Need some advice? Legendary investor and CEO of Berkshire Hathaway (BRK-A, BRK-B) Warren Buffett has plenty to share. Through his letters, essays, op-eds and TV appearances, Buffett dispenses folksy, funny, plainspoken advice on investing, management, life, happiness, and everything in between.
On Saturday May 1, Buffett and his longtime business partner Charlie Munger will share more of their wisdom at the 2021 Berkshire Hathaway Annual Shareholder Meeting. Like last year, shareholders will not attend the event in person because of the COVID-19 pandemic, but investors from all over the world can watch the event stream live exclusively on Yahoo Finance.
The editors at Yahoo Finance dug up some of Buffett’s best quips, tips, and adages from meeting transcripts, shareholder letters, and interviews.
1. Trust in American ingenuity.
“American magic has always prevailed, and it will do so again.”
— Shareholder meeting, 2020
2. Don’t be a fearmonger.
“Fear is the most contagious disease you can imagine. It makes the virus look like a piker.” (A piker is one who gambles with small amounts of money.)
— Shareholder meeting, 2020
3. Learn the language.
“You’ve got to understand accounting. You’ve got to. That’s got to be like a language to you,”
— Interview with Yahoo Finance’s editor-in-chief, Andy Serwer, 2020
[See also: Why Berkshire Hathaway’s health care project Maven failed]
4. Go long.
“[Our] favorite holding period is forever. We are just the opposite of those who hurry to sell and book profits when companies perform well but who tenaciously hang on to businesses that disappoint. [American investor] Peter Lynch aptly likens such behavior to cutting the flowers and watering the weeds.”
5. Invest in companies you believe in.
“It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”
6. Price and value aren’t always the same: Don’t pay too much.
“Price is what you pay. Value is what you get.”
7. Reputation is everything.
“Lose money for the firm, and I will be understanding; lose a shred of reputation for the firm, and I will be ruthless.”
— Buffett’s Congressional testimony in 1991 regarding Salomon Brothers
8. Be skeptical. If something looks too good to be true …
“A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful.”
9. Don’t invest in something you don’t understand.
“The important thing is to know what you know and know what you don’t know.”
10. Don’t do a deal with someone you don’t trust.
“You cannot make a good deal with a bad person.”
11. Don’t buy a stock unless you think it’s undervalued.
“Just buy something for less than it’s worth.”
12. Price dips are an opportunity to increase your positions.
“Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.”
13. The future is never clear.
“Uncertainty actually is the friend of the buyer of long-term values.”
— Forbes, Aug. 6, 1979
14. It’s usually the buyer who encounters unpleasant surprises.
“As in the case with marriage, business acquisitions often deliver surprise after the ‘I do’s.’”
15. Park your money in index funds rather than in individual stocks.
“In my view, for most people, the best thing is to do is owning the S&P 500 index fund. There are huge amounts of money people pay for advice they really don’t need.”
16. Use a bucket, not a spoon.
“Every decade or so, dark clouds will fill the economic skies, and they will briefly rain gold.”
17. Seize an opportunity while you can.
“Don’t pass up something that’s attractive today because you think you will find something better tomorrow.”
— Speech at Columbia University, Nov. 12, 2009
18. Stay cool.
“The sillier the market’s behavior, the greater the opportunity for the businesslike investor.”
— Preface, “The Intelligent Investor,” 2003
19. It’s during hard times that the winners — and losers — get exposed.
“You only learn who has been swimming naked when the tide goes out.”
20. Read and think A LOT. Buffett spends the majority of his day — 80% — reading and thinking.
“The best way to think about investments is to be in a room with no one else and to just think. If that doesn’t work, nothing else is going to work.”
— Colloquium at the University of Florida, Oct. 15, 1998
21. Buffett has long said it doesn’t take a high IQ to be successful in business — knowledge is more valuable.
“What we do is not beyond anyone else’s competence. I feel the same way about managing that I do about investing: It’s just not necessary to do extraordinary things to get extraordinary results.”
— Fortune, April 11, 1988
22. Follow the rules (Though Buffett readily admits to making a few mistakes of his own.)
“Rule No. 1 is never lose money. Rule No. 2 is never forget Rule No. 1.”
23. Keep this in mind if you’re looking for a board position:
“When seeking directors, CEOs don’t look for pit bulls. It’s the cocker spaniel that gets taken home.”
24. Be frugal. With the exception of his private jet, Buffett is famously sparing and has lived in the same house since 1958.
“I have every possession I want. I have a lot of friends who have a lot more possessions. But in some cases, I feel the possession possesses them, rather than the other way around.”
— CBS News, Feb. 8, 2012
25. You’re your own best asset.
“Your best investment is yourself. There is nothing that compares to it.”
— Georgia Tech alumni magazine, 2013