Warren Buffett has always impressed me with his uncanny ability to take the complex and make it simple and digestible. When you spend days focused on investing and managing portfolios for clients like I do, it’s nice to read colorful commentary that sums up a situation or concept concisely. Many of Buffett’s best quotes come from his annual letters to shareholders, but his interviews and speeches also lend to great quotable commentary. A few choice words can summarize winning strategies and rules of thumb quite nicely.

Here are some of my all time favorites from Buffett:

1) Investor 101 [1]

Rule No. 1: Never Lose money

Rule No 2: Don’t forget Rule No. 1

2) Noodle on this one [2]

“I am a better investor because I am a businessman, and a better businessman because I am no investor.”

3) Wonderful vs. Fair[3]

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

4) The Fourth Law of Motion[4]

“Long ago, Sir Isaac Newton gave us three laws of motion, which were the work of genius. But Sir Isaac’s talents didn’t extend to investing: He lost a bundle in the South Sea Bubble, explaining later, ‘I can calculate the movement of the stars, but not the madness of men.’ If he had not been traumatized by this loss, Sir Isaac might well have gone on to discover the Fourth Law of Motion: For investors as a whole, returns decrease as motion increases.”

5) The Watchful Investor [5]

“You only find out who is swimming naked when the tide goes out.”

6) Timing is everything [6]

“Investors should remember that excitement and expenses are their enemies. And if they insist on trying to time their participation in equities, they should try to be fearful when others are greedy and only greedy when others are fearful.”

7) Soaring[7]

“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”

8) Pressure cooker [8]

“The stock market is a non-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!”

“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.”

9) Socks and Stocks [9]

“Long ago, Ben Graham taught me that ‘Price is what you pay; value is what you get.’ Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.”

10) Criteria

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

“Never invest in a business you can’t understand.” [11]

---

David Osborne is the founder of Osborne Advisors, an independent private wealth management firm offering wealth management to high net worth individuals, families, estates and corporations since 1999. An extension of Osborne Advisors, Osborne Advisors Pro, is a sports wealth management offering created solely to focus on the unique financial management needs of professional athletes and coaches.

This article was written and prepared by Red Fan Communications (Austin, TX, 512.551.9253) and David Osborne. David Osborne is a registered representative and registered investment adviser representative of SWS Financial Services, Inc., a member of FINRA and SIPC and a registered broker dealer and registered investment adviser who does not provide tax or legal advice, located at 1201 Elm Street, Suite 3500, Dallas, TX 75270, 214.859.1800. Though information provided in this article was prepared by sources believed reliable, SWS Financial Services, Inc. does not guarantee its accuracy or its completeness. This article may not be duplicated or redistributed without the prior consent of SWS Financial Services, Inc. Red Fan Communications is unaffiliated with SWS Financial Services, Inc.