do not look at past successes as indication of success in the future)

It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently.
(Be an individual of values)

It's better to hang out with people better than you. Pick out associates whose behavior is better than yours and you'll drift in that direction.
(Mix with people better than you as you will become a better person. Do not be afraid of feeling rejected or low)

Only when the tide goes out do you discover who's been swimming naked.
(How about I let you guess this one? :] )

Risk comes from not knowing what you're doing.
(Go for a sure win strategy)

Rule No.1: Never lose money. Rule No.2: Never forget rule No.1
(My favourite quote)

Someone's sitting in the shade today because someone planted a tree a long time ago
(Do not be afraid of making long term investments and be greedy of short term ones)

The smarter the journalists are, the better off society is. For to a degree, people read the press to inform themselves-and the better the teacher, the better the student body.
(You are what you read)

Wall Street is the only place that people ride to in a Rolls Royce to get advice from those who take the subway.

(Financially smart people are smart in their spendings)

Be fearful when others are greedy. Be greedy when others are fearful.

(One of his best quotes. "Be fearful when others are greedy" it means that when other people are busy buying up a certain stock; be aware because by the time you buy the stock, the stock price may have reached its peak and you may barely gain from there. "Be greedy when others are fearful" means that people will be fearful then sell their stock, which drives the prices down. This is when you should start being greedy and buy up the stocks at a low price. Don't give me the crap about worrying the company will go bankrupt and you will lose all the money you invested. Look at the long-term prospects. People start selling because of their fears when a certain news is being released. That's when prices will fall. That's when you should buy."

"Why not invest your assets in the companies you really like? As Mae West said, "Too much of a good thing can be wonderful".

"Wide diversification is only required when investors do not understand what they are doing."

"You do things when the opportunities come along. I've had periods in my life when I've had a bundle of ideas come along, and I've had long dry spells. If I get an idea next week, I'll do something. If not, I won't do a damn thing."

"You only have to do a very few things right in your life so long as you don’t do too many things wrong."

"It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price."

"Our favorite holding period is forever."

"Price is what you pay. Value is what you get."

"Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it."

"The rich invest in time, the poor invest in money."

"If you are in a poker game and after 20 minutes you don't know who the patsy is, then you’re the patsy."

"Beware of geeks bearing formulas."

"Never invest in a business you can’t understand."

"We've used derivatives for many, many years. I don't think derivatives are evil, per se, I think they are dangerous. ...So we use lots of things daily that are dangerous, but we generally pay some attention to how they're used. We tell the cars how fast they can go."

"I buy expensive suits. They just look cheap on me."