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w w w . t i c o n l i n e . c o m |
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THE QUOTE ARCHIVES |
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The following is a listing of some of the more interesting and colourful quotes I've found during my readings. |
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"There's no reason we should become fearful if a stock goes down. If a stock goes down 50%, I'd look forward to it. In fact, I would offer you a significant sum of money if you could give me the opportunity for all of my stocks to go down 50% over the next month." "If you have more than 120 or 130 I.Q. points, you can afford to give the rest away. You don't need extraordinary intelligence to succeed as an investor." "Think about it a little bit more and you'll agree with me,
because you're smart and I'm right"
"Performance comes and goes, but costs roll on forever." "The four most expensive words in the English language
are, 'This time it's different.'" "Like most trends, at the beginning it's
driven by fundamentals, at some point speculation
takes over. What the wise man does in the beginning,
the fool does in the end."
"Too often, executive compensation in the U.S.
is ridiculously out of line with performance. That
won't change, moreover, because the deck is stacked
against investors when it comes to the CEO's pay."
"The most important quality for an investor
is temperament, not intellect... You need a
temperament that neither derives great pleasure
from being with the crowd or against the crowd." "Investment managers frenetically trade long-term
securities on a very short-term basis...hundreds of
billions of dollars are
invested in virtual or complete ignorance of
underlying business fundamentals, often
using indexing strategies designed to avoid
significant underperformance at the cost
of assured mediocrity." "The tough years for us were '98 and '99, when we were
only making a little bit of money, and everybody else out there
was making tons of money for their clients. It got easier as the
market started to come down and our stocks were going up. The
cheap stocks went up; expensive stocks went down. That
convergence was great for value investors, including the
Oakmark family, from 2000 through about mid-2003.
" "I talk with some aggressive growth managers I know.
I asked them when this thing (the tech meltdown) was blowing
off, why didn't you get out of that crap. They said,
'Then we'd underperform relative to the market.' And if you
underperform, I assume you'll get redeemed (in that
shareholders redeem, or sell, their fund shares) right?
They say, 'Right.' So let me get this straight: You own
this crap, you get destroyed and you get redeemed anyway." "Never count on making a good sale. Have the
purchase price be so attractive that even a mediocre
sale gives good results." "Despite three years of falling prices,
which have significantly improved the attractiveness
of common stocks, we still find very few that even
mildly interest us. That dismal fact is testimony
to the insanity of valuations reached during The
Great Bubble. Unfortunately, the hangover may prove
to be proportional to the binge." "From where did this loony idea emerge that a cowlicked
midwesterner who buys stock in companies that turn out
syrupy fizz water, bland ice milk and lefty newspapers
should thus be known as a Value Investor?...Tech will roar
back. It will continue its merry dash toward infinite powers
at zero cost. It will transform all in its path. Markets may
(and just did) correct for overvalue, but they can't abjure
the laws of physics... Bottom line: In such an explosive
economy, there will be no safe harbors for traditional
'value' stocks." "I like to go for cinches. I like to shoot fish in a
barrel. But I like to do it after the water has run out." "The important thing is to keep playing, to play against weak
opponents and to play for big stakes." "Sometimes you're outside your core competency.
Level 3 is one of those times but I've made a bet on the
people and I feel I understand the people. There was a time
when people made a bet on me."
"The definition of hell in the legal system is:
endless due process and no justice; (in the corporate
world) it would be: endless due diligence and no
horse sense."
"This time Congress should listen to the slim accountants. The logic behind their thinking is simple: "1) If options aren't a form of compensation, what are they? "2) If compensation isn't an expense, what is it? "3) And if expenses shouldn't go into the calculation of earnings, where in the world should they go?"
"We don't use price-to-earnings multiples anymore at Cramer
Berkowitz. If we talk about price-to-book, we have already
gone astray. If we use any of what Graham and Dodd teach us,
we wouldn't have a dime under management."
"The only way to be loved is to be loveable, which really irritates me."
"We've had public companies in the past in that business
and they bleed. We've got a lot more blood than they do."
"First, many in Wall Street - a community in which quality control
is not prized - will sell investors anything they will buy."
"The whole concept of dividing it up into 'value' and 'growth'
strikes me as twaddle. It's convenient for a bunch of pension fund
consultants to get fees prattling about and a way for one advisor
to distinguish himself from another. But, to me, all intelligent
investing is value investing."
"When they open that envelope, the first instruction is to take my
pulse again."
"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. (Charlie says it's my turn.)"
"Somewhere in the middle of the Bull market the
first common-stock flotations make their appearance.
These are priced not unattractively, and some large
profits are made by the buyers of the early issues.
As the market rise continues, this brand of financing
grows more frequent; the quality of the companies
becomes steadily poorer; the prices asked and
obtained verge on exorbitant. One fairly dependable
sign of the approaching end of a bull swing is the
fact that new common stocks of small and nondescript
companies are offered at prices somewhat higher than
the current level for many medium-sized companies
with a long market history. The heedlessness of the
public and the willingness of the selling organization
to sell whatever may be profitably sold can have
only one result - price collapse."
"When companies start measuring success by clicks that doesn't
compute to us, the only thing that computes to us is cash."
"The analysts and the brokers. They don't know anything. Why do they always
downgrade stocks after the bad earnings come out?
Where's the guy that downgrades them before the bad
earnings come out? That's the smart guy. But I don't
know any of them. They're rare, they're very rare.
They're rarer than Jesse Jackson at a Klan meeting."
"Volatility is a symptom that people have no idea of the
underlying value--that they have stopped playing the asset game. They're not
buying because it's a company with certain attributes. They're buying because the
price is rising. People are playing games not related to any concept at all of what
the long-term value of the enterprise is. And they know it."
"The fact that people will be full of greed, fear or folly is predictable.
The sequence is not predicatable."
"When you mix raisins with turds, they are still turds."
"All intelligent investing is value investing - to acquire more than you are
paying for. Investing is where you find a few great companies and then sit
on your ass.
"Opportunity does not knock, it presents itself when you beat down the door."
"People who soar are those who refuse to sit back, sigh and wish things
would change."
"REITs are way more suitable for individual shareholders than for corporate
shareholders. And Warren has enough residue from his old cigar-butt
personality that when people became disenchanted with the REITs and the
market price went down to maybe a 20% discount from what the companies
could be liquidated for, he bought a few shares with his personal money.
So it's nice that Warren has a few private assets with which to pick
up cigar butts in memory of old times - if that's what keeps him amused."
"The secret now is to be disciplined. It's so easy to get carried away with things
valued on the hereafter."
"Those who attended (the annual meeting) last year saw your Chairman pitch to Ernie Banks. "This encounter proved to be the titanic duel that the sports world
had long awaited. After the first few pitches...I fired a brushback
at Ernie just to let him know who was in command. Ernie charged the
mound, and I charged the plate. But a clash was avoided because we
became exhausted before reaching each other."
"We're more comfortable in that kind of business. It means we miss
a lot of very big winners. But we wouldn't know how to pick
them out anyway. It also means we have very few big losers - and
that's quite helpful over time. We're perfectly willing to trade
away a big payoff for a certain payoff."
"When it comes to the future, there are three kinds of people:
those who make it happen,
those who let it happen, and those who wonder what happened."
"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."
"A conventional valuation which is established as the outcome of the mass psychology
of a large number of ignorant individuals is liable to change violently as the result of a
sudden fluctuation of opinion due to factors which do not really make much difference
to the prospective yield; since there will be no strong roots of conviction to hold it
steady."
"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."
"I just don't see anything available that gives any reasonable hope of
delivering such a good year and I have no desire to grope around, hoping to
'get lucky' with other people's money. I am not attuned to this market
environment, and I don't want to spoil a decent record by trying to play a
game I don't understand just so I can go out a hero."
"It always seemed, and still seems, ridiculously simple to say that if
one can acquire a diversified group of common stocks at a price less
than the applicable net current assets alone - after deducting all prior
claims, and counting as zero the fixed and other assets - the results
should be quite satisfactory."
"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."
"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."
"I don't read economic forecasts. I don't read the funny papers."
"There was nothing wrong with these ideas, except that it was almost
impossible not to carry them too far. With encouragement from the past
and a rosy prospect in the future, the buyers of 'growth stocks' were
certain to lose their sense of proportion and pay excess prices.
For no clear-cut arithmetic sets a limit to the present value of a
constantly increasing earning power. Such issues could become worth
any value set upon them by an optimistic market."
"We have been trying to point out that this concept of an indefinitely favorable future is dangerous, even if it is true; because even if it is true you can easily overvalue the security, since you make it worth anything you want it to be worth. Beyond this, it is particularly dangerous too, because sometimes your ideas of the future turn out to be wrong. Then you have paid an awful lot for a future that isn't there. Your position then is pretty bad."
"Set your expectations high; find men and women whose integrity and values
you respect; get their agreement on a course of action; and give them
your ultimate trust."
"Yes, risk-taking is inherently failure-prone. Otherwise, it would be
called sure-thing taking."
"Pick battles big enough to matter, small enough to win."
"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!'"
"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."
"Based on my own personal experience - both as an investor in recent
years and an expert witness in years past - rarely do more than
three or four variables really count. Everything else is noise."
"Not everything that can be counted counts, and not everything that
counts can be counted."
"I was suffering from my chronic delusion that one good
share is safer than ten bad ones, and I am always
forgetting that hardly anyone else shares this particular
delusion."
"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). "
"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."
"Many are looking for technical corrective
reactions from time to time, but do not expect these to
disturb the upward trend for any prolonged period."
"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."
"We don't get paid for activity, just for being
right. As to how long we'll wait, we'll wait
indefinitely."
"Thousands of experts study overbought
indicators, oversold indicators, head-and-shoulder patterns,
put-call ratios, the Fed's policy on money supply, foreign
investment, the movement of the constellations through the
heavens, and the moss on oak trees, and they can't predict
markets with any useful consistency, any more than the gizzard
squeezers could tell the Roman emperors when the Huns would
attack."
"There are 60,000 economists in the U.S., many of them
employed full-time trying to forecast recessions and interest
rates, and if they could do it successfully twice in a row,
they'd all be millionaires by now...as far as I know, most of
them are still gainfully employed, which ought to tell us
something."
"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." "Well, the questioner came from Singapore which has
perhaps the best economic record in the history of developing an
economy and therefore he referred to 15% per annum as
modest. It's not modest--it's arrogant. Only someone from
Singapore would call it modest. " "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'?" "We will reject interesting opportunities rather than over-leverage our balance sheet."
"We attracted a lot of market timers and asset allocators. I don't need those goddamn
amateurs in my fund." "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? "In the short run, the market is a voting machine but
in the long run it is a weighing machine." "The strategy 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." "An irrisistable footnote: 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." "I will tell you how to become rich. Close the doors.
Be fearful when others are greedy. Be greedy when others are fearful." Buffett: Don't you think Dairy Queen is more important than that?
[Warren Buffett's question to Bill Gates after Bill explained why he had the best job; Berkshi
re Hathaway bought International Dairy Queen last fall, for $585 million.] "Of the 2,692 diversified stock mutual funds tracked by Lipper Analytical Services, only 134 have beaten the S&P 500 this year." "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." "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." "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..." "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." "I have owned one stock since 1969, two since 1988
and one I started buying in 1986 or so. That's my portfolio.
Six stocks. I once owned 17, but that was way too much." "The stock market is filled with individuals who know the
price of everything, but the value of nothing." |
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