As the global economic outlook darkens and doom and gloom once again fill the news headlines, I thought it would be rather timely to reflect on some of the wisdom offered by the oracle of Omaha.
Here are my top 10 Warren Buffett Quotes:
1. “investing is forgoing consumption now in order to have the ability to consume more at a later date.” (2011 Letter to Shareholders)
2. “You only learn who has been swimming naked when the tide goes out.” (2007 Letter to Shareholders)
3. “we much prefer owning a non-controlling but substantial portion of a wonderful company to owning 100% of a so-so business; it’s better to have a partial interest in the Hope diamond tan to own all of a rhinestone.” (2013 Letter to Shareholders)
4. “a climate of fear is your friend when investing; a euphoric world is your enemy.” (2013 Letter to Shareholders)
5. “unquestionably, some people have become very rich through the use of borrowed money. However, that’s also been a way to get very poor.” (2010 Letter to Shareholders)
6. “Be fearful when others are greedy, and be greedy when others are fearful.” (New York Times Op Ed piece October 16, 2008.)
7. “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” (1989 Letter to Shareholders)
8. “when we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.” (1988 Letter to Shareholders)
9. “Long ago Ben Graham taught me that ‘price is what you pay; value is what you get’.” (2008 Letter to Shareholders)
10. [gold] is an asset that will never produce anything…If all of [the world’s] gold were melded together, it would form a cube of about 68 feet per side…[and] its value [at 2011 prices] would be $9.6 trillion…For that, we could buy all U.S. cropland (400 million acres with output of about $200 billion annually), plus 16 Exxon Mobils (the world’s most profitable company, one earning more than $40 billion annually). After these purchases, we would have about $1 trillion left over for walking around money.
A century from now the 400 million acres of farmland will have produced staggering amounts of corn, wheat, cotton, and other crops – and will continue to produce that valuable bounty, whatever the currency may be. Exxon Mobil will probably have delivered trillions of dollars in dividends to its owners and will also hold assets worth many more trillions (and, remember, you get 16 Exxons). The gold will be unchanged in size and still incapable of producing anything…I’m confident, however, that the $9.3 trillion current valuation of [the gold] will compound over the century at a rate far inferior to that achieved by [the alternative]. (2011 Letter to Shareholders)
Photo Credit: Public Domain courtesy of Mark Hirschey (Work of Mark Hirschey) [CC BY-SA 2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Wikimedia Commons