Words of Wisdom from Warren Buffett

David L. Johanson |

A well-designed financial plan is necessary for successful investing, but you must also have the discipline to stay on course, rebalance, and tax-manage.  

Unfortunately, most investors do not have a written plan.  Emotions such as greed or envy in bull markets, and fear or panic in bear markets, can cause investors to discard even the most well-designed plans.

Here are some of our favorite quotes by Warren Buffett, arguably the best investor of this generation.  Consider utilizing his tips to start developing your long-term investment strategy.

  • On hiring“Somebody once said that in looking for people to hire, you look for the three qualities: integrity, intelligence, and energy.  And, if they don’t have the first, the other two will kill you.”
  • On market predictions“I have never met a man who could forecast the market.”
  • On giving your kids a big inheritance“The idea that you get a lifetime supply of food stamps based on coming out of the right womb strikes at my idea of fairness.”
  • On stocks with good histories“The investor of today does not profit from yesterday’s growth.”
  • On how to view stocks“Look at stocks as businesses.  Look for businesses you understand, run by people you trust and are comfortable with, and leave them alone for a long time.”
  • On ethical investment management“The investment manager must put his client first in everything he does.”
  • On thinking long term“I wouldn’t buy any stocks I would not be happy owning if they stopped trading it for three years.”
  • On predicting markets“The fact that people will be full of greed, fear, or folly is predictable.  The sequence is not predictable.”
  • On the limitations of wealth“Money, to some extent, sometimes lets you be in more interesting environments.  But, it can’t change how many people love you or how healthy you are.”
  • On the ideal investor personality“The most important quality for an investor is temperament, not intellect.  You don’t need tons of IQ in this business.  You don’t have to be able to play three-dimensional chess or duplicate bridge.  You need a temperament that derives great pleasure neither from being with the crowd nor against the crowd.”
  • On risk“Risk is not knowing what you’re doing.”
  • On long-term thinking“Our favorite holding period is forever.”