Top 10 Quotes of Warren Buffett!

Words have irresistible power! Whether in songs or poems, sayings or stories, they can change your life and perspective. Having said that, certain quotes are always embedded in our mind. It inspires us, motivates us and sets us on the right path ahead.

Among the tons and thousands of quotes that you might have come across in your life, we have hand-picked a bunch of famous quotes that the market master, Warren Buffett, himself has put forward under various circumstances. These quotes will act as an inspiration to every investor who wants to invest rationally. Here you go.

Warren Buffett - Oracle of Omaha

Warren Buffett is an investor, businessman and philanthropist. He is leading at the front of Berkshire Hathaway as its CEO. He started trading at the tender age of 11, and went on to pay taxes and file returns within 2 years of his entry. With a net worth of more than 60.8 billion, he is considered to be one of the most famous investors. Every investor religiously follows his strategies and rules in order to excel on the trading floor.

The top 10 famous sayings of Mr. Buffett, which are crucial to be reflected upon as an investor, are mentioned below.

“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”

Say there is news that a bomb has been placed on one of the famous buildings, and the markets are falling drastically. You will immediately resort to crowd mentality and might end up transferring your money into safe assets like gold, etc. 

As an investor, you should be confident in your investment no matter if the markets are going to be closed for a long period. You shouldn’t panic or revisit your decision out of fear. This saying is a perfect example of how a long term investor should pick a stock.

“Risk comes from not knowing what you are doing.”

Attempting to make a cake with no knowledge or recipe of the same will end in disaster. The same logic applies to the Dalal street as well. If you are not aware of how a particular company makes money or how a particular asset class works, it would be foolish to put your money blindly. This would be similar to walking over a sword with your eyes blind-folded. 

Staying in your area of competence and consuming risk within it will give you a better shot at success than vice versa. Try to gain enough and sufficient knowledge before considering a particular investment path.

“We don’t have to be smarter than the rest, but be more disciplined than the rest.”

If you observed closely, you would find that many people try to out-smart the market and make great profits. But they would ultimately become the losers. So what are we supposed to do? 

One of the most important features of a good investor is ‘discipline’. A disciplined investment strategy, along with a destination in mind, is sufficient to take you to a great height. Rather than trying to be the smartest, try to be more disciplined. 

“Cash combined with courage in a time of crisis is priceless.”

When the pandemic began its hunting spree, there was a lot of volatility in the market. There was high pessimism followed by panic and fear. Investors were in search of a safe haven to park their money. 

Had they, instead of worrying, invested in some good quality companies, they would have fetched some great returns by now. Hence, in times of crisis, you should be keen and quick on locating the possible opportunities. And then, you should have the courage and money to get going with the decision.

“Rule no.1: Never lose money. Rule 2: Never forget, rule No 1.”

Amidst everything that was said by Warren Buffett, this rule has special relevance and importance. When you take up any investment opportunity, irrespective of the returns, protection of the capital must be one of your important objectives. To put it simply, taking decisions that are irrational or making investments that act contrary to logic are going to cost you a lot more than they can fetch.

“Price is what you pay; value is what you get.”

Here, Buffett brings out the importance of value investing, one of the most prominent strategies behind Mr. Buffett’s success. Value investing is a technique wherein the investor buys the shares of a company at a price lower than its actual value. As a result, he will be making a profit when the company realises its true value. Buffett suggests an investor to follow this approach.

“Never depend on a single income.”

Diversification is the most powerful tool. An investor who fails to extract the benefits of this tool will surely land upon serious trouble. Placing all your eggs in a single basket may not be a sound way. As it might cause damage to all your eggs when the situation is not as per your expectations. Thus diversifying your capital into multiple asset classes can save you.

“No matter how great the talents or efforts, some things just take time. You can’t produce a baby in one month by getting nine women pregnant.”

After all your hard work and efforts, if you ditch this one quality, your entire dedication and time will go waste. That one quality is patience. An investor should have mastered the art of being patient in order to fetch the required returns and fulfil his goals. Hasty actions might bring home huge losses.

“Today, people who hold cash equivalents feel comfortable. They shouldn’t. They have opted for a terrible long term asset….(that) is certain to depreciate in value.”

He explains how important and crucial is investing for any individual. While cash might be a peaceful solution, it is going to lose its value in the long term. The item which is available for 100 today may cost 150 tomorrow. So you should ensure that you are keeping up with the inflation, and investment seems to be the only option to do that.

“Be fearful when others are greedy. Be greedy when others are fearful.”

Human beings tend to make mistakes. They do things that are irrational, and that makes no sense. An investor should bear in mind this fact and ensure that he stays away from what the herd is doing. That way, he could skip the obvious pitfalls dug in his or her path. 

Closing words

Hope these quotes offered you some insights as to how to operate in a market. While words do have power, they make no sense inked in the paper. Only if you apply these words in reality you would know their significance and acknowledge the true learning. Hence, in addition to getting motivated by these quotes, ensure you reflect them in your actions as well. Because only then you can reap the fruits hanging from the wisdom tree.